5 mistakes people do when buying bitcoin or crypto-currency.

There are more than 5000 Crypto-currencies in market, Bitcoin is one of them. Bitcoin is popular because it is first cypto-currency, and people have more trust on it. You can see list of all crypto currencies on coinmarketcap website.

When people buy the Crypto-Currencies, they often make some obvious mistaks. We have compiled a list of common mistake which people make.

1. buying coins without knowing crypto market.

First thing you need to understand is how crypto market works. People come without knowledge and make some of the obvious mistakes in their first purchase.

You need to understand that Crypto currency or coins are not backed by any physical assets. If some day no body want to buy bitcoin, the value will be zero.

Currency notes were backed by Gold. RBI (Reserve bank of India) use to keep Gold in reserve, So that they can print new currency notes. Now this system is not that accurate, But still currency notes are backed by trust from Govt.

In stock market, company shares you buy are backed by assets (land, office, factories, bank balance). So shares can never become zero, until company is working fine, and making profits.

So understand the crypto market before buying coins.

2. Making decision based on youtube videos and news.

You will see so many infuencers on youtube and blogs. It is important that you take other's opinion. But rely completely on others opinion is a big NO.

If people influencing you from youtube vidoes, news are so confident. then they would have invested their money. Crypto market is very volatile Learn about the crypto market and don't fall for fake news.

3. Selling all coins when market start falling.

FOMO (Fear Of Missing Out). When ever there are rumours in the market, we think that we will miss out the opportunity if they do not buy/sell now. Don't sell all your coins at once. because you don't know how market will react to rumours.

Sell only some coins, so that you can buy them back at lower price. When the Covid-19 pandemic broke out, everyone thought it is going down, and it will become zero.

Then price of Bitcoin droped to almost ~ $2500. And now it is more than $41,000. So Don't sell all your crypto assets when market is falling.

4. Buying cheap penny coins.

We always hear high risk high reward. What we need to understand is, high risk means 90 - 95% chances of failure. Altcoins are definitly a good alternative to Bitcoin. But, you need to make sure that you are investing in only those coins which are popular.

Normaly people buy cheap Altcoin which never takes off and regret it later. So Don't invest in cheap coins.

5. Investing all the savings in Crypto.

Some people put all their money in crypto market and then borrow money from friends to buy more coins. This decision can either take you to sky, or bury in the debt. You need to understand that this market is very volatile.

A coin can double, tripple overnight, and also it can lose its value 10 times. So you invested 50,000 ₹ can become 1,00000 ₹ or it can become 10,000 ₹ also.

Beginers tip:

If you want to play a little safe and earn good returns. Invest in top 10 coins. Everyone knows about top 10 coins and people invest in them. you can easily find top 10 coins from coinmarketcap website.

There are very little chances of a coin from more than 5000 coins to jump to top 10 which is like a winning a lottery.