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  Nigerians have embraced the crypto trade with great enthusiasm. They have made the country one of the world’s leading markets for digital currencies, in a matter of a few years. A survey conducted by Statista in 2020 indicates that about 32% of the Nigerians who took part traded cryptocurrencies.
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However, anecdotal evidence suggests that many people delve into the world of cryptos without learning the basics about it. As a result, they lose large sums to market volatility or outright scams. If you’re interested in trading Bitcoins or other altcoins, you’ll need to know how cryptos work, what the ecosystem around them is like, and the best ways to position yourself to gain from it. This article presents you with five tips you can follow to become a successful investor in cryptocurrencies.

Learn As Much As You Can

If you’re a beginner, you have a lot to learn. You’ll want to know what the major coins are, how to execute a trade, and which exchanges you should trade on. There’s plenty of information about these things on the web; not all of it is reliable. But there are a good number of reliable news sources and experts that cover cryptocurrencies. These are all available online. You may find the insights they share valuable. Here are some articles you can begin with:

Know How To Use A Crypto Wallet

Like fiat (e.g. your naira notes), cryptocurrencies can be stored in wallets, albeit a different kind of wallet. You can either keep them on an exchange or in a digital wallet (‘hot wallet’). There’s also the option of keeping them on a cold wallet, typically hardware that’s disconnected from the online space. The advantage of using a hot wallet is that it’s easily accessible. But this comes with a catch: hackers could break into it and steal your cryptos. Cold wallets, on the other hand, are much safer, as they aren’t online. But they require some technical knowledge to set up.
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Prepare For Ups And Downs

Cryptocurrencies are notoriously volatile—their values can swing wildly within a relatively short period. While this allows traders to scoop great gains in a matter of a few hours, this same feature makes them vulnerable to significant losses within the same time spans. If you’re going to invest in cryptocurrencies, you’ll need to prepare yourself for these ups and downs. Many inexperienced or impatient investors will pull out of their stakes when huge declines in crypto values occur. But this is often not the right move to make. You can learn more about this in our article, What To Do When Cryptocurrency Prices Dip.

Diversify Your Holdings

As a newbie trader or investor, you should begin with one digital currency. Learn what you can about what it is and how it works. Study its historical and current performance, and decide if it has a good chance of increasing in value in the long term. It’s advisable that you go for the older, better-known cryptos (e.g. Bitcoin and Ethereum) first. However, if you’ve learned the ropes with one crypto, it’s probably time to diversify your holdings. Adding more altcoins with values that aren’t strongly correlated could boost your overall earnings, and give you a bit of a buffer against declines in one cryptocurrency. Find out some of the better digital currencies you can add to your portfolio in our article, Top Cryptocurrencies You Can Invest In.

Protect Yourself Against Scams

Unfortunately, the crypto space is prone to scams of various sorts. Ill-intentioned actors often try to swindle people through false trades, or pitch scam coins to the unsuspecting public. These are things you should be wary of. Thankfully, there are ways to protect oneself from falling victim to these things. It’s safer to carry out trades on exchanges that have an escrow service and to conduct background checks before investing in a new coin (better still, stick to well-known cryptocurrencies). Learn more ways to overcome the risk of crypto-fraud here: How To Avoid Being Scammed When Trading Cryptocurrency.

Final Words

Numerous people across the world have made a fortune by investing in cryptocurrencies. You can too. But you’ll have to start somewhere. The tips we’ve shared here could help you kick things off. Featured Image Source: Investor Junkie
Got a suggestion? Contact us: editor@connectnigeria.com
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This article was first published on 7th October 2021

ikenna-nwachukwu

Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.

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