Crypto investment: how beginners get started and avoid mistakes

Investing in cryptocurrencies attracts attention to the possibility of making quick money, especially in unknown tokens that sometimes grow by thousands of percent.

However, this area has its own risks, and for a successful investment it is important to know where to start, how to reduce risks, and also take advantage of expert recommendations.

Analysts and financial advisors of the KIT Group, the founder of the Web3-university of future professions Learn to Earn Global Mikhail Patsan spoke about this in an interview with PaySpace Magazine.

Risks of investing in crypto

First of all, future investors must understand the risks to avoid financial losses and start formulating effective strategies. Mikhail Patsan identified some key risks of crypto investments:

• High volatility. Cryptocurrency prices can fluctuate wildly, making the market unpredictable.

• Regulatory risks. The new law may affect access to crypto exchanges.

• Risk of scams. Not all projects are reliable, many of them can be deceptive.

• Safe risks. Loss of private keys may result in loss of funds.

Advantages of investing in crypto

•High profitability. Some cryptocurrencies, such as Bitcoin and Ethereum, show significant growth.

• Decentralization.Cryptocurrencies are not regulated by central institutions, reducing reliance on traditional financial systems.

• Participation in new technologies. Investing in cryptocurrencies provides access to innovative projects such as decentralized finance (DeFi) and non-fungible tokens (NFTs).

Conservative approach at the beginning

For beginners, experts advise using a conservative approach. KIT Group analysts note that it is important to avoid a common beginner’s mistake—a huge risk. “Many crypto assets disappear quickly, so it pays to make an effort to understand the market“, experts note.

For beginners, it’s important to keep your portfolio stable when starting your investment journey. Only after gaining basic skills and experience can you gradually invest more money.

Tips for Newbies

Mikhail Patsan recommends some principles for beginners.

• Research project.Only invest in projects with clear goals and functionality.

• Avoiding the hype. Do not rely on information from unverified sources. Better to focus on market analysis.

Three crypto portfolios

KIT Group analysts revealed the features of several key crypto-portfolios depending on the level of experience and risk tolerance: “First Starter”, “Balanced” and “Aggressive”.

First starter– for beginners. The main objective is to learn the basics of investing while minimizing risks. Recommended distribution:

• 60% in stablecoins (USDT/USDC) for stability;

• 15% in Bitcoin (BTC) and 15% in Ethereum (ETH) for moderate income;

• 10% for experimenting with lesser known cryptocurrencies.

Balanced— for more experienced investors willing to experiment with new assets, including up to 30% lower-risk cryptocurrencies. Diversification is important – no more than 10-15% in an asset.

Aggressive– for experienced investors with higher risk tolerance. This portfolio is formed based on the earnings of the predecessors. It is important to adhere to the principles of diversification and constantly review the asset composition of all portfolios.

“Even when tempted, don’t hold on to your pastedvAportfolioI. Make risky investments with the profit or part of the profit from it. Crazy profits are the exception. You should not trust those who try to convince you otherwise. If crazy profits were the rule, only billionaires would inhabit our planet.”– emphasized in the KIT Group.

Conclusion: Successful crypto investors must be aware of the risks and rewards, take a conservative approach when starting out, and always carefully research the projects in which they plan to invest. This is the only way to succeed in this dynamic and risky investment area.