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You’ve watched the world of cryptocurrency boom in recent years, and you want to be a part of it. You’re planning on investing in it.
Before you take the exciting step of investing in crypto, you should read these three important tips first. They’re bound to help.
1. Don’t Use Emergency Savings
An all-too-common mistake that new investors make is using their emergency savings for cryptocurrency. They need a collection of savings to invest, so they decide to use their emergency fund. Some even think this will boost their emergency savings since crypto investments could potentially rise in value and give them more funds to work with.
This is not a good strategy. Cryptocurrency can be extremely volatile — this means one week, the value could be skyrocketing, and the next, it could be plummeting. There is no guarantee that your investment will increase in value. What if you have to deal with an emergency when the investment value is low? What will you do?
In this case, you’re going to have limited options for handling the emergency expense. You can’t cash out your crypto because it’s trending downward and holding a low value, and you don’t have any savings. As a solution, you can try to borrow money through CreditFresh with a personal line of credit. If your application for a personal line of credit is approved, you can request a withdrawal within your credit limit and have the funds deposited into your bank account. Then, you can use those funds to cover your emergency in a short amount of time.
However, you can avoid this stressful scenario by leaving your emergency fund alone. Don’t use those savings to make crypto investments. That safety net should go untouched.
2. Beware of Scams
There are a lot of cryptocurrency scams out there. Be careful with your investments so that you don’t fall for one. You could end up losing your money or sharing personal data that you don’t want to fall into the wrong hands.
What are some signs that you’re facing a cryptocurrency scam?
- A company asks you to share your private keys (the password for your digital wallet).
- A company promises big rewards, like getting rich quick or becoming a millionaire.
- You receive a cold call or email advising you to take on a new crypto opportunity.
- The company website has no visible team members.
- The cryptocurrency has a very trendy name (for example, Squid Game currency).
3. Remember Your Password
When investing in cryptocurrency, remembering your password is extremely important. Forgetting it could lead you to lose out — and lose out big. Just look at what happened to Stefan Thomas, an investor that lost his access code and couldn’t unlock his digital wallet with $270 million worth of Bitcoin.
To make sure that your password never slips your mind, you can use a password manager. A password manager will organize and store important details related to your digital wallet so that you can trade, sell and cash out your investments whenever you’re ready.
If you’re worried about security, you can also remember your password the old-fashioned way: write it down. Write it down on a piece of paper and store it in a secure spot, like in a safe. This should keep this sensitive information away from cybercriminals.
These tips should help you start your journey into crypto investments. Now you’re free to get started!
Disclaimer: This content does not necessarily represent the views of IWB.