10 Things All Beginners Get Wrong When Trading Bitcoins – 2023 Guide
Investing in Bitcoin is one of the most popular options in recent years because of its high volatility and the chance to become much more valuable over time. The price of this digital asset is breaking new records at the start of 2023 by reaching a value of over $35,000. Also, according to current trends, there is a great chance for this cryptocurrency to become even more valuable in the future. Some experts have made studies that say that it might reach the price of over $100,000 in the next five years.
However, before you start trading on the market of cryptocurrencies, you should learn more about available options and all of the factors that are influencing the constant price changes. If you want to learn more about the process of buying and selling the BTC. Also, we have to mention that many people are rushing with their decision to start trading with Bitcoin even though they are not so familiar with the process of trading and the features of this cryptocurrency. You have to know that mistakes might lead to a great loss of money. Here are the most common mistakes that you should avoid.
1. Not Learning Enough About the Bitcoin
One of the most important things is to learn more about the main features of this cryptocurrency because that will help you to understand its full potential. Many people are still not so familiar with blockchain technology and its features but they are still interested in investing in BTC. However, no knowing enough might cause some mistakes and wrong moves that might lead to the loss of profit over time.
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2. Taking All Advice and Predictions as Guaranteed
The value of BTC is a very popular topic and we can see that many experts are making various analyses and predictions about its price in the future. However, you have to know that some of them might create false analyses to lure people into selling or buying more of these assets for their profit. Therefore, you should not take every piece of advice so seriously. The best way to avoid such mistakes is to follow the most recent news and read more about the current situation on the market.
3. You Don’t Have to Stick only to BTC
While Bitcoin is the most popular trading option, many other types of cryptocurrencies have a great potential to become more valuable over time. Therefore, you should research more options on the market and find the best moment to convert BTC in them over some online exchange platform. Many people are using this option and manage to make a great profit during that process. Some of the most popular options besides BTC are Litecoin, Ether, Monero, and more.
4. You Should Not Force Cheap Alternatives
Many people are interested in cheaper options because they are trying to find another coin that might have the same performances on the market as BTC. However, you should not force that too much since no one is sure whether some alternative token or coin will have a similar value. On the other hand, you should research the market and buy some tokens with great potential, but you should determine your budget and pay attention to not invest too much.
5. Not Having a Proper Plan
Another important thing is to make a proper plan related to your budget and the level of risks you are ready to take before selling or buying. For example, you can determine the value that you are expecting before selling the BTC on the market. Also, you should not rush with selling it in case that the price starts falling since BTC is highly volatile.
6. Not Learning More About the Market
One of the most important things that can help you to make a profit from crypto trading is to constantly follow the changes on the market and read analyses and news related to changes and predictions. For example, if there is a crisis in some countries or it is penalized by sanctions, there is a great chance that people from that country will start investing more in various alternatives and BTC as one of them. That can lead to an increased value of this digital asset.
7. Avoiding Security Measures
Even though blockchain technology represents one of the safest systems that offer much better security when compared to bank accounts, there are some methods used by hackers that might lead to the steal of your funds. The most secure method is to store your BTC on an offline e-wallet. On the other side, you should avoid storing it on online platforms. Also, be sure to keep the password of your e-wallet safe.
8. Be Aware of the Scams
There are various methods that scammers are using to lure people into investing their money and thinking that they are buying BTC while it will never be in their possession with these methods. For example, you can find many pyramid schemes where people are investing in a company that is allegedly trading with BTC while it is only stealing the money of people. Also, avoid any unknown websites and software that might be malware.
9. Investing More That You Can Afford
This is one of the most common mistakes where people get attracted too much by some trading asset by thinking about how the profit is guaranteed. However, you should be aware of the fact that the market is highly volatile and prices are constantly going up and down, especially with BTC that went from under $5,000 to over $35,000 during 2023, but there is always a chance for its price to start falling again. In that matter, you should determine your budget and invest only the money that you can afford to lose.
10. Avoiding Taxes
While it seemed like a big issue since it is decentralized, the developers managed to create software that people can use to calculate the taxes. This option is very important since it might influence the complete implementation of this digital asset into existing monetary systems. If you live in a country where trades with BTC are under taxation, be sure to use the proper software.