Cryptocurrencies have attracted a lot of interest from retail investors in India. In fact, 2021 was an important year for her. However, recent discussions about “cryptocurrency and regulation of the official digital currency law” have led to much speculation.
The bill “seeks to ban all private cryptocurrencies in India,” which has yet to be discussed in Parliament.
For people looking to invest in cryptocurrencies in 2022, experts said that decisions must be based on smart thinking, taking into account volatility and sudden market crashes.
Here are the top tips to follow:
Understand volatility
Speaking to CNBC-TV18, GoSats CEO and co-founder Mohammed Roshan said that 2022 will be a volatile year for crypto and one could see a significant correction in prices.
Therefore, it is crucial for investors to understand this.
“I would recommend traders to focus on the more prominent cryptos that have strong histories and not delve into tokens they don’t understand, with price action that seems too good to be true. When the bear market hits, these underperforming tokens will be washed out, leaving investors in despair. Even with prominent tokens, it is prudent to only invest what they can afford to lose,” Roshan said.
Maintain a healthy portfolio
According to Sathvik Vishwanath, CEO and co-founder of Unocoin, it is important to maintain a healthy portfolio, which recommends young investors invest up to 10 percent of their exposure in crypto and veteran investors not to invest more than 5 percent in cryptos.
“Investors who choose to trade as a full-time career need to keep up with the rapid developments in the industry and understand various emerging technologies such as DeFi and NFTs, etc.,” Vishwanath said.
Never take out a loan or use a credit card to invest in cryptocurrencies
Taking out a loan or using a credit card is a bad idea to invest in crypto, Vishwanath said.
“These markets are highly speculative and no one is obligated to buy back these cryptocurrencies from investors in the future,” he said.
Never invest without doing a background check
According to Sumit Gupta, Co-Founder and CEO of CoinDCX, developing an understanding of the topic through extensive research on credible platforms and educating yourself is the fundamental core before making any financial investment decisions
“New investors building their knowledge base can invest in more popular crypto assets like Bitcoin, Ethereum, etc. with an attitude of understanding the underlying technology. It is appropriate to take such steps to make informed decisions for prudent investing and to protect crypto investments,” Gupta said.
The right mindset is to familiarize yourself with the topic and take a long-term approach.
Stick to large cap crypto tokens
The approach should be to stick to large cap tokens and create an ecosystem that is aware of the risks involved. Investors should not look at crypto from a get-rich-quick perspective, Gupta told CNBC-TV18.
Disclaimer: The views and investment advice of the investment professionals on CNBCTV18.com are their own and not those of the site or its management. CNBCTV18.com advises users to consult with certified professionals before making any investment decisions.
(Edited by: Aditi Gautam)
Initial publication: December 29, 2021 at 8:35 AMIST
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