Cryptocurrency is a hot commodity in the finance world right now. It’s no wonder that so many people are trying to jump onto the bandwagon and get their share of crypto. While it’s incredible that more crypto investors are joining in, some have been too quick to rush into the process and have made big mistakes. Here are three of them:
Mistake #1. Using Emergency Savings
One mistake that some people make when they race into crypto investing is they use hard-earned savings from their emergency fund to purchase the crypto that sparks their interest. The line of thinking is that they have all of those savings just sitting there, which makes them the perfect resource for buying into the new investment. Plus, crypto is sure to make those savings grow!
There are a couple of issues with this plan. For one, you can’t expect crypto to help you multiply your savings in a hurry. Cryptocurrency is notoriously volatile, which means that you can’t guarantee that your investment will grow.
Another problem is that you have removed a crucial safety net from your financial portfolio. Your emergency fund is meant to help you cover urgent, unplanned expenses that could otherwise disrupt your budget. Now that it’s gone, you’re going to have limited options on how to cover an emergency when you don’t have enough savings on hand.
What can you do in that case? You could put the charge onto a credit card and then pay down the balance later. Or you could check to see whether you’re eligible to apply for an online loan. Check to see what online loans are available in your state. So, if you live in Anchorage, you should look for online loans in Alaska when you’re trying to cover an emergency expense. This way, you won’t waste any time filling out your application.
Mistake #2:Forgetting the Password
You would be shocked to find out that many people lose out on Bitcoin investments because they’ve forgotten their passwords to their digital wallets. So, to avoid this mistake, you should write down a copy of your password and keep it in a safe or lockbox in your home. This is helpful for several reasons:
- You can find your password when it comes time to mine your investment.
- You can keep your password away from prying eyes, so your investment is safe from being tampered with or stolen.
- You can keep your password safe in case of disasters like floods or fires.
Mistake #3:Choosing a Sketchy Currency
Fraudulent tokens and platforms can trick investors that haven’t bothered to research whether these entries into the market are legitimate or not.
One of the most recent scams is the Squid Games Token — this token took advantage of the popularity of the Netflix show Squid Game to entice investors. Investors who got these tokens found that they were blocked from selling, meaning they couldn’t cash out on the investments that they made, despite the skyrocketing value. The Squid Game token isn’t the only example of this. These are plenty of other big cryptocurrency scams that have happened recently.
Stick with cryptocurrencies that have been in the market for some time. If you’re going to invest in a new token or go to a new platform, do your research and have a critical eye to make sure you don’t get swindled.
While there’s always some risk when it comes to cryptocurrency, you should avoid taking these additional risks when you invest.
