9 Common Mistakes To Avoid When Purchasing Bitcoins

While buying bitcoin might seem like a simple process for experienced investors, there are many potential mistakes to avoid when purchasing your coins. You’ll want to be sure you understand how to purchase and store your digital currency in the safest way possible. For those new to cryptocurrency, here are nine common mistakes people make when investing in bitcoin:

1. Not understanding the product

It’s essential you fully understand what it is that you’re buying before spending any money on it. There have been countless scams where individuals have been conned into investing money into something they don’t really understand. If this sounds confusing, consider reaching out to a financial adviser or expert who can help guide you through the process of choosing an exchange platform and wallet service that works best for you.

2. Using the wrong wallet

When buying bitcoin, you’ll need to set up a digital wallet where your coins can be stored securely while waiting for you to spend them at another time. Ensure the platform or service you choose offers suitable security features and is accessible from anywhere in the world – including via mobile apps – before parting with any of your hard-earned cash. Not understanding which services offer multi-factor authentication (MFA) and how it works could result in hackers getting access to your private keys without needing even having access to your phone number!

3. Don’t invest more than you can afford to lose

If you’re thinking about investing in bitcoin, there’s something else you need to remember. This is an extremely volatile market that everyone has heard of – even if they don’t fully understand it yet. It can be tempting to want to invest your entire life savings since the value does tend to go up over time, but keep in mind how this could impact your financial situation should the price drop at any point after purchasing bitcoin. You’ll want to make sure you have enough money set aside for emergencies, so losing all of those gains isn’t devastating later on!

4. Always research an exchange

You’ll also want to make sure you’re purchasing your bitcoin from a trusted source. There are many websites available that allow users to buy and sell coins, but not all exchanges have the same security measures in place for their customers. You should always thoroughly research the best bitcoin exchange platforms before deciding which one is right for you so you can ensure they offer sufficient protection against fraud and hacking attempts. This could be a great way to protect yourself as well as your investment!

5. Selling your bitcoins when the price drops

You might be tempted to sell your coins when the price of bitcoin dips. While this may seem like a smart strategy, you should keep in mind that selling too soon can often result in more money than you originally invested. If the price starts climbing again and later drops once more, then you’ve lost out on making even bigger profits!

6. Purchasing bitcoins without any knowledge of how to store them safely

If you don’t want your bitcoin investment to end up stolen, then it’s important that you learn more about the different ways in which people securely store their digital currency. You’ll need to ensure no one else will have access to your private keys before placing an order for coins with a particular exchange or broker. Some wallets come equipped with additional security features like two-factor authentication and multi-signatures, so make sure you take some time researching what makes each wallet unique!

7. Keeping all of your cryptocurrency on exchanges

While exchanges are great for buying and selling various cryptocurrencies, they aren’t the best when it comes to storing your coins. Exchanges can be hacked or subject to other issues that could prove extremely costly for investors who store their digital currency on these sites without any sort of protection in place. Make sure you keep most of your investment offline at all times, so you don’t risk losing everything if something happens with an exchange!

8. Storing large amounts of bitcoin

If you’re looking into investing several million dollars in cryptocurrency, then there’s no doubt that keeping everything in a single wallet is probably not the wisest idea since this will leave one very big target pinned right next to where you park your bitcoins each night before heading home from work. Instead, try to use multiple wallets so you can keep everything separated out. This will make it harder for thieves to steal your investment, especially if they are looking for a specific amount of bitcoin.

9. Buying from a scammer

As with any new market, there are those who look to take advantage of others through scams. One of the most common scams is selling bitcoins over-priced as a way to trick investors into purchasing coins that they will never receive. Be sure you research your seller and always use trusted payment methods when buying from anyone online so you don’t become a victim later on down the road.

Conclusion

If you’re new to cryptocurrency, it’s best to do a lot of research before investing in bitcoin. It may seem simple enough at first glance, but there are many potential pitfalls that need to be avoided if you want your investment to pay off later on down the road. You’ll also want to make sure you find trusted partners and resources, as this will help keep everything organized and running smoothly as your portfolio grows.