Ask These Five Questions Before Buying Any Cryptocurrency
Ready to buy into crypto? There are many good reasons to invest (yes, it can be an investment) in cryptocurrency. However, you should ask yourself these 5 questions first:
1. What is the history of this currency? While crypto is young, it has already developed a historical background, and certain currencies are more ‘seasoned’ than others. That’s also why they are more expensive. Typically, the more seasoned, older and POPULAR, a currency is, the more it will go for, and the more — relatively speaking — it will be stable.
2. What’s the “use case”? A lot of cryptos are pure speculation and casino action. You might get lucky, and yes, the chances are much better than Vegas, but you might not. Many are not that lucky. On the other hand, a lot of cryptocurrency coins actually have a use. Most of the time, that use is in part of the ‘Blockchain’. Blockchain is a type of database that stores its data in blocks, but more importantly, is decentralized. This means no one entity has control over that information. Buying a coin that has a use case is buying an investment. Another use case, for example, Dogecoin, is the ability to use it for everyday transactions, which is becoming more of the case with Doge and some other coins.
3. Can you afford to lose all the money? Even on the best of days, cryptocurrencies are still a gamble. While it's highly unlikely, you could lose ALL of your investment. In any case, you should not invest your rent, mortgage payment, or retirement funds. Think before you invest.
4. Are you easily spooked? Crypto is not for the faint of heart. It still is a market with severe ups and downs. You may lose out if you sell too soon or buy too late, but you also might lose out if you do nothing. Get ready for some stomach ulcers.
5. What do you know about this coin? It’s great to hear in the news about the newest crypto millionaire, but before you invest, you should seek out information and lots of it. Fortunately, this is relatively easy in the age of information. Head over to Reddit, Twitter, or Facebook and follow communities about the coin you are interested in. Then, you must take everything that is being said with more than a grain of salt.
Good luck investing in crypto and “Doge to the Moon.”
As always, I’m not a financial advisor. Everything I say is solely for entertainment purposes. Before making any investments, consult a trained investment advisor. You know the drill.
Hire me to be your next writer for features or technical writing. You can also find me on Twitter if you’re really bored.
