With fear of missing out, investors may be eager to join the world of crypto investing. Proceed cautiously!

Can your stomach and your portfolio handle the volatility of a stock rising or dropping 2000 percent in one year? Can you handle losing it all? Crypto investing is not for the faint of heart.

Cryptocurrencies and their related investments are high-risk products. They have an unproven track record, are illiquid, with hyper-volatility. They are purely a speculative asset – research is limited. It’s not like you can look up the company’s financials or fundamentals.

The most important step before investing in the crypto market, whether it is the latest altcoin or blockchain, is to do your research. Know and understand what you are investing in. A good place to start is here: https://www.investopedia.com/terms/b/bitcoin.asp.

Image result for bitcoin bubble
No one knows exactly when the Bitcoin bubble will pop

 

Get involved in the community. There is a lot of buzz around different cryptocurrencies and their related technologies, with some rapidly increasing thousands of percent. Watch out for these and be extra wary. Different altcoins have varying levels of liquidity and can be much riskier.

While the bitcoin/crypto community is dynamic, exciting, and full of potential, it’s important to remember that these types of investments are high risk and should never be your whole portfolio – alternatively, they should be the smallest portion.

Another point to keep in mind is that there are zero market regulations. No government or central bank system controls cryptocurrency.

Always remember that investing in crypto is 100% speculation, and should really be only done once in a lifetime. There is a high level of risk associated with digital currency-related products and not even the most seasoned investor can predict what the market will do next.

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