10 Rules of Investing in Crypto

This guide outlines 10 key tips for having success investing in cryptocurrency. The crypto space presents unique prospects but also challenges and risks not encountered in traditional markets. Extreme volatility, technical complexity, and regulatory uncertainty can overwhelm new investors. But by following the core principles of strategic asset allocation, secure storage, dollar-cost averaging, and buying fundamentally strong projects, you can carefully include crypto as part of a well-balanced portfolio.

Key Takeaways

  • Investing in crypto, still a new and volatile asset class, follows many of the same rules as investing in other markets.
  • The most important rule is never to invest more than you can afford to lose. 
  • Safely storing your crypto in a secure wallet or with a trusted custodial service is essential.
  • Approach this market with eyes wide open, ready to commit for the long haul based on firm convictions, not short-term speculation.

1. Never Invest More than You Can Afford to Lose

Cryptocurrencies are still relatively new and extremely volatile assets that can gain or lose significant value in a single day. While the long-term trend has been bullish, there is still skepticism and opportunism in these markets.

For that reason, the first principle is only to invest an amount of capital that you are fully prepared to lose should the market take a downturn. At the very least, you should have enough emergency savings before putting any funds into crypto. Once you’re ready to invest, you should make it no more than 5% of your portfolio. This is enough to gain exposure to potential gains while limiting the impact of losses on the overall portfolio.

2. Use Dollar-Cost Averaging

Use dollar-cost averaging for crypto, which is making small, recurring purchases on a set schedule, such as weekly or monthly. Automate these purchases through an exchange rather than

Read More