How to Make the Right Cryptocurrency Investment Decisions

This is especially true if you are new to the crypto trading space or do not understand every aspect of how things work in Web3. Simply diving into investing in something you do not know about puts you at great risk. You stand a chance of losing all your funds or “getting burned,” as they would say in cryptocurrency.

If you are new to our blog, you can read about Crypto Bubbles to improve your knowledge of the decentralized ecosystem. That article explains in detail how certain individuals create false bull runs to entice people into increasing the value of a token. After this, the people creating the FUGAZI event will cash out and leave other investors stranded and having to sell at a loss. Users should also learn about the age limit to buy cryptocurrency according to their region.

Before continuing, it is vital to admit that decentralized finance involves risks, and there are no assurances of always making profits. However, a smart investor understands the need to anticipate, plan for, and mitigate risks as much as possible. This principle also applies to making a cryptocurrency investment. To reduce the risk of losing funds, this article will enlighten people on how to make the right investment decisions. First, let’s understand what it entails to profit from blockchain tokens.

What is a Cryptocurrency Investment?

This is any form of trade that involves buying a blockchain token from an exchange, either directly or indirectly. The reason for this definition is that there are several ways to invest in crypto. More so, the word “trade” is more accurate, as it implies that people are swapping their fiat currencies for digital assets.

For most people, investing in cryptocurrencies implies simply purchasing it to keep over the course of many years. While this seems somewhat true, it is not comprehensive. Individuals who use cryptocurrencies as a medium of exchange for products and services are also investors. These individuals equally swap the paper cash for virtual currencies.

Different Ways to Engage in Cryptocurrency Investment

To better understand why this article chose to define a cryptocurrency investment as it did above, we need to examine the different forms of crypto investments. Contrary to what people think, there are very diverse ways to capitalize on blockchain tokens.

The subheadings below cover every aspect:

Buying and HODLing

This is arguably the most common form through which people invest in blockchain tokens. For a better understanding, the term HODL is an acronym for “Hold On for Dear Life.” Meanwhile, it was not initially formed as an acronym. Instead, a crypto influencer made a typo, and the word stuck with individuals in Web3. Away from the lessons, let’s further explain the details of this kind of investment.

The most important feature of buying and hodling is that the investor owns the token for a very long period. This is often with the belief that the coin’s price will double or triple in the near future. While there are no defined periods, people who fall in this category often purchase and store their crypto for one year or more. Even in bear markets, such an individual will not sell off their portfolio. Furthermore, hodlers are typically not active traders who steadily monitor the charts.

Trading

Unlike buying and hodling, trading is more complex and features several options. Before talking about the different types, we need to define trading. Cryptocurrency trading in this context is the process of swapping fiat tokens, products, or services for blockchain coins. The process often involves a merchant and customers. There are also instances where people trade peer-to-peer. However, this is not considered a form of cryptocurrency investment.

Here are the different forms of crypto trading as it relates to investment:

• Spot Trading: This is the immediate exchange of one type of cryptocurrency for another. Examples include trading Bitcoin for Ethereum or USDT for Litecoin. The trader chooses how much he wants to spend or the quantity of crypto intends to purchase and submits a request. People also have the option of setting the price at which they want to pay. Once all the requirements are met, the system will process the transactions.
• ETF Trading: Cryptocurrencies are not listed on stock exchanges, at least not directly. However, people have the option of trading cryptocurrency exchange-traded funds on the stock market. Instead of directly purchasing cryptocurrencies, ETFs track their performance and replicate it in specific digital assets. It is like owning cryptocurrencies without actually having them in your blockchain wallet.
• Futures Trading: Certain ETFs use futures contracts to settle trades. So, what is futures trading? Futures trading is the process of predicting the price direction of a specific coin over the course of an extended period. If their prediction is correct, investors will earn a profit, and vice versa. Instead of actually buying the coin, the system allows people to “borrow” the particular crypto they want to sell.

Staking

Away from trading or token swaps, the next form of investment is staking. This is a form of buying and hodling that is bound by a contract. In this case, individuals purchase a token and enter into a contract with either the token provider or crypto exchange to lock the tokens with a smart contract for a given period of time. During the duration of the stake, the owner will earn rewards according to the arrangement.

Staked tokens contribute to the maintenance of blockchain networks, especially those that utilize the proof of stake protocol. Besides maintaining the blockchain, locking coins into a smart contract prevents people from selling off their holdings. In turn, it helps to stabilize the price of that crypto in the DeFi market.

Farming

Farming is a form of cryptocurrency investment whereby users lend out their coins to a protocol to earn rewards. The protocol either loans the funds to other individual or engage in different investments. Unlike staking, the risk in farming is higher yields and more significant risks. Furthermore, the rewards are typically the protocol’s tokens, not the cryptocurrency that was locked.

For example, an individual locks USDT on the Binance farming protocol. Instead of getting USDT rewards, they will earn BSC tokens as rewards.

Risks Associated With Making a Cryptocurrency Investment

The aim of every investment is to make a profit. In this regard, risks associated with crypto investments are threats that will stop people from making a profit. In certain cases, these dangers can result in a loss whereby the person involved loses the capital.

Without a doubt, there are several benefits to making a cryptocurrency investment. However, investors will only enjoy these gains if they make the right decisions. One way to increase the chances of making a profit is by avoiding or mitigating risks.

Below are some common risks associated with investing in crypto:

• Investing at the Peak: This is one of the major disadvantages of crypto investments. People hear about a specific token making waves and rush to invest. Unknown to them, they invested at the peak price, and the token is on a downward trajectory. Such persons either have to sell at a loss or hold the coin with the belief that it will recover.
• Crypto Bubbles; This works similarly to investing at the peak. The major difference is that this “peak” is not natural. Instead of the market dictating the charts, specific individuals push up the value of the coin. These persons have an agreed time or amount they want the cryptocurrency to rise to before they withdraw their holdings and get a profit. The unsuspecting victim is not aware of the plot and may not quickly withdraw their portfolio at the right time. This can result in either selling at a loss or holding on to a coin that has significantly lost its value.
• Scam Projects: Unlike the other dangers above, the risk of scam projects is far more devastating. As the name states, criminal individuals launch a coin and invite people to invest their funds. After getting adequate traction, they conduct a rug pull. For those who do not understand, a rug is where the project developers disappear after raising funds from investors.

Cryptocurrency Investment – Making The Right Choices

The best way to make the right choice with cryptocurrency investment is by conducting adequate research. Getting comprehensive information greatly reduces exposure to the risk factors mentioned above. Proper knowledge of blockchain projects will help people identify companies with prospects and those that are just about the hype.

Let’s use buying at the peak for example. This will not be a problem if people buy tokens from recognized projects. The market works in cycles, and there is a decent chance the coin will regain its price when the charts go green. If the project is based on just hype, it may not even survive a bear market. Even when bull runs emerge, the value would have fallen way too low for it to recover.

Besides learning the project in-depth, people also need to learn to read the market charts. The best thing anyone new to DeFi trading can do for themselves is to understand the Bitcoin Funding Rate and its implications. In addition, they should also learn how to read charts or “candlesticks” as they are often called.

Understanding the charts helps people ascertain when the project is at its peak, and its value will only drop in the next cycle.  This will help people to buy at a lower price and rise with the charts to a higher amount that they can easily sell off for a significant profit. On the other hand, buying at the peak price means people do not have to ride the wave of a bear market. In addition, the profit margin in this case will be bigger.

Is Tectum Emission Token $TET a Good Cryptocurrency Investment?

The best way to judge if $TET is a good cryptocurrency investment is by examining the project itself. By the way, $TET is the acronym for Tectum Emission Token. This token powers Tectum’s native network (T12), which is also the fastest blockchain in the world. Meanwhile, there is more to this project than just a blockchain and cryptocurrency. Tectum has a product known as SoftNote that implies how people make a Bitcoin payment.

With SoftNote, individuals can transfer BTC instantly and pay zero gas fees. Even better, SoftNote Bills enable people to their friends and family members who do not have blockchain wallets. Every transaction conducted on the T12 protocol is private and not even Tectum has information about the sender or receiver. The block explorer will only showcase details of the transaction itself and nothing more.

Tectum has already onboarded several merchants who are using SoftNote Bills as a form of payment. Despite the achievements, the team is already expanding the ecosystem to make transactions even more efficient. We are developing the SoftNote Cash project that will

So far, we have shown that Tectum is an excellent ecosystem with various products. However, how does this impact the value of $TET? First, merchants pay 1% on the transfers they receive and the medium of payment is $TET. Furthermore, people need to own $TET before they can mint SoftNote Bills. In this regard, merchants have to purchase and own Tectum Tokens.

Tectum will be launching public nodes where administrators will approve transactions taking place on the blockchain. Only those who own a significant amount of Tectum Emission Tokens can take ownership of nodes. As they approve transactions, they will also earn rewards in $TET.

Considering the number of applications, it is evident that $TET is a good cryptocurrency investment. More stakeholders means that more people are holding the token. As more people buy and hold the crypto, its value steadily increases.

What are you waiting for? Visit any of the following cryptocurrency exchanges to purchase $TET. Do not miss out on this life-changing opportunity.