We have seen an increase in cryptocurrency trading activity over the past month or so, and the popularity of ICOs is definitely growing, which is great news for cryptocurrency enthusiasts.
It’s a great time to invest in crypto assets as the market has started to stabilize.
However, there are some important caveats to keep in mind when considering how to use cryptocurrencies to make a profit, and these are the things to keep an eye out for in crypto.
We’ve highlighted the most common pitfalls in this space, and we’ve put them in bold to help educate those who may not have realized them yet.1.
Over-reliance on a single ICO and a single exchange.
We are not suggesting you ignore one exchange as an alternative.
There are many excellent altcoins that have a great reputation for their service, including Bitcoin, Ethereum, Litecoin, Dogecoin, Ripple, and others.
But be sure to understand how the ICOs are priced and how the platform works.
For instance, DoDcoin is priced on exchanges like Bitfinex, Bitstamp, Bittrex, and Kraken.
The coin is only traded on the ICO exchange and is not traded on other exchanges, which means the price of the coin will fluctuate depending on the exchange.
It is best to avoid the ICO bubble, as it can easily create a large amount of illiquid assets.2.
Using a “one-hit” coin.
If you decide to invest your money in a cryptocurrency because you are looking to make money quickly, you will not be in the right mindset for cryptocurrency investing.
A coin with a one-hit release is risky, because you could potentially miss out on the profits if you don’t wait.
A cryptocurrency like DogeCoin has a low price, so you may not be able to make much profit.
It also has a very small user base, so users who may be interested in buying it should be cautious.
If there is a large volume of buyers and sellers in the market, it could be a one hit hit.3.
Using an ICO “one day at a time.”
This is the way to go.
Do not invest your time or money into one cryptocurrency for the entire month, as a single launch could be quite lucrative for the individual who invested.
Do a short ICO and see how it works out.4.
Investing in one cryptocurrency, one ICO at a particular exchange.
While it is possible to use one exchange for all your cryptocurrencies, it’s not always advisable.
Many ICOs will require you to buy a specific coin to make your investment, which can be quite costly.
Instead, try to invest as much as possible in a single coin, such as Ethereum or Dogecoins.5.
Buying cryptocurrencies on exchanges with high fees.
We do not recommend this approach.
While a one coin is certainly cheaper than a thousand coins, the exchange rate may vary wildly, and it is much more risky to buy cryptocurrencies on an exchange that charges fees to process transactions.6.
Using multiple exchanges.
It may seem like a great idea to buy your cryptocurrencies on a different exchange at the same time.
However: There are two reasons why this is not a good idea.
First, many exchanges will only accept cryptocurrencies that have already been launched, and they will charge fees to facilitate transactions.
If the exchange doesn’t have enough funds to cover the fee, it will likely have trouble meeting its end-of-month goals.
Second, there may be an ICO that is not in the best of health.
There may be a shortage of coins and the price could spike too high to sell.
For example, Ripple Coin, which had just announced its ICO, has been trading at an average price of over $1,500 per coin, which seems very high.
This cryptocurrency could easily go from a small number of coins to a significant amount of coins.7.
Avoiding ICOs that are closed.
While there are many good ICOs out there, some may be closed or restricted by the ICO regulator.
These closed ICOs can be a real pain for investors who are looking for some kind of quick and easy way to gain exposure to a cryptocurrency.
If this is the case, there is no point investing in a coin that is closed, as the platform itself could easily be shut down in a matter of days or weeks.8.
Invest in a “pure” coin, like Dolecoin.
Doge, LiteCoin, and other altcoins are great choices, and can be enjoyed by anyone.
If they have any kind of regulation or regulation is not strict, they may be hard to track and will be difficult to profit from.
If a coin is not listed on an official exchange, it is hard to determine whether or not it is a legitimate coin.
Therefore, investing in Doge or LiteCoin is not necessarily a good move.9.
Avoid using a cryptocurrency for trading purposes.
Some cryptocurrency platforms have been hacked and