INTRO

In the cryptocurrency world, mistakes can cost you anything from a few dollars to practically
losing your entire capital overnight.
The good news is that these errors can be completely avoided if you know what to watch out
for, and that's exactly what we'll be discussing in today's video. Let’s examine the errors we
constantly see people making when they first begin in cryptocurrency. Before we head on to that
subscribe to our channel if you haven’t yet, click the like button and ring that notification bell for
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cryptocurrency.

Alright, so the first error people make in crypto, which may seem minor but has arguably the
biggest impact, is forgetting to have a plan for their investment approach.
Now it's quite simple to jump into crypto, invest your money in a meme coin, and wait for it to
multiply 100 times. Now, sadly, we both understand that's not precisely how it operates. Just
like I've previously stated, having a budget is necessary because it enables you to observe
precisely where your money is going and might improve your financial situation. The same
principle still applies when investing particularly in crypto, you must have a plan or strategy in
place.
What I recommend doing now is outlining your goals. For example, are you attempting to create
a long-term portfolio? Are you attempting to buy large-cap coins? small-capacity coins? Are you
attempting to increase your passive income?

There are many different ideas you may implement, and writing them down encourages you to
learn more about the coins you're purchasing and gain a more thorough understanding of them.
This action plan you just formed will also enable you to be a little emotional when the markets
get horrible, which they do, believe me. It also stops you from panic selling when issues arise.
Being the person who liquidates their entire portfolio when everything is falling apart is the most
devastating thing you could ever do to yourself. This nicely leads me into the second error I see
people making, which is purchasing high and selling low. You don't intend to do that. Despite
the fact that doing this is completely against what you want to achieve, everyone has tried it at
some point in their investment career.

Because people are emotional, we frequently observe that when the value of the coin increases,
these beginners experience FOMO, or fear of missing out. They invest when the coin's price is
rising, and when the next day or the following week comes around, the enthusiasm has
somewhat subsided and the price has really begun to decline. Now that they have lost
confidence in their investment and believe the currency is worthless, they sell it for a loss. If
you've done this before, don't feel bad; in fact, I've done it myself, and I know for certain that
many other people in the field have as well.

FILLER
How do you approach trading or investing in crypto? Are you emotionally attached to it? Have
this conversation with us in the comment section below.
The investment strategy we just discussed can help you remember all the research you've
completed into this coin's durability and can also help you relax a little bit. This is one way to
prevent getting emotional. Now, you can also practice a technique known as dollar cost
averaging, which may sound like a sophisticated term but is actually quite straightforward. It
means that rather than investing $1,000 all at once, you'll spread it out over the coming days,
weeks, or even months. Let's say, for instance, that you want to invest $1,000 in Solana, well
that is good. Instead of investing it all at once, you may invest $250 over the course of the
following month, lowering your chance of investing at the wrong time. Since the prices ought to
be comparable. The final thing I'd like to say regarding this is that it's really difficult to remain
emotionally stable in the crypto market, or any market, for that matter.

The best course of action is therefore to learn to handle your emotions, and the best way to do
this is by messing up. You may learn the most from making errors, therefore don't feel bad
about doing so. Just be sure to be the buyer of these coins rather than the one who follows into
the corrections when they occur. The following error that users need to prevent is de-genning
into the following 100x gem that they know about. Now, it's normal for beginners to hear about
all these incredible returns, like those of shiba or dogecoin, and invest their entire savings into
what they believe will be the next 100x coin. When in actuality, it won't make a difference in their
life or fix all of their problems. People tend to forget about all the coins that ultimately failed.
See, You and I only learn about the outrageous returns because that's what the news outlets
report on. Therefore, for every coin like Sheba, there are possibly 10,000 additional coins that
you are unaware of since they simply failed. The majority of people nowadays use this method,
which you might equate to purchasing a lottery ticket at the gas station in the hopes of winning
the big prize. The taxes are one of the many drawbacks that players of this kind of memecoin
game neglect to take into account.

If you reside in the US, you should be aware that there are taxes on both short-term and long-
term capital gains. In other words, if you hold an investment for more than a year and then sell
it, you'll actually pay a lot less in taxes than if you sold it after a year. Therefore, if you're buying
and selling these speculative coins, your tax rate will actually be much greater than if you were
simply investing and holding the money in a long-term portfolio. When tax season arrives, you'll
not only be struck harder but you'll also have to pay a lot in commission fees, which will reduce
your profit. If your typical commission for buying is three dollars, then if you were investing thirty
dollars, you would now have only twenty-seven dollars. Then you'll have to sell, which will cost
you another three dollars, making a total loss of six dollars or twenty percent of your investment
due to commissions. Not to mention that spending an entire day investigating these coins and
joining Discord groups to determine whether they are scams or have potential is incredibly time-
consuming. You are essentially making all of that work a full-time job. Now, I advise investing a
modest portion of your portfolio in these gems or memecoins rather than all of it, and keeping
the majority of your funds in the higher cap currencies. With this approach, you can still benefit
from the exposure that these speculative coins provide while also being safer with the large cap
coins. In addition, you'll save a ton of time and effort.
In relation to the cryptogems, buying coins because they are inexpensive is another major
mistake I see individuals doing in the cryptocurrency world. What do I mean by it then?
Dogecoin is only 15 cents, so you might believe that by the time it reaches bitcoin's worth of
roughly $45,000, you'll be the third person after Jeff Bezos and Elon Musk to become a
millionaire through the sale of pop bottles. The problem is that's entirely incorrect; in fact, it's
practically impossible. You see, when looking at coins, you need to be comparing their market
caps. Which is essentially its price multiplied by the quantity of coins available, as, for example,
the reason why, say, dogecoin is so much less expensive than bitcoin is that there are simply a
ton more dogecoins in circulation.

As a result, when calculating the value of coins using the market cap equation, a coin with
billions of coins in circulation will be substantially less expensive due to the sheer volume of its
supply. When you start comparing coins based on their market capitalization, you can really
begin to plan or strategize if it's really possible for something like dogecoin to outperform bitcoin
in terms of pricing. And to give you an example, let's assume you believe that dogecoin's price
is low and that it will eventually rise to roughly $45,000, the price of bitcoin. Dogecoin's market
cap would have to increase by something like 4,000% if that were to occur, which is incredibly
implausible. What you need to understand is that a coin's price does not necessarily correspond
to its value; instead, when comparing other coins, you should consider their market caps rather
than their prices. Leverage is yet another major error individuals make when it comes to
cryptocurrencies. Leverage now refers to borrowing money to invest or short cryptocurrency.
Let's imagine you only have $1,000 to invest and you believe the price of ethereum will
increase.

FILLER
Before we proceed, let us know in the comment section what you think are the other mistakes
many investors make in trading crypto?

Let’s say you want to invest more money since you are quite positive that the price will increase,
you can leverage your position by borrowing money, so you could have, say, $5,000 available
for investment. Therefore, rather than making only ten percent on your investment as you would
have without borrowing or employing leverage, you will make five times as much, or fifty
percent, if the price increases by ten percent. Since you've started to understand why this is so
appealing to people, it should be clear why a lot of them just lack the funds. Additionally, using
leverage allows you to use a lot more money that isn't even yours, increasing your return.
Therefore, if you believe the coin will fall, you can also borrow money or utilize leverage to
wager against it. This is known as shorting, and it involves borrowing cryptocurrency, selling it,
and then waiting for the price to decline before buying it back at a cheaper price and earning a
profit.

That probably left a few people confused, so I won't go into too much detail, but that's really
all there is to know about shorting. You gain financial gain if the price of a coin decreases.
Everything appears to be going well when it comes to leverage or borrowing in the
cryptocurrency world, but if you make a bad assumption, all the funds in your account will be
liquidated, meaning you will lose everything. The account would be liquidated, for instance, if
you had $5,000 invested in a cryptocurrency and it fell 30%. Considering that the value of the
coin has decreased by 30%, you now only have $3,500. However, you are still obligated to pay
the exchange $5,00 plus interest for the use of their borrowed funds. This indicates that in order
to pay off your debt, you would need to find an additional $1500. In that situation, it would have
been more sensible to utilize your own $1,000 that you already have and just lose $300 of it.

Another error and possibly the most significant one, is failing to enable two-factor authentication
for all of your accounts. Hackers abound in the cryptocurrency realm, so you must safeguard
your money. The term "2fa" refers to the requirement that you provide two forms of
authentication in order to sign into your account. While this requires an extra step and may take
a bit longer, it could potentially save you your entire portfolio. The typical method of operation is
for you to enter your password as one form of authentication and have a unique code sent to
your phone as the second. This is a secure method because there is a low probability that a
hacker will gain access to your phone. I advise downloading an authenticator software like the
one from Google, which provides you with a fresh code every 20 seconds or so. And I believe
it's the safest course of action, as I don't believe anyone will break into Google servers any time
soon. The last error I keep running into is sending transactions to the incorrect wallet address.
Because cryptocurrency transactions are irrevocable and permanent, if you unintentionally
misspelled just one character in your address, you will never be able to get your money back.
To prevent this, I'd advise sending a tiny test amount before making significant transfers to
ensure that it gets through to your other wallet. You will be able to save a ton of money and
hassle by doing this. The qr code feature can now be used in place of copying and pasting
wallet addresses if you don't trust yourself to do so.

OUTRO
These were only a few of the faults you should attempt to avoid when it comes to
cryptocurrency, as it eliminates human error in mistyping the wallet address. You should also
aim to steer clear of other things like not diversifying enough and not having a wide variety of
cryptocurrencies. Because if something were to happen, you'd be in serious trouble if you were
limited to simply clutching one. That’s if for today, if you liked this video, let us know by clicking
the like button, subscribe to our channel and ring that notification bell for more updates. This is
Crypto Global, the right channel that will feed you anything about cryptocurrency. See you in our
next video!