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7 Golden Rules To Making Money On The Crypto Market

Last Updated November 4th 2020

Golden Rules To Making Money From Cryptos

The only way to pick a perfect crypto coin or fund, is to go back in time. But, that doesn't mean you have to guess.

Here at Trading Education, we have selected our top tips to investing successfully in the crypto market.

On November 1, 2015, one Bitcoin was worth $325.43. Today, one Bitcoin is worth $13,726. Bitcoin has been chosen as the best investment of the decade. If you had invested five years ago, you would be thankful now!

Bitcoin has outperformed all his competitors throughout the last decade, experiencing incredible growth. Cryptocurrencies, in their first years of existence, did not have any significant value, but over the years, their value has increased. 

If we go back only five years and look at the prices of cryptocurrencies on November 1, 2015, then we will understand how much they have increased. This is what the top 10 looked like then:

cryptocurrency market cap

A historical snapshot of the crypto market top 10 for November 1, 2015. Source: https://coinmarketcap.com/historical/20151101/

The price of Bitcoin was at $325.43. XRP was not even close to a cent yet. Ethereum was ranked 4th and was worth just above a dollar.

Well, if we take a look at the Coinmarketcap top 10 today, things stand entirely different. Bitcoin stands on top worth of $13,726. Ethereum is second close to $400 while as mentioned above in 2015 was worth just above a dollar. And, XRP now ranks fourth at $0.23.

So if you had decided to buy a Bitcoin back then, you would purchase it for $325. Now your Bitcoin would be worth $13.726. And imagine if you owned more bitcoins!

Moreover, according to experts, prices will only keep increasing as cryptocurrencies are becoming an integral part of the financial world.

If you were lucky enough to have invested back then in any of these cryptocurrencies, your return on investment would be enormous today. 

You could not even come close to earning this amount of money with any other investment, be it stocks, bonds, gold, etc. Cryptocurrencies have outperformed any asset literally.

How To Buy a Cryptocurrency?

The easiest way to buy cryptocurrency is through cryptocurrency exchanges. Some of the best cryptocurrency exchanges are eToro, Binance, Bittrex, Coinbase and Kraken.

You just have to choose one of them, create an account, connect your credit or debit card and make your first investment.

What Cryptocurrency To Buy?

Well, that depends on your preference. There's no specific cryptocurrency that you have to buy. Although Bitcoin is the most reputable cryptocurrency and people tend to buy it more, other cryptocurrencies are good options as well. 

As per Coinmarketcap, there are 7575 cryptocurrencies right now. Except for Bitcoin, some other cryptocurrencies that are booming are Ethereum, Cardano, Litecoin and Chainlink. 

Other altcoins can have huge returns on investments also. Some new coins experience 300-400% growth over 24 hours. 

Cryptocurrencies are speculative so one can never exactly know which one will perform best.

What Is The Safest Way To Buy Cryptocurrency?

There are various ways to buy cryptocurrencies safely. You could use a crypto ATM and purchase crypto with your debit/credit card. Yet the most popular and safest way to buy crypto is by using a reputable cryptocurrency exchange. eToro is a prestigious brokerage that takes pride for their security. 

Where To Keep My Cryptocurrency?

After you purchase your preferred cryptocurrency, you have to store it in a crypto wallet. 

There are hot cryptocurrency wallets and cold ones. Hot wallets are websites/platforms, and obviously, they are connected to the internet while cold wallets are hardware commonly in form of USB. They are not connected to the internet, which actually makes them safer as they cannot get hacked.

Is Investing In Cryptocurrency a Good Idea?

As for now, cryptocurrencies are going through a great period. Banks and financial companies are jumping into the crypto sphere offering cryptocurrency services. 

Crypto experts are predicting price increases although, throughout their short history of existence, cryptocurrencies have been volatile, so it is hard to predict what will their price be in the future. 

Overall, cryptocurrencies are considered risky but are known for great returns on investments.

Is Bitcoin The Best Cryptocurrency To Invest In?

Bitcoin is the most reputable cryptocurrency. It was the first one to be released in 2009, leading the way for the rest. Bitcoin is often synonymous with cryptocurrencies. 

There is a tendency to invest more in Bitcoin than in other cryptocurrencies, due to the reputation that Bitcoin has. Bitcoin has always been the leader of cryptocurrencies since its launch, and in one way or another, other cryptocurrencies are correlated to it. 

But, its reputation gives it more acceptance than its rivals worldwide.

The 7 Golden Rules Of Investing In Cryptocurrencies

When it comes to investing, there are some rules you should follow. Here, at Trading Education, we have selected below the 7 golden rules of investing in cryptocurrencies.

1. Buying low, selling high

It may sound cliche but "buy low, sell high" is the basic rule when it comes to investing in cryptocurrencies. It is simple and easy to understand. 

As a person who wants to invest in cryptocurrencies, you need to find the time when cryptocurrencies have a low price and buy. Then, when the price goes up, sell.

This rule can be applied to cryptocurrencies as the nature of cryptocurrencies is volatile, which means that their price experiences frequent ups and downs.

2. Avoiding emotions

The much-talked-about "emotions" only hurt you as an investor. If you allow emotions to control you when investing in cryptocurrencies, then chances are you made the wrong decision. 

You may have heard about the term FUD which is slang for "fear, uncertainty and doubt". These are the three most common feelings you may experience as an investor in cryptocurrencies.

Of course, as humans, we get excited, nervous, desperate, but in crypto investing, we have to try to get rid of emotions.

So you do not need to hurry. Analyze the market and make rational decisions. Do not let your emotions make decisions for you.

3. Avoiding the fear of missing out - FOMO

The so-called FOMO - the fear of missing out generally means when we as individuals think that others are experiencing something satisfying, while we are not there or absent.

In cryptocurrencies, FOMO comes into play when the price of cryptocurrencies rises and the impression is created that everyone is selling, so you may think that you should also sell because you are afraid that you will lose the opportunity.

FOMO also appears when you see a cryptocurrency that you have not invested in, growing. And then you sell the cryptocurrencies you own to buy it. 

So, try to avoid FOMO and stick to your coin.

4. Sticking to your plan

You, as an investor in cryptocurrencies, must adhere to your plan. There are different movements in the market, but you can not change your strategy every time the market changes.

So you have to create a strategy and stick to it. Define your investing style - whether you want to go with long-term or short-term investing. Also, set stop-loss orders so you can automatically sell when the price hits your target. Placing stop losses will help you by sticking to your plan as it will prevent acting based on your emotions.

5. Investing for longer terms

Few people believed in cryptocurrencies when Bitcoin was launched in 2009. Yet they grew steadily, creating a sensational history with ups and downs in value. Those who invested in the early days of cryptocurrencies, no doubt now have no regrets, as they have only benefited from their investment.

Cryptocurrencies are only gaining more reputation and respect, especially recently as many banks and financial institutions are launching cryptocurrency services.

Therefore, they are expected to only increase in value, so consider making investments in the long run. This is differently known as HODLing, a slang for "holding" cryptocurrencies. In all likelihood, you will be thankful in the future.

6. Diversifying

Since investing in cryptocurrencies have has its own risk, then it is best to invest in more than one cryptocurrency. This way, you are less exposed to the risk of losing any asset. Let your crypto portfolio be diversified with investments in different coins.

Since cryptocurrencies are correlated, they perform similarly to each other; however, some of them still perform better than others. Especially some altcoins that do not have that much reputation, sometimes they know how to surprise for good. 

Therefore, invest in more than one coin, and let your portfolio be diversified.

7. Investing only what you can afford to lose

We mentioned volatility several times during the article, and again we must say just like it offers many profit opportunities, volatility also may be a risk factor for you as an investor.

Cryptocurrencies are risky, and you should be careful not to invest everything you have in cryptocurrencies. It is good to invest as much as you can afford to lose, so in case of a crash, you will not worry too much about the assets you may eventually lose.

Where Can I Learn To Invest In Cryptocurrency?

Investing in cryptocurrencies can be learned in online courses. Here at Trading Education, we have prepared courses that teach the latest methods of investing and trading cryptocurrencies.

Our enthusiasm for trading really guides us, and our lessons are taught by individuals who are passionate and have sensational experience in investing and trading.

At Trading Education, in addition to offering courses on how to invest in cryptocurrencies, we can teach you trading techniques in forex and stocks. If you are interested in starting your own adventures in trading, then join the broader community of the academy of Trading Education.

Why Should You Invest In Cryptocurrencies With eToro?

etorox, cryptocurrency trading

eToro has the most advanced regulated cryptocurrency exchange called eTorox that offers a progressive crypto trading experience for algorithmic traders, institutional-grade investors, and experienced crypto traders.

eToroX offers deep liquidity, and there are no fees for depositing crypto. Trading fees can be as low as 0.03%. eToroX offers a considerable number of cryptocurrencies, foreign exchange trading pairs and tokenized stablecoins, like USDEX, GOLDX, EURX, GBPX, and more.

eTorox is one of the safest cryptocurrency exchange, and it thrives on making your investing experience as best as possible.

eToro – The Best Cryptocurrency Exchnage for both investors and traders

etoro broker

eToro have proven themselves trustworthy within the industry over many years – we recommend you try them out.

Key Points

  • If you had bought one Bitcoin on November 1, 2015, it would cost you $325.43 Today your Bitcoin would be worth $13,726.
  • Cryptocurrencies are expanding widely, and an increase in prices is expected.
  • The easiest way to buy a cryptocurrency is through a cryptocurrency exchange.
  • Cryptocurrencies are stored in software or hardware wallets.
  • Thanks to its reputation Bitcoin has more acceptance than its rivals worldwide.
  • Buying low and selling high is the basic rule when it comes to investing in cryptocurrencies.
  • Emotions must be avoided when investing in cryptocurrencies.
  • Cryptocurrencies should be a long-term investment.
  • You should have a plan and stick to it.
  • Investing in more than in one coin is an excellent way to minimize losses in case of a coin crash.

 

There are many opportunities out there to make money investing in cryptocurrencies. Lately, cryptocurrencies and blockchain have been gaining attention and experts often refer to them as "future of money and finance". According to experts, now is a good time to make investments as cryptocurrencies' future is very promising.

We hope these 7 golden rules to making money on the crypto market will guide you towards your peaks of success in crypto investing world. If you have liked this article give us a like and share it, in case someone else would like to benefit from the 7 golden rules of investing in cryptocurrencies.

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