It’s easy to get excited about investing into Litecoin; the markets are rallying, the value is surging, and it doesn’t seem like it’s going to stop or slow down. It isn’t like your typical markets, it’s extremely unpredictable, volatile, and has no solid reason to increase or decrease. It has bankers worried, techies excited, and family members questioning the legitimacy and purpose – it’s likely that Litecoin ISN’T going anywhere anytime soon regardless of it’s value. I want to cover some basics of Litecoin investing, this are not opinions, they are facts and can help you understand what you’re getting into.
The 3 Basic Rules
1) Do NOT invest more than you can afford to lose.
2) Maintain privacy of your Litecoin (or any crypto) investments.
3) Do NOT panic sell / buy
Do NOT invest more than you can afford to lose
This is extremely important. I’ve come across many articles and people who have said (claimed) to have invested outrageous amounts of their savings, belongings, and other things into Crypto. These markets do NOT guarantee any sort of dividends or profit. Today’s Litecoin valuation at a high of $372 could be the last time the coin is ever worth that much, it could easily drop below $200 or even $100. Instead of banking on this amazing and exciting ride to take make you rich, you should carefully consider investments at which you can afford to lose. Will you have enough for rent, food, and basic needs next month? If not, then you’re doing it wrong.
Maintain privacy of your Litecoin (or any crypto) investments
This may be obvious, but just as you don’t go around telling your neighbors and general public how much money you have, we need to treat your crypto investments the same way. Maybe not everyone in the world is a target for a theft (or worse), but it’s important you ensure you maintain some level of secrecy when discussing this.
Do NOT panic sell / buy
Say, Litecoin hits an all time high (often referred to as ATH) of $500 next week. Great! But there are two thoughts that go through a new investor’s mind:
- They feel they need to sell off their coins, the price surely can’t gain any more momentum.
- They feel they need to invest now, before the price becomes too high.
While both of these could be reasonable under a traditional market – the Litecoin market is very much unlike any market that exists. It’s extremely important to understand that an ATH means very little the majority of the time. Save for the mention in Forbes, or a prominent figure being interviewed by a major network, these highs could mean anything. So while you’re considering a panic buy or sell, it’s important to assess your own financial situation, just as with the ‘Do not invest more than you can afford to lose’ point.
Bonus: Day Trading
While this dwells into the opinion area, it’s hard to get behind the idea of day trading – waiting for the dip / spike in prices to buy or sell can be massively stressful. While most of us are glued to various exchange charts, distracted from our daily lives, you’d have to be extremely fluent in various trigger technologies and constantly monitoring the charts to ensure your profits are beneficial.
With that being said, to view Litecoin as a way to make a quick buck (CAD, AUD, Yen, or whatever) is detracting from what cryptocurrency is really all about.