Ever since blockchain and cryptocurrencies became popular, more options have emerged in the market. A lot of people purchased coins, even without proper understanding of what blockchain is. To make sure you’re making an educated decision, we’ve collated some tips and tricks about transacting and buying NOAHCOIN cryptocurrency.
1. Treat cryptocurrency the same way you treat your stocks in an equity portfolio.
When you purchase stocks of a specific company, you look at it from a risk management perspective, so you do your due diligence before buying. You research about a company’s history, its past performance in the market, projections for its future, and the core team behind it.
It’s the same with cryptocurrencies. Study the coin’s white paper to determine what utility value it proposed. What do they plan to use the coins for, and how? The white paper also outlines the timeline and roadmap for potential growth. Look up its founders and LinkedIn to assess their credibility.
2. Know and understand the coin’s mission-vision.
Read about the cryptocurrency’s vision and see how its fits into your financial goals. Ask yourself what you’re looking for in a cryptocurrency and why you’re purchasing it to begin with. Some coins, for instance, are focused on privacy, while others are designed for smart contracting or scaling payments.
3. Learn how to store major coins before trading.
Before you start buying any cryptocurrency, you need to know what a cryptocurrency wallet is and how it works. There are a lot of options for you when it comes to storing your cryptocurrencies, from hardware wallets and cold storage to hot wallets and exchange wallets. Note that a cryptocurrency wallet has two important elements – a private key and a public address.
With hot wallets, for instance, the private keys are managed by the online exchange platform. Cold wallets, on the other hand, come in the form of software or hardware solutions. They are commonly installed on a device and can be used offline. Hardware wallets are the most secure solution for storing cryptocurrencies. You can store coins in your cold wallet while not in use, then you can move them to your hot wallet when you’re trading.
Some wallet solutions worth looking into are Exodus, Trezor, Ledger Nano S, Coinbase, Kucoin.com and Changelly.
4. Don’t diversify just for the heck of it.
You know you’re not supposed to put all your eggs in one basket to minimize risk. Well, you’re neither supposed to diversify just for the sake of it. A good balance of diversification is a 60 / 25 / 10 / 5 percentage.
Identify the coin that you believe has the best value, then purchase as much value as you’re willing to lose in that coin. Then, to reduce your risk of loss, you can purchase another cryptocurrency in lesser value. This way, you’re increasing profit and minimizing risk.
5. But, save some so you can buy dips.
If you used up all your money already, then you won’t be able to buy the “dips”. Always set aside some funds so that you have an amount ready should a sudden dip happen.
6. Consider the market map more important than coin price.
A common mistake made by those new to buying cryptocurrency is that they consider the coin before the market cap. Some would choose to purchase a coin just because it currently has a very low price. But, the coin price only matters after you take into consideration the number of coins circulating in the market.
Note that the price of the coin multiplied by the circulating supply (number of coins in the market) is the total market price of the cryptocurrency, and that’s what matters. That’s exactly why cryptocurrencies aren’t ranked based on price, but based on market cap.
A coin with a higher market cap has a higher chance of seeing value increase than a coin with a lower market cap.
7. Follow cryptocurrency leaders, analysts, and pioneers of the cryptocurrency community.
There are cryptocurrency pioneers, influencers, and analysts that you should definitely follow on Twitter, LinkedIn and cryptocurrency communities. They share valuable thoughts about blockchain, the cryptocurrency market, industry trends, and price prediction. These thought leaders share a constructive view on how they see blockchain technology affecting the current landscape.
8. Stay abreast of the latest news about your coins.
Cryptocurrencies usually maintain a blog to update people about the latest technological developments in blockchain, media coverage, and the like. The information they share will also be valuable in helping you decide whether it’s time to buy more or sell.
9. Watch out for scams.
Don’t head into any transaction that doesn’t feel right! If it looks like a shady deal that’s too good to be true, it most likely is. Make sure to do your research and avoid scams. (Read our blog: How to Spot Cryptocurrency Scams Infographic) Look up the developers of the cryptocurrency, the founders behind it, and read their white paper. If the cryptocurrency doesn’t have a white paper, then it’s probably a scam.
Holding cryptocurrency means that you’re contributing to mankind’s latest innovation in FinTech. When cryptocurrencies become a more common token of transactions and become a substitute for the Dollar, Euro, Yen, and more, the value of each coin, such as NOAHCOIN cryptocurrency, will be far beyond what it is now.