As the cryptocurrency realm carries on attracting investors with its promising potential and remarkable returns, it is pivotal to heed that this industry also comes with its fair share of risks. Crypto can be extremely rewarding, but it requires a unique approach — disciplined and cautious, and at the same time versatile and adaptive. In order to take your crypto trading several stages further safeguard your digital investments, adhering to crypto investment hygiene is essential. Here are some vital guidelines to keep in mind — from the basic to insightful: 

Invest What You Can Afford to Lose 

A simple and seemingly obvious rule, but it still tends to be neglected mostly by beginners. The lack of proficiency and knowledge, catalysed by the exaggerated belief of “an always profitable sphere”, leads to extreme losses and tremendous disappointments. This issue is not limited to a crypto community, as it emerges from the basic financial illiteracy. 

Hence, it is essential to critically assess your trading budget, or stick to meticulous research and take up ledger trading or crypto borrowing. 

Security is Everything 

Yet another apparent tip at first glance, but a constantly growing number of crypto hacks voices a contrary position. Although blockchain technology is the most advanced in case of security and hack resistance thanks to its technical structure, it is crucial not to forget that everything has a weakness. Untrustable crypto exchanges, unreliable wallets, and an overwhelming attention to the industry by marketing fraudsters and scammers jeopardise the sphere and users’ balances. The ultimate rule: do not get tricked by the “ultra-profitable” newly emerged projects or exchanges with 150x leverage. Be sceptical and choose the most robust and certified ones instead. 

Examples of cryptocurrency exchanges with advanced security: Crypto.com, Kraken, WhiteBIT, Coinbase. 

Diversify Your Portfolio 

Diversification has proved its effectiveness throughout the time in the investment world, and it also applies to crypto. In order to reduce risks of severe losses, spread your capital within different digital assets. Consequently, whether a certain coin experiences a dip, you can level your P&L with other currencies and pick up a more flexible investment strategy. What is more, portfolio diversification allows users to stay versatile and contributes to the erudition of the sphere. 

Stay Up-to-Date 

The world is changing at a dizzying rate, however even its alterations would seem painfully slow compared to the crypto industry. The informative field is always updated with new releases, details, and events. Given the cryptocurrency’s dependance on the physical world, it is a foremost necessity to keep abreast and constantly monitor not only the market fluctuations, but also the community dimension in order to receive the newest insights. 

Security Tip: staying up-to-date can also refer to user devices. Always update your software to decrease the chances of breaking in. 

While these seemingly glaring rules are fundamentals of the crypto sphere, they are just a tip of the iceberg. The genuinely core principles to follow, which I mentioned below, are not also lifesaving — they also create the basis for the tips mentioned above, and their neglection can threadfully impact as a single user as a whole crypto community. 

Informational Consciousness and Personal Research 

In addition to the previous principle about staying up-to-date, informational hygiene is at its utmost. Due to the cryptocummunity’s activity, the info field is littered with scams, bots, and spam, not mentioning the manipulations and fakes. It is much easier to absorb every piece of content compared to giving it a proper thought, but the first point will undoubtedly have its prolonging consequences. Critical eye, scepticism and neat fact-checking should become your pivotal tools (especially on Twitter). Do not believe in unproved information however reassuring or depressing it is. Our brain is fond of making cognitive and informative errors, thus always question every piece you perceive. And crucially — do not appeal to authority. Even the most mature make mistakes. Do your own research and prioritise this golden rule. Regardless of whether the outcome did not meet your expectations, do not hesitate to make mistakes — they are just stages on the path of shaping your own, unique perspective on crypto. Hence, do not believe even me without proper fact-checking and do your own research instead. 

Investment tip: whether you did meticulous research and are definitely sure about a certain project’s promising potential, try to take part in its ICO (Initial Coin Offering) or IDO (Initial DEX Offering) to purchase the asset for a lower fixed price. It will be simpler by monitoring launchpads — specific platforms which maintain the offerings. The toolkit was recently announced by WhiteBIT — one of the largest cryptocurrency exchanges in Europe — which is famous for its security. 

Master Your Mentality 

Trading has always been a realm about emotions and cognitive state, and crypto has intensified their meaning. The brain traps trading makes are major obstacles, and despite the widespread belief, this aspect can not be levelled only by the analysis. Cold head, intuition, and detailed research — only this effective fusion will bring unprecedented results. 

All common mistakes of buyers at high and sellers at low from emotions. Racing towards great profits, they rashly resort to suffering from such cognitive tricks as Fear of Missing Out (FOMO), and Fear, Uncertainty and Doubt (FUD). Avoid making hasty decisions and stick to your investment plan even when the market fluctuations seem irrational. 

Accordingly, before jumping into the crypto market a position, determine your investment goals and assess all the risks, and after that, coin your personalised strategy, tactics, and precautions. Deep planning is everything — it will not ensure success, but will definitely decrease the losses. 

Conclusion 

While investing can be a thrilling endeavour, it is vital to remember that it requires research, discipline, and vigilance. Following these crucial guidelines for crypto investment hygiene can result in enhancing your chances of making well-informed decisions, protect your capital, and participate in the crypto market with greater confidence. Remember the essential rule: responsible investing is the key to success in this rapidly evolving landscape.