As the most popular cryptocurrency, Bitcoin attracts much attention and is the preferable digital currency for many investors. However, you must never invest blindly in this currency, as it could quickly turn out to be a costly mistake. To stay safe, here are five mistakes to avoid when buying Bitcoin.
1. Not choosing a reputable crypto trading platform
Among the first steps you need to take when you decide to buy Bitcoin is finding a reputable crypto trading platform to guarantee safe and smooth transactions. If you choose to buy in Canada, go for an exchange that:
- Allows you to buy cryptocurrency directly from your bank or through e-transfer
- Is secure and whose authenticity has been verified by other crypto investors
- Is simple and user-friendly
- Offers timely customer support services
- Supports rapid transaction times
2. Failure to acquire a Bitcoin wallet
The safest way to hold your digital tokens after buying them is to store them in a crypto wallet. Your e-wallet acts like a regular wallet by providing you with a safe and secure means of storing your digital currency until you are ready to sell or trade them. A word of caution is to ensure you keep your ewallet password safely to avoid losing access to your Bitcoin.
3. Lack of prior research
Too many people are investing in Bitcoin because of the fear of missing out (FOMO), as it seems like everyone is into the crypto world. This is a terrible investment mistake as you will only be buying Bitcoin based on emotion or hype. To avoid this, make it a priority to research and understand the crypto world, risks involved, current token performance, and general market conditions. This will help you time your entry into the market and be mentally prepared to sail through the market’s high volatility.
4. Investing more than you can afford
With many analysts portraying Bitcoin as the best cryptocurrency in the market, most beginners tend to use this as an excuse to go all-in when buying these digital tokens. Unfortunately, this is the quickest way to suffer huge losses as your invested capital could significantly lose value given the volatility of these markets. To avoid these frustrations, the best move you can make when buying Bitcoin is to build your way up by only investing capital you can afford to lose.
5. Falling for scams
There are too many crypto scams today, and you should be aware of them as you buy Bitcoin. Firstly, you should discard the illusion that crypto is a channel for easy money. Secondly, you need to avoid common scams such as:
- Spoofing, whereby scammers inflate or deflate the price of a crypto token in a trading platform to entice you into buying more
- Multiplier scams where you receive promises for rapidly growing your tokens if you take advantage of a provided “investment opportunity”
- Malicious wallets that have been created to steal from you once you store your tokens in them
- Fake news and analysis that scammers use to grab your attention and influence your investment decisions
Endnote
The world of cryptocurrency is complex, and you need to be careful when buying Bitcoin to avoid losing your hard-earned money.
