Common Sense Tips for Investing in Cryptocurrency
Poker players seem to have an infinity for cryptocurrency. That may be because online poker rooms were among the earliest adopters of Bitcoin and altcoins. We saw Doug Polk launch a crypto channel and later shut it down. We’ve also heard various pros come out in support of crypto investing.
However, there is a lot of volatility lately involving cryptocurrency and some people may be setting themselves up for some massive losses. Today, we will give poker players some common sense tips for investing in cryptocurrencies.
Learn Why Crypto Prices Are Spiking
We’ve all heard about massive gains made in recent weeks by Bitcoin and various cryptocurrencies. However, before you go rushing to invest in a particular asset, take some time to find out why the various cryptos are spiking.
For example, Bitcoin has seen massive gains over the last year because institutional investors are beginning to flock over to the coin. They are investing as a hedge against a weaker US dollar. Others are viewing it as digital gold.
However, other cryptos, such as Dogecoin, are rising purely on speculation and pumping. Wall Street Bets and other social sites are advocating pumping the coins as a modified short squeeze play. Also, influencers like Elon Musk are mentioning the coin, causing mania buying. When picking a crypto, you need to sort through the mania and buy based on legitimate facts rather than speculation.
Compare the Prices of Various Exchanges
Something that many crypto traders don’t realize when they first get started is that the price of cryptocurrency assets is different on each exchange. For example, if Bitcoin is at 35,000 at one site, it could be 34,850 at another site and 35,250 at yet another site.
Live #Bitcoin price in US Dollar $BTC $XBT $BTCUSD
BTC Price Now : 32,933.60$ USD
Avg Last Hour : 32,589.91$
Avg 24 Hours : 33,355.17$
24h Change : -3.83%
24h Low : 32,277.87$
24h High : 34,235.82$
More information here https://t.co/RdBNr3VXaX pic.twitter.com/z9ou3b6iDU
— BTCtoCAD (@BTCtoCAD) February 1, 2021
As such, you should check out the pricing of crypto assets at multiple sites to see which exchanges will give you the best pricing. However, also pay attention to any fees charged by the exchange. For example, if the site that has a higher price is charging higher fees, the fees could offset the gains in pricing.
Beware Purchasing Crypto at Stock Exchanges and PayPal
You’ll see sites like Robinhood, Webull, and even PayPal offer the ability to buy cryptocurrency. Be very careful with these sites. While you can indeed purchase crypto assets, you cannot move them off of the sites. You can only buy, hold, and sell assets.
If you are buying crypto with the sold goal of selling it like a stock, then this could work fine. However, if you plan to HODL and want to physically manage your crypto assets, you cannot do that with these sites.
Only Invest Money Where You Can Safely Suffer a 100% Loss
Cryptocurrency is the most volatile form of investment that you can make. An asset that is worth $10 today could be worthless a month from now. We have seen the volatility of Bitcoin, but there are dozens of altcoins that have come and gone where people have lost all of their investment.
I’ve tweeted about this a few times & I’ll be honest, I’m worried for those who have invested funds they can’t afford to lose in #Bitcoin. Especially those who joined the party late. I don’t know when but I know it’s coming & when it does, there’s gonna be a lot of pain. https://t.co/blAjIURh73
— Mufid (@Mufid_A_Gonafer) January 29, 2021
As such, anytime you invest money into cryptocurrency, do so with the realization that you could lose 100% of its value. Certain assets like Bitcoin are a bit more stable in terms of retaining at least some value, but newer and lesser-known cryptos are not nearly as safe.
Don’t Be Afraid to Make Safer Players
Finally, there may be times where you want to make a more conservative play with some of your assets. For example, let’s say that Litecoin goes on a run to $250. You could sell the asset or continue HODLing. Adversely, you could also consider converting that Litecoin into an asset like Bitcoin or Ethereum.
Many crypto users will convert altcoin assets into Bitcoin to hedge against future losses. Bitcoin always seems to rebound and find a way to achieve new highs. This is not guaranteed with other cryptos. As such, you may want to take your gains and put them into Bitcoin to try and secure future gains.
This is like making 300% on Gamestop and then taking that money and investing it into Apple or Amazon. It is likely those companies will continue growing or providing dividends to customers. This is a way to continue growing your money. Consider making future plays with Bitcoin to secure additional future gains.