If you are just entering the cryptocurrency world or considering an investment, you probably have many questions plaguing your mind. Is it too late to invest? Where should you put your money? How can you be successful in this new investment market?
In today’s digital world, you have no excuse of delving into cryptocurrency blindly and with little to no knowledge of the investment prospects. This article explains how crypto news helps you become a better crypto investor. From the most traded currencies to the smallest niches, here is how keeping up with the latest news can help you secure a profit.
1. Helps You Determine the Value of a Currency
As a new investor, you should be aware that not all coins are equal. There are currently thousands of cryptocurrencies available for investment in the crypto market, all with varying support and decentralization levels. Some of these currencies try to solve distinct issues, while others try to emulate the all-famous bitcoin.
Keeping up with crypto news can help you track any emerging cryptocurrencies and the value they offer you as an investor. You can get a deeper understanding of how, when, and why a currency was created and gauge the developer community’s size. Essentially, this information will tell you where to put your money.
2. Helps You Assess Risk
The cryptocurrency market presents a high-risk investment opportunity. With its highly volatile market, the value of a cryptocurrency can vary wildly from one minute to the next. In most cases, cryptocurrency trading is also unregulated and uninsured by FDIC, which means you as the investor bear all the risk.
It is for these reasons that keeping up with crypto news is the best weapon in your arsenal as a new investor. By following current updates from seasoned investors and financial analysts, you can identify which currencies are unstable and which risks are worth taking. If a currency has recorded negative progressions for an extended period, your news feed will mark out the red flags.
3. Keeps You Updated on Tax Consequences
The Internal Revenue Service (IRS) considers cryptocurrency property and, as such, marks it as liable to taxation. In fact, despite the numerous campaign efforts by the crypto industry, the IRS requires that all investors report all capital gains made in this market to the federal government. The implication is that all your gains –significant or not– will likely be subject to taxes.
In tracking crypto news, you can stay ahead of any market changes and the implications they could have on your tax obligations. If an investment is too risky for a given financial period, you can drop it, save you taxes, and pick it up at a more stable date.
4. Protects You from Scammers
As with any investment opportunity, the crypto market is crawling with scammers looking to cheat you out of your hard-earned money. In a recent incident, a group took to Twitter, impersonated Elon Musk’s account (Elon Musk had an appearance on Saturday Night Live), and defrauded unsuspecting investors of up to $100,000 in cryptocurrency. The scammers pulled this off by instructing investors to verify their addresses by sending small crypto amounts, after which they were to receive ten times the amount sent.
If such an investor were up to date with crypto news, they would have known that no currency was currently offering such a deal and would have saved their money.
5. Helps You Make Rational Decisions
If you are not new to the cryptocurrency market, you know that it is a high-pressure environment subject to social hype and peer pressure. A single tweet from a major player in the crypto game can send people scrambling to invest in or sell a particular currency with zero knowledge of the prospects. This is unfortunate because cryptocurrency is a long-term game, and selling based on short-term movements can wreck your investment.
A good grasp of the current happenings in the crypto world will give you real-time information on trends in the market, allowing you to make calm, rational decisions.
There is no doubt that cryptocurrency offers a wide array of exciting investments. However, financial experts and advisors insist that the most crucial first step for any potential investor is learning all the ropes. It is important that you understand the technology and possible risks and rewards associated with emerging currencies.
Now that you understand how crypto news helps you become a better crypto investor, you can dedicate a significant chunk of your time researching cryptocurrency before and even after investing. The result will be a more informed, relaxed, and insightful decision-making module.