Crypto Advice: Some Points To Consider
Crypto Advice For Your Family And Friends
If you are looking to suggest someone to start investing in crypto, or giving advice to the newbies, here are some points to consider.
It’s Your Responsibility
Know that you need to clarify in the very beginning, that whatever action is taken, it’s the person’s own responsibility. That’s because no one knows the market entirely, so nobody can ever be that sure of the future situation. It is important to be careful before investing, especially because the crypto market can get frenzy. Also tell them, DYOR before attempting investments in crypto.
Where We Are In The Bull Market
When one starts investing, s/he may often succumb to what we call FOMO – the fear of missing out. This results in a rush to invest without considering all risks. Desperation may get you to enter fast to become rich with crypto. However, while successful traders often buy when there’s low attention and sell when euphoria sweeps the market, retail investors are driven by emotion and tend to follow the herd.
One needs to understand where we are in the market currently despite the fact that it might be extremely bullish, as that will help prevent us from entering the market at the wrong time. One way is to enter with an equal proportion to Bitcoin, Ether and Solana in the ratio 50:25:25. This will at least keep you holding quality even if the market gets bearish. In case you cannot ignore the altcoins’ and memecoins’ get-rich-quick schemes, allocate up to 10% of your total investment.
What Goes Up Must Come Down – When To Exit?
The crypto market is said to have never been more bullish than now, and with Trump’s election as the US President, his pro-crypto appointments and nominations are further loosening the grip of regulations. However, considering the market to trend upward forever won’t be right. Even if anything becomes 100 times, it is bound to drop by 80-90 % again very soon, with too many people sitting on profit.
Place The Gains Out Of The Market
Instead of reinvesting profits upon seeing the coin soar during a bull market, it is better to place the gains in traditional accounts for 12-18 months. This will prevent chances of market collapse burdening you with more taxes on realized gains than the value of the assets themselves. It will give you some interest which you can use to pay tax liabilities, though you need to be extra careful with stablecoins as they have additional risks. Reinvest after around 12 months of peak.
Bottom Line
You can share your own experiences and learnings, and encourage others to join the crypto space.
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