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It's been a crazy couple of days with Bitcoin going in directions we don't want while dragging the rest of the market with it. Many investors have been playing safe, while the newbies are standing on the fence wondering what should be done. Cryptocurrencies are not as complicated as many assume, but only require specific knowledge, skill set and discipline when it comes to investing. So just how much should you invest into cryptocurrencies.
First, not all your saving. Most personal finance experts suggest you live by the 50-30-20 rule in which 50 percent of your income goes towards necessities, 30 percent towards discretionary spending and 20 percent towards savings. In this case, one can invest a percentage of that 20 percent into crypto, as this keeps you on the smart and safe side. Preventing one from throwing money recklessly into cryptocurrency, especially as a newbie. As a newbie or even an experienced investor it is not safe to throw all your savings into cryptocurrency worst of all into one particular cryptocurrency. Whatever percentage you chose to invest should be properly spread in a diverse portfolio of non-high-risk investments.
Secondly, not all your income. Many investors make the mistake of pouring all their income into crypto investments because they are trying to make money soonest.
While you might be eager to make money rapid, crypto investments don't exactly work that way. No one controls the market, and there's no assurance that the market will move the way you want just because of how much you have invested. While you should be prepared to take risks, there are some risks that are unreasonable and pointless. It is still important that you abide to the 50-30-20 rule to stay safe and sharp.
Next, invest only an amount you are willing to lose. The crypto space is just as risky as other forms of investment, and even riskier. Most people stay off the crypto space because it is risky, and in fact even riskier compared to other forms of investment. The crypto space has no refund or compensation policies should you lose all your money in an investment or even to scammers. That is why it is better that you take more precautionary steps from your end to protect your interest. More like, you should be prepared for anything once you get into crypto.
Once you have decided on the amount you intend to invest and how you intend to spread them, make sure to watch the market closely. The market changes every day and so timing as well as the appropriate positions are important in making profit in the crypto space.