Frankly speaking, my first week in crypto was terrible. I opened an account, invested some money in a coin that was advertised on social media, and did not have any strategy. And if you are one of the people who wants to learn about crypto for beginners, let me tell you – the starting steps are crucial.
Here is what I’ve learned, so that you can avoid the troubles I went through.
1. Get Basic Knowledge Before Investing Money
Cryptocurrency is a digital currency working in blockchain technology. Imagine blockchain as a public book that is stored on many computers simultaneously. Thus, nobody can make secret changes.
That is what I did not do when I started investing. I wanted to get straight to the point. But guess what? If you do not know what kind of asset you are trading, every single fall in its price will make you scared.
So, spend a couple of days just getting the basics of Bitcoin, wallets, and private keys.
2. How to Safely Buy Your First Crypto
Buy from a reliable, regulated crypto exchange. Verify your identity, enable two-factor authentication (2FA), and create a robust password.
Here is a basic step-by-step approach:
Start with a low amount that you can lose
Choose popular cryptos, such as $BTC or $BNB
Steer clear of coins you’ve seen in any random Telegram groups
NEVER disclose your seed phrase to anyone
In my experience, the people who started small remain relaxed. The people who started big on their first day panicked at the slightest drop.
3. Crypto Wallet Basics: Where You Keep Your Coins
A crypto wallet is similar to your bank mobile app, except you are the bank. That is both empowering and risky.
Storing coins on the exchange is more convenient for beginners. Having your own wallet is more secure, but you are responsible for protecting your seed phrase. Write it down, keep it offline, and do not take a screenshot.
I once stored my seed phrase in my phone notes. In retrospect, that was foolish of me. Don’t do the same thing.
4. Popular Crypto Scams You Should Avoid
Fraudsters like to target beginners. Here are some signs to look out for:
“Painless profit” and “double your money” offers
Strangers contacting you through DMs regarding investments
Websites that require you to link your wallet for some investment opportunities
Pressuring you to make decisions quickly
General advice: if it looks like a scam, it definitely is. Real projects do not pressure you into anything.
5. Create a Simple Investment Strategy for Beginners
Most beginners buy when the price is high due to excitement and sell when the price is low due to fear. Planning can solve this problem.
One of the most popular strategies is called Dollar Cost Averaging (DCA). You make a deposit of a certain size at regular intervals, e.g., every week or month. Imagine buying groceries every week rather than spending your whole salary in one visit.
Dollar-cost averaging does not get rid of the risks, and prices may go down. However, it eliminates emotions from the equation.
Moreover, note down the reason behind each purchase. Is it for education purposes? Or is it a small side allocation? Having a reason will help you to stick to the strategy.
Conclusion
Being a cryptocurrency newbie does not mean that one needs to discover the next big thing. All it means is understanding the basics of crypto, being safe, going slow, and having a plan. Those four things alone will set one ahead of the crowd.
What was your biggest mistake when you were just a crypto newbie? Comment below; it may save another person from doing the same thing.