The 5 Biggest Mistakes New Crypto Investors Make

Investing in crypto can be exciting, but many investors crypto recently fell into a common trap when it comes to trading and investing in cryptocurrencies. 

From poor security practices, to a lack of knowledge about the crypto market, newbies can quickly lose money. So, we're going to cover five of the most common mistakes that novice crypto investors make.

List of Mistakes New Crypto Investors Must Avoid

Below are five mistakes that many novice crypto investors make. If you are one of them, please avoid this mistake.

Lack of Basic Crypto Knowledge

New crypto investors may be attracted by all the hype surrounding Bitcoin and other cryptocurrencies, but investing in crypto requires understanding asset classes and how they work.

Investing in assets you don't understand, or trying to trade crypto without understanding the basics of how cryptocurrencies work is a disaster.

Taking the time to educate yourself about the different crypto projects, and the goals of each crypto company will make you a better investor.

Short Term Thinking

The promise of “get rich quick” in the market makes many new crypto investors only think short term. And while there is a possibility of making huge profits on crypto investments, there is also a possibility of losing all the funds due to a bad investment move.

Having a long-term investment mindset will help choose crypto investments more carefully, and concentrate on choosing higher quality projects with a long track record.

Trying to get rich in 90 days is a quick way to go broke, but thinking of crypto investing as a multi-year process will help build crypto portfolio wiser.

Easy to Get Scamming

As a new asset class, the cryptocurrency market is full of scammers. In fact, the Federal Trade Commission (FTC) reported nearly $700 million crypto assets stolen in 2021 alone.

These criminals use advanced phishing techniques to gain access to crypto wallets, and convince them to transfer funds to their wallets.

Crypto scams can take place via email or messaging apps, with the perpetrator pretending to be acting in your best interest.

Wallets can be compromised simply by connecting an online wallet to the app and granting it permission to access funds.

And while this is a common practice for many crypto apps, scammers can use this technique to drain crypto wallet funds.

Use of Leverage

New crypto investors may be lured by stories of poor to rich through crypto trading, and try to take advantage of leverage to multiply profits.

The problem is that trading with leverage requires collateral up front, and if the trade goes badly, you may lose all your funds. Remember, leverage works both ways, and it can multiply your losses too.

Also read: How to Learn Crypto To Start Trading, Read This!

Bad Trading Strategy

New crypto investors trying to dive right into complicated trading strategies as some YouTubers tell them can lose money fast, and give up crypto entirely. It takes time to learn technical analysis, conditional orders and how the crypto market works.

Also read: These are Crypto Trading Hours You Should Know, Big Money for Sure!

Those were the five mistakes most crypto investors who are just starting out make. If you still do it, immediately fix the error.