When a new entrant into the crypto market wants to start making investments for the purpose of making profits, they have to take into account a few simple truths that are universal and apply to all participants.
The first truth is that any injection of funds into cryptocurrencies as a means of investing entails a high degree of risk. There is no such thing as a guarantee on the crypto market and all participants have to come to terms with the fact that a lot of unpleasant events can and do happen within decentralized space. Exchanges and DeFi platforms are hacked on a daily basis, wallets and liquidity pools are drained by unscrupulous individuals, rug-pull tactics are employed by project teams, and funds are simply siphoned from trading venues. No amount of digital security measures will ever stop hackers from attempting to rip a piece of the lucrative pie that are crypto exchanges and liquidity platforms. If the hackers fail to penetrate the blockchain or the wallets of exchanges and DeFi services, they will employ phishing tactics to coerce users into giving up their wallet addresses and other access credentials.
The second universal truth is that all cryptographically generated assets are speculative by nature. Regardless of what headlines the crypto market may bristle with, heralding and extolling the application scenarios of the many digital currencies, the simple fact is that it will take a very long time before the array of digital assets out there manages to shake off the fetters of speculation that marked them so in early 2017 and 2018. Few actually have faith in the application of cryptocurrencies as useful instruments and means of payment on various blockchain platforms, because fiat can act as a perfectly reliable and usable, even much less volatile asset, compared to any cryptocurrency. Most users buy cryptocurrencies solely for the purpose of trading them for a profit and will hardly ever use them within the frameworks stipulated by their utility descriptions. It is enough to cast a passing glance at blockchain-based games to realize the underpinning reasons of said truth. The vast majority of blockchain games are ridiculously primitive, but their yield generating capabilities turn them into cash cows.
The third universal truth is volatility that is inherent to every single cryptocurrency. Even the so-called stablecoins experience fluctuations in price in relation to any other digital asset or to fiat. There are myriad reasons why, but the core one is the law of supply and demand, which affects the crypto market. The factors influencing the law of supply and demand, in turn, are more numerous and range from external factors like macroeconomic situations and international financial regulation, to internal ones like poor project traction, community dissatisfaction, hacks, and more. The inherent volatility results in the most important attribute of any cryptocurrency its ability to generate profits. It is pointless to invest in cryptocurrency assets without expecting their appreciation. Those who have made their fortunes on crypto trading will attest that they acted on a simple principle of buying on lows and selling on highs. It may sound primitive, but volatility is the essence of any currency, otherwise stocks markets and exchanges would simply never exist.
Once one has accepted the simple truths of cryptocurrency investing, they must start on the long and steep learning curve that will trace their path through decentralized space. It is not easy to acquire the vast amount of information needed to start trading, since it will not only require a large amount of time, but will also require users to evaluate the reliability and credibility of the selected source of information.
The first step is always deciding who will be the teacher, which source will act as guidance. Selecting a popular YouTube channel or a Telegram news feed is not enough, since one has to realize that most bloggers and channel administrators are paid to produce content. It is unprofitable to write texts and shoot video clips if no one pays for that. Projects of every kind are aware of the given fact, as are they aware of the fact that bloggers and YouTube channel administrators are eager to earn more through paid promotion.
As such, when selecting a channel for education and for tracing the potential of any selected asset of choice, users must first evaluate whether the selected source is not simply being paid to force an asset. And just as there is no such thing as unbiased journalism, so too is there no such thing as transparency in the world of cryptocurrencies and the prices they bear.
The next step, once a learning channel has been selected and studied, is to start applying the acquired knowledge in practice. The good thing is that many platforms used for trading crypto offer demo and trial modes, which do not require users to buy any actual assets and spend their savings. After trying trading for a few days in demo mode and seeing how the market behaves, users can determine if performing operations like trading is their solution or not. Some, however, opt for a simpler approach and simply buy a promising or leading cryptocurrency for holding purposes, waiting for it to appreciate.
The final step is actual market entry, which entails buying a cryptocurrency. No one will ever tell with complete certainty which cryptocurrency will generate yields and which will eventually rise to prominence. Users willing to enter the crypto market must understand that once they make a decision, they are largely left to themselves own and the decisions they make regarding investments, as well as the profits and losses they incur are their own affairs.