Want to level up as a crypto investor? Learn pro strategies, risk tips, tax rules, and safety habits to boost your crypto portfolio and minimize losses.
Crypto is still the new kid on the block and an emerging asset class in its own right. However, people are still trying to get to grips with how it works and when it is likely to rise in price.
Crypto is one of those assets that goes through enormous swings from day to day. Sometimes the price is up, but it can also crash quickly, even when the rest of the market remains relatively stable.
So, how do you become a crypto master and start trading this asset in a way that’s going to support your wealth?
That’s the topic of this post. It explores some of the ways you can improve your crypto investing and compete with the best in the world.
Keep Learning About Crypto
First thing’s first: it’s a good idea to continuously learn about crypto. Understanding it is the gateway to success for many people, especially if you can start making predictions.
These days, there are all sorts of opportunities to learn, whether it’s collecting data from an Eth block explorer or using an exchange platform’s blog. Many of the leading companies in the space are constantly generating new content to provide their readers with more information.
Spread Your Crypto Investments More Broadly
Another pro strategy is to spread your crypto investments more broadly. You want to make sure that you’re not relying on a single coin with underlying capitalization or technical issues.
One popular approach is to scout for the top crypto assets and then invest in a basket of them. Some will go to zero, but there will be a few that rise ten or hundred times above their baseline before you sell. It’s just a question of thinking about which those are and why you should choose them.
Be Risk-Sensitive
Obviously, if you’re buying crypto, you’re not interested in playing it safe. However, it pays to be risk-sensitive, meaning you find ways to mitigate the extreme risks that you want to take.
The best way to do this is through dollar-cost averaging. The idea here is to put cash in daily or weekly instead of all in a single lump sum.
This approach is particularly critical when buying crypto in a downturn. You never know how far it is going to fall or when it will go back up, so dollar-cost averaging is critical.
Analyze The Fundamentals
Also, you want to have a grasp of the fundamental drivers of the crypto market. Knowing what these are can give you more confidence before you go in and trade.
For example, if you think you know when investors are more likely to sell crypto, then you could get ahead of the curve by profiting or taking a short position.
Some people like to use conventional stock trading technical indicators for crypto because they are so widely available and easy to interpret. Others use instinct or the underlying data to make trading decisions. It all depends on what level you look at the market.
Keep Your Assets Safe
It’s also worth spending some time simply focusing on keeping your assets safe as a crypto investor. There are so many stories of people losing money they thought was encrypted on drives or exchanges.
Make sure you understand the level of encryption being used at every stage. If you aren’t sure, always remove crypto to a private wallet where you have full control. Keep some of your coins in cold storage if necessary.
Network With Other Investors
Networking with other investors is another pro strategy worth exploring. Talking to others about their approaches gives you more ideas and helps to keep you informed.
A lot of crypto investors hang out on Telegram and Discord. These platforms provide private communication and are often created around a central personality or business.
You can also find people willing to train you on crypto in these hubs. These professionals provide you with a fast-track to success and can help you avoid making significant losses.
Keep Tax Records
Depending on where you are in the world, you’ll also need to keep tax records. Authorities treat crypto in strange ways to keep it under control, so you may have to pay capital gains on any money you earn. Fortunately, the percentage you have to pay is usually quite small and shouldn’t affect you that much in the long-term.
If you can stay up to date with the latest regulations, that’s also helpful. The SEC and EU may change the rules at any time, posting them on X.
FAQs: How To Become A Better Crypto Investor
What’s the best way to start as a crypto investor?
Begin with research, use reputable exchanges, and start small using dollar-cost averaging to reduce risk.
Should I diversify my crypto investments?
Yes. Spreading your funds across several crypto assets can protect against volatility and increase potential gains.
Is crypto trading the same as crypto investing?
No. Trading involves short-term moves and technical analysis, while investing focuses on long-term asset growth.
How can I keep my crypto safe?
Use hardware wallets for cold storage, enable two-factor authentication, and avoid leaving large sums on exchanges.
Do I need to pay taxes on crypto gains?
Yes. Most countries require you to report capital gains from crypto sales. Keep detailed records and consult a tax professional.
Disclaimer:
The information provided in this article is for educational purposes only and should not be considered financial or investment advice. Investing involves risks, including the potential loss of principal, and past performance is not indicative of future results. Always conduct your own research or consult with a qualified financial advisor before making any investment decisions. AskTheMoneyCoach.com and its contributors are not responsible for any financial losses or gains incurred as a result of information provided in this article.
