I have covered cryptocurrency frequently over the last few weeks as I believe it is a fantastic opportunity for people to make money if they do their homework.
Investing in cryptocurrency is not for everyone as the valuation of digital coins are volatile. Every day the price of coins goes up and down and this can be hard to take if you have a stake in it.
The Emotional Rollercoaster
You should never put money into an investment you cannot afford to lose. Investing money that you need for your home, your education, or your bills, means you cannot think clearly.
Not everyone adheres to this way of thinking.
I have been spending time in cryptocurrency communities. When the price goes up, everyone is super confident and thinks that they are going to be rich. When the price goes down, they talk about selling up. My guess is that these people have invested money they cannot afford to lose in cryptocurrency, which leads to emotions taking over.
My whole approach to cryptocurrency is to do as much research as I can and invest in coins I believe in. Prices fluctuate every day so the key is to look at the growth or decline of a coin over a period of weeks and months.
Of course, you do need to react to important news and buy and sell accordingly, but if you react to daily fluctations all the time, you’d go crazy. You need to take a step back and make rational decisions.
If you decide to step into the cryptocurrency world, you need to be able to react to changes in the market whilst recognising that the market goes up and down.
The more information you have, the more you can make advised decisions. Ideally, you always want to leave emotions out of the decisions you make.
Thanks for reading.