Bitcoin has been around for a few years now, and many college students have started to invest in cryptocurrency. While Bitcoin can be an excellent investment, there are some mistakes that new investors often make. Here are some of the most common Bitcoin mistakes college students should avoid.
1. Investing Only In One Coin
Many new investors will buy only one type of cryptocurrencies, such as Bitcoin, Ethereum, or Litecoin. While this is a good start, it’s essential to diversify into other cryptocurrencies. There are some benefits to using more than one cryptocurrency. For example, some cryptocurrencies may not be available on certain exchanges because they’re too small. By investing in multiple types of coins, you’ll have a better chance at getting your hands on a popular currency before the price surges, and the Coin base closes registration for new people.
2. Investing All the Money You Have
Bitcoin is a very volatile market, which means that the value of Bitcoin can go up or down in just one day. One way to ensure you’re ready for this volatility is by diversifying your investments among cryptocurrencies and fiat currencies. Also, don’t invest what you cannot afford to lose. Bitcoin is still in its early years, so no guarantees with any investment.
3. Following the Hype
Like any other form of investing, it’s paramount only to invest money you’re willing to lose. Bitcoin’s current hype can make it very tempting to put all your eggs in one basket, but that usually leads to big mistakes. When researching cryptocurrencies, don’t just look at the growth charts, take a look at the team behind the coin and read reviews from other users. If it seems too good to be true, then it probably is.
4. Trading With Emotions
Bitcoin and other cryptocurrencies are very volatile right now, which means that the price can change drastically from hour to hour. If you plan on trading, it’s essential to learn how to trade not with your emotions but with a set of rules based on the technical analysis of charts.
Another common mistake for new investors is to trade too often. Overtrading can lead to overpaying fees and missing out on the best opportunities. The best way to avoid this is by setting up alerts for when the price changes so you can catch it at its lowest point. Do not try to make a lot of trades during the day, and don’t sell unless it’s been at least a few hours since you bought.
6. Ignoring Taxes
Many new investors ignore the taxes they have to pay. The truth is there are a lot of hidden fees that you might not even know. Such can be avoided by researching all costs associated with cryptocurrency before investing and regularly monitoring your investments for any changes.
Bitcoin is a fascinating and promising new technology. While Bitcoin can be an excellent investment, knowing what you’re getting into is essential. By doing a thorough research and avoiding these mistakes, you’ll be on your way towards investing in Bitcoin the smart way.
Barry Lachey is a Professional Editor at Zobuz. Previously He has also worked for Moxly Sports and Network Resources “Joe Joe.” he is a graduate of the Kings College at the University of Thames Valley London. You can reach Barry via email or by phone.