10 Advice You Need to Avoid About Cryptocurrency

Have you tried your way into the cryptocurrency world yet? Are you finding it hard to get through it? Do you know this could be because you've been making judgments based on bad crypto advice.

In this blog post, we will go through some of the lousy crypto advise you can get, as well as how to avoid falling for them.

Buy cryptocurrencies at their peak price

The first piece of bad crypto advice is a timeless classic: buy a cryptocurrency when it is at or around its all-time high.

This occurs because you have been led to believe that the value of this cryptocurrency will continue to rise.

Another reason might be because prices continue to rise while you watch and you begin to feel the fear of missing out.

Do it happens when you buy, the price begins to fall and you end up with a 30 to 50 percent loss within days.

The loss may be sufficient to make you to sell what you hold. Then you move to buy another cryptocurrency that gets your attention.

What you may not realize is that if you're hearing about a cryptocurrency because it's pumping, you're already late to the game and hence at a significant risk of getting burned.

Choose a cryptocurrency price based on the coin market cap. The time limit to its utmost and assess whether or not the existing pump is viable.

If prices are increasing, you've missed the boat.

Buy cryptocurrencies when the price is low

This is the opposite of the first mentioned above, and they go hand in hand.

The ascent of Bitcoin over the previous seven years has validated this counsel.

Well, here’s a bummer, the Bitcoin script is not applicable to other coins.

You've probably been told at some point to acquire a certain cryptocurrency because its price is low, meaning that if it grows to the scale of bitcoin, it will make you wealthy.

Oddly enough the cryptocurrencies in this category have the most bellicose communities, and chances are, they're the ones who gave you this advice.

Of course, when you buy, the price begins to crash, and it's only when your portfolio is down 50% that you realize the price isn’t getting any better.

Avoid this calamity by disregarding the price of cryptocurrencies and instead focusing on its market cap.

This is due to the fact that a cryptocurrency's market cap ultimately dictates how much it can pump or dump.

Keep in mind that it works both ways. Consider how large this cryptocurrency's market cap may actually become.

How much money can this cryptocurrency actually expect to receive, and when will it receive it?

Spoiler alert, it will not have a greater than bitcoin or ethereum.

If you're not sure how big a cryptocurrency will grow, compare it to other crypto projects in its field.

Purchase a Cryptocurrency Backed by a Well-Known Individual

A cryptocurrency success is not determined by the fact that a well-known individual, such as a musician, politician, or CEO of an electric car firm is backing it up.

What makes this advise so bad is that it might provide the notion of legitimacy, especially if you hear about this cryptocurrency before it booms and manage to get in early.

Eventually, prices begin to decline, and you may double down and purchase the dip once or twice before realizing you should have sold a long time ago as prices approach zero.

Don't buy a cryptocurrency just because your favorite celebrity is tweeting about it or discussing it in all of his or her interviews and public appearances.

Keep in mind that celebrity endorsement is a significant red flag.

Quality crypto projects do not necessitate marketing, particularly marketing aimed at unskilled retail investors.

Conduct your own investigation to see if the crypto project being promoted has any real promise.

A defined use case that drives demand, vesting, and inflation are all part of this.

A schedule that does not introduce excessive supply, as well as a distinct design that sets it apart from the competition.

The majority of this information may be found in a crypto project's white paper.

Keep All of Your Cryptocurrency on One Platform.

Keeping all of your cryptocurrency on a custodial platform, such as a cryptocurrency exchange or a crypto savings app, is not a good idea.

Proponents of this strategy say that these platforms are just as safe as self-custody and that you should receive interest on your idle coins and tokens while you're not trading.

Then one night you learn that the cryptocurrency platform you're using has been hacked, and when you check your account, you discover that you were one of the victims, only to spend the next few days, if not weeks, attempting to recover your funds.

How to avoid falling for this? Start by deciding what you want to do with the cryptocurrency you have.

If you wish to trade, just keep the coins and tokens you're actively trading on an exchange.

Keep only the coins and tokens on which you wish to earn interest in a crypto savings app if you want to save.

Next, look at decentralized alternatives for any crypto you're currently utilizing, such as decentralized exchanges and d5 protocols, and buy a hardware wallet to safely store the rest.

Market Scare

this type of experts will urge you to sell your cryptocurrencies because the market is falling.

See what has happened in the cryptocurrency market since the beginning of the year.

Advocates of this advice typically argue that it is best to sell while you are ahead rather than when you are losing money.

In my experience, the champions of this advice are your worried friends and family.

When you follow this advise, it will more often than not pay off.

The crypto market tends to surge as soon as you sell, leaving you with an unwelcome capital gain.

Your options of dealing with this advice; assess the current state of the crypto market, begin by looking at signs other than the price.

This includes the BTC balance on exchanges, the fear and greed index, open interest on derivatives products, and any imminent crypto milestones that may precipitate a crypto market crash.

Next, calculate the worst-case scenario for your portfolio and ask yourself if you can take it financially and psychologically.

If you don't think you can, then restrict your exposure to the point where you feel safe.

If you believe you can, lay aside some money to purchase the dip if you dare.

Price Increase or Price Drop?

Any advice relating to specific events or dates for when a coin or token will allegedly pump or dump is doomed to fail.

This advice is typically given about new cryptocurrencies that are reportedly going to list on an exchange with a publicly traded firm or complete an often meaningless upgrade on a specified date.

You take the bait and wait, hoping to earn a quick profit, only to discover that the price performs the exact opposite of what you predicted, leaving you holding the bag or hanging on the sidelines as prices soar.

Here’s how to avoid this: To begin, investors tend to front-run these kinds of statements, so the pump or dump occurs far in advance and nothing happens on the actual day.

You must next determine whether the event improvement or announcement will be beneficial to the crypto project in the long run.

If this is the case, then an uneventful reaction to the development may be the ideal time to begin allocating for future benefits.

In an ideal world, you'd be able to allocate right before these advantages materialize, but there's no way to guarantee this.

Trusting social media advice is a proven way to wreck your crypto life.

You should only use the information you find on social media regarding a cryptocurrency project as part of your own study, and keep in mind that youtubers, tweeters(is that an English word?), and bloggers don't always get it right.

If you're a frequent user of YouTube, Twitter, or Reddit, you've certainly seen a slew of posts that make you nervous about being excluded from certain crypto initiatives while making you appreciate others.

These posts can sometimes be quite persuasive, tempting you to buy or sell a cryptocurrency at an inconvenient time, resulting in enormous losses or missing gains.

In order to deal with such advice: To begin, keep in mind that many of those who aggressively disseminate fomo and fud on social media are either paid or have spent so much time and money in a cryptocurrency project that their bias has gotten the best of them.

Do your own investigation to see if what they're stating is true.

It's possible that the YouTuber, tweeter, or blogger in question is getting paid to discuss the cryptocurrency in question.

They may own the coin or token under discussion as part of their personal portfolio.

A word of warning: if the information they're supplying isn't publicly available or requires you to interact with them directly to confirm, you're most likely dealing with a scam.

Go All in on Crypto Investment

Then there are those who would tell you to go all in on cryptocurrency because they feel the current financial system is about to collapse.

This is a common concept in the crypto world. To be fair, it's difficult not to consider this possibility when global inflation is at an all-time high.

Even so, this does not imply that the banking system will collapse tomorrow, and even if it does, there is no assurance that the world will turn to cryptocurrency.

It's also likely that we'll see a final fiat bounce before the inevitable collapse, and being 100 percent in crypto in such circumstances may force you to sell too soon due to the volatility.

So, here's what you can when faced with such an advice: Maintain a diverse investment portfolio because you never know when the market may crash and people will flock to cash, crypto gold, or another asset.

Next, consider diversifying your cryptocurrency holdings because you never know what the government will do with it.

History shows that they would even try to seize it. In that event, one of the only ways to keep your financial freedom would be to use a privacy currency.

Government Apprehension

Sell your cryptocurrency because governments all around the world are working to make it illegal.

This is something we've all heard at some point while reading crypto news. Right?

When a regulator or politician makes comments about cryptocurrencies that signal a crypto crackdown is on the horizon, both seasoned and inexperienced crypto investors feel terrified.

In some situations, this may be enough to frighten you into selling, but as soon as you do, the crypto market recovers, forcing you to start back into your old positions at a higher price.

In my opinion, you should conduct your own investigation on this. Begin by studying the complete context of what the regulator or politician stated, as many major media sites will take things out of context to garner clicks.

Next,consider if this person has the authority to prosecute bitcoin in the manner they propose, and whether their constituents and sponsors would support such a move.

Most of the time, these are empty threats, and the same folks on Wall Street who hired them would never allow them to carry out a crypto crackdown.

Dive in further investigations if you want to know how bullish institutions are on cryptocurrencies.

Never make an investment

Then there's the advisors on the other side of the coin. This advise almost invariably comes from no coiners who feel crypto is in a bubble simply because they were late to the game.

They believe crypto is a fraud because the media informed them so.

And they are aware that crypto is in conflict with central bank digital currencies.

First of all, acknowledge that every fiat currency ever printed has failed.

The majority of the prosperity we've seen over the last few decades has resulted not from objective asset gain, but from the devaluation of the currencies used to purchase them.

You should be aware that the major benefit of cryptocurrency is its ability to operate outside of the existing financial system.

The innovative technologies that underpin it have objective worth.

Also, the use cases produced by bitcoin are also gaining in value over time.

By comparison, the fiat financial system will begin to resemble a ponzi scheme.

Taking advantage of the global crisis

The final piece of crypto advice that is thrown around is the use of the global financial crisis to convince people to buy cryptocurrencies.

For example, the world is currently watching the conflict between Russia and Ukraine.

That is morally repugnant. It's wrong on so many levels. This is not the kind of pain you use to gain an advantage.

Don't buy cryptocurrencies because the world is in a state of crisis.

You can't predict the future price action of a cryptocurrency no matter how many tools, indicators, and insider information you have.

If you want to learn about crypto in a safe way, start by reading articles, magazines, and blogs like this one that provide unbiased information about cryptocurrencies.

To truly understand what you're investing in, do some research on the coins you're considering purchasing.