Cutting Down the Risks of Owning and Using Cryptos

Cryptocurrencies are some of the hottest things right now, and for a good reason, because people are now getting more alternatives when it comes to financial decisions and investing. Indeed, we would say that if you are yet to get down to cryptos or using blockchain services, it is getting late. Let’s demonstrate this with a person who bought Bitcoins worth US $1,000 in 2009 and is still holding the coins.

At inception, and up to around 2011, one Bitcoin was worth about US$1. However, that value has grown over the years, and by October 2021, its price reached US $62,400. That is enormous growth, and your initial US$1,000 would be worth millions of dollars. Is this not what every investor’s dreams? You know what? It is not just the value growth that is making cryptos attractive; there are dozens of other services, from staking to buying non-fungible tokens.

While these considerations are no doubt attractive, cryptocurrencies can be pretty risky. For example, news of DeFi platforms and wallets getting hacked is not uncommon. So, how exactly do you cut down these risks? Here are some expert tips to consider.

Invest in Pools

When investing in cryptos, going alone can be pretty scary. The hackers who target crypto investments have sophisticated technology, which might be challenging to match if alone. This is why you should consider working with DeFi platforms and pools. Note that this does not mean that these platforms are not risky, but they have a better capacity to use the latest technology to avoid hacking.

Still on the DeFi and investment pools, it will be an excellent idea only to commit some of the coins and leave the rest in your crypto wallet. Say, if you have 2,000 ETH, committing 50% of them for staking in a DeFi platform would be an excellent idea.

Protect Your Crypto Coins by Keeping Your Wallet Secret

When dealing with cryptocurrencies, one of the core requirements is a crypto wallet for storage. Well, there are many of them and it is prudent to compare the pros and cons of each before making the big decision on what to use. Once you select the preferred wallet, make sure to keep the private keys of your coins as private as possible. Revealing the private keys to anyone is like giving up ownership.

Diversify to Different Crypto Coins

At the start of this post, we demonstrated how Bitcoin’s value has grown from inception in 2009 to 2021, but this is not always the case with all cryptos. Indeed, there are cryptos that died out along the way because of poor conceptualization and governance. Therefore, you should consider diversifying to different coins to spread the risk and avoid getting knocked out in the event that one of them hits a dead end or value depreciates so much. For example, you might want to buy some BTC, ADA and ETH.

Have a Clear Strategy

Investing in cryptocurrencies is no different from other assets, such as stocks and real estate. The only variation is that you are dealing with digital assets as opposed to hard assets like houses and fiat currencies. Therefore, it will be a good idea to develop a good strategy. One of the commonest methods, which have worked pretty well for many, is buy-and-hold. With this strategy, you buy the coins and sell when the price peaks to optimize return on investments (ROI).

These are only a few tips that you can use; there is much more for you to enjoy from cryptocurrencies. Reach Hi to learn about these additional strategies, plus others to help you take advantage of cryptos. With an expert on your hand, you can never go wrong with cryptocurrencies and blockchain technology applications.

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