The most common mistake to avoid before taking the plunge with cryptocurrency

Internalise one fact before you start your investing journey and you'll have sidestepped the biggest mistake most people make.

Bitcoin and other cryptocurrencies have seen both soaring highs and crashing lows over the last few years.

Still described by many as the ‘Wild West’ of finance, this wildly-swinging market has created millionaires overnight.

You will not be one of them.

If you can internalise that fact, then you’ll be able to avoid the single biggest mistake that most people make when getting into crypto.

Ploughing all of your available funds into a digital wallet and hoovering up all the Bitcoins you can is not going to turn you into a multimillionaire in a couple of weeks.

As a regular investor, you are going up against organisations and individuals who spend every waking moment looking for the perfect trade or the next hot coin.

Unless you’re prepared to put in that same level of effort, the odds are against you. 

Next, there are taxes and fees that will need to be paid most steps of the way. Even if you make a lot of money, you will need to consider the necessary payments that will take chunks out of your returns.

Beware the scams

Finally, as with any new financial product, there are scammers out there looking to take advantage of people starting out. If it sounds too good to be true, it almost certainly is.

All that being said, you can still find a much better return with cryptocurrency than other kinds of investments. And there are inherent advantages about being able to get involved all by yourself. But you need to take the softly-softly approach and not worry that you’re missing out on the mother of all gold rushes.

Take it slow, take it steady and you’ll find that holding a bit of cryptocurrency can be a healthy part of a well-balanced portfolio.

Sam Volkering says...

metro.co.uk/ getty

When you take the right approach and ease yourself into it, that’s a better way to help manage the volatility.

People try and get too complex too early.

Sam Volkering writes about cryptocurrencies and other tech-based investment trends at Exponential Investor.

You can follow him on Twitter here.

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