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Cryptocurrencies are some of the hottest new investments you can make—and everyone is talking about them. Whether it's the newest Bitcoin mining rigs you're seeing, or the newest ways ICOs are slated to work, crypto seems to have something for everyone.
Despite it all, only six percent of the population really invests in cryptocurrencies at all. So, clearly, it's not something that everyone can and should participate in.
Should you be in the Bitcoin scene? Well, if you check off any of these signs you shouldn't invest in crypto, you might need to rethink it.
You're terrible with tech.
I'm not saying that you absolutely need to be a tech guru to invest in Bitcoin, but I am going to say it helps. Cryptocurrencies are a form of technology, and they're fairly complex. Investing does require some technical knowledge—as does hack-proofing your wallet.
If you don't know much about technology, you shouldn't invest in crypto.
There's not much in the crypto world that you're really interested in, aside from the money aspect.
Though this may seem like a good thing, the fact is that you shouldn't invest in crypto if you are the type of person who wants to just make more money.
Greed is good, sure, but the truth is that this form of investment isn't just about getting money. It's about supporting technology and supporting the upcoming roles it will have in society.
You have a tendency to panic sell.
If you thought that investing in cryptocurrencies wouldn't be stressful, think again. Cryptocurrencies are very, very volatile, and it's not unusual to see prices fluctuate by as much as 20 percent or more in a single day.
People who tend to panic and sell off their goods to cut losses need to be aware of this. If you're the type of person to sell low during normal fluctuations, crypto isn't for you.
People have been badgering you into investing, and you're really not feeling it.
Investing is a very private matter. That means that you should be the one who makes the decision to pay money for an investment. You should always be concerned if a person seems overly invested in making you invest.
If you feel like you're being pressured into it by people who don't have your best interests in mind, it may be time to take a step back. You can do better than that!
You’re a value investor.
Are you the type of person to try to invest like Warren Buffett? Do you consider yourself a value investor? If so, then you shouldn’t invest in crypto. The problem with cryptocurrency is that you don’t really have a set value aside from the value that people ascribe to it—and that means that you can’t really use classic value investing techniques with it.
Most value investors, including Buffett himself, have called cryptocurrency a toxic investment. In fact, Warren Buffett hates Bitcoin. Or, if you want a direct quote from Buffett, it’s “rat poison squared!”
You don’t have the time nor the patience to do due diligence.
When you’re investing in high risk items like crypto, you really can’t skimp when it comes to due diligence. Cryptocurrencies are some of the most dangerous investments you can make, and that includes ICO sales. Around 80 percent of all ICOs are scams, so if you don’t want to lose money, you’ll need to be careful where you invest.
If you can’t really do much in terms of due diligence, it’s a smart idea to avoid crypto altogether. Why not stick to one of the best S&P 500 funds instead?
The idea of losing all your money is a hard no.
Crypto isn’t like other forms of investing. With other forms of investing, you have backing from governments which prevent investors from losing every little cent they put in. Or, at the very least, there’s a far less likely chance of it happening due to all the regulations that are put in place.
Crypto is unregulated, for the most part. This means that you can do everything right and still lose everything you have. People can and already have lost everything in crypto. If you are scared of having the bottom drop out at any given point, you shouldn’t invest in crypto.
You tend to be fad-oriented in investing.
Yes, Bitcoin and other cryptocurrencies are known for being fads. Yes, there’s a lot of buzz and talk about these currencies and how they can improve in value. However, if you invest based on trends and “cool factors,” then you really need to re-evaluate how you’re choosing to invest your cash.
Come on, man. Stop viewing Bitcoin as a fad. Fads don’t pay off in the long run, and if you’re putting Bitcoin in that bag, it says volumes about how you do business. Chances are, you should wait until you fully understand Bitcoin’s value before you decide to go all in.
The majority of your investing portfolio is high-risk.
Though you might think that having a wholly high-risk portfolio will lead to massive amounts of riches, the truth isn’t quite as rosy. In most cases, having a portfolio that’s jam-packed with risky items will do little more than cause you to incur massive losses.
Remember, there have been people who lost their life savings to crypto. If your portfolio is already packed with risk, you really shouldn’t push the envelope by adding even more to the mix.
You don’t understand what’s going on.
What’s an ICO? What’s a DAICO? What exactly do tokens do, anyway? If you don’t know what any of these terms mean, you shouldn’t invest in crypto anytime soon. Education is key with this kind of investment, and if you aren’t educated on it, you shouldn’t spend money on it.