![png_20221206_044212_0000.png](https://i.imgur.com/1Ytt6bw.png)


Cryptocurrency has proved to be highly risky and volatile investments even though it does offer a lucrative returns. Imagine you have to witnessed downtrend of your investment portfolio for up to a year or more than that just like the one going on presently. 

Many investors wake up to realized that their investments portfolio dropped for example $80 to $10 overnight and this really shows how crypto market can be. Furthermore, many investors witnessed a total losses in their investments portfolio this year when the Luna crashed and this has really affect the investors financial health.


When you want to invest in crypto currencies, it is very important to acknowledge some of the principle to guide you from risk attached to investing in crypto as those principles are center around the logic of lessen risks since investing in crypto is very risky.

#  Below 👇 Are Some Of The Basis To Consider When Investing In Cryptocurrencies..

# Invest Only The Money You Can Afford To Lose

Sometimes crypto market can play a trick on you. When you realized that a certain coin could rise or reach ATH according to prediction. You may be enticed with the price and decide to invest all your savings in to it with the hope that you will earn a huge returns.

But the problem is that you could lose all your capital at once or go bankrupt in the process. But when you invest only the money that you can afford to lose then you won't have to go through financial instability if things don't actually goes your way.

#  Create Emergency Fund

Building financial basic or foundations is one of the most important thing to consider when investing in crypto. Having emergency funds saving set aside will help you to overcome or deal with other unforseen hurdles without taking any loans on going in to debt.

For instance, imagine your crypto investment portfolio is down, then how will you be able to manage the situations if you don't have emergency funds set aside. This is the reason why you have to focus on building your emergency funds when investing in crypto.

#  Do Your Own Research (DYOR)

Cryptocurrency is so risky and volatile, even doing your own research won't prevent that. But carrying out about a specific coin will help you to identify if you the coin really have a great potential and make a great returns.

Moreover, doing your own research before investing in crypto can actually prevent you from being scammed or become a victim of fraudster and this way, you can acquire more knowledge about crypto market activities.


#  Have long Term Mindset

Since investing in crypto currencies is highly volatile. Having a long-term investment mindset is the best way to beat crypto volatility. This will prevent you from making a wrong decisions especially during crypto market compared to short term investment mindset where you think of making wrong decisions to sell or you may even think to time the market and this can make you lose all your capital in the blink of an eye.

Instead look for a crypto which have the potential for growth and suit your strategy. History has proven that most of the investors who attain financial stability and make huge profits in cryptocurrency is those that hold on to their stocks for a long-term, patience and have a long-term mindset. Because the more you hold then the higher the returns.


#  Diversification

Diversification has been a test and trusted techniques favoured mostly by the crypto investors to minimize the risk associated with investing in crypto and to stabilize the level of risks and returns. The best thing to do is to diversify your investment portfolio in to different sectors. Instead of you focusing on investing only on just one coin, you can decide to invest in to different coin which are promising. This will help you to afford total losses of your investment portfolio at once since you're putting your eggs in different basket instead of just one.



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