👾3 major mistakes to select a cryptocurrency coins?👾
1.Buying Based on Hype or FOMO (Fear of Missing Out)
Many newcomers chase trending coins pumped on social media, influencers, or news often buying at peak prices during rallies. This leads to purchasing high and suffering losses when the hype fades.
Why it's a mistake: Price spikes are frequently driven by speculation rather than fundamentals, resulting in "buy high, sell low." Sources like Investopedia and CryptoVantage highlight this as a top error, with historical examples like 2021 meme coin booms.
How to avoid: Do your own research (DYOR) on the project's technology, team, and roadmap before investing—ignore short-term buzz.
2.Insufficient Research or Picking Without Understanding Fundamentals
Investors often select coins based on low price (thinking "cheap" means undervalued) or vague promises, without evaluating the whitepaper, tokenomics, supply dynamics, real-world utility, or team credibility.
Why it's a mistake: Many coins lack real value, have inflated supplies, or are outright scams/rug pulls. Low unit price doesn't indicate value (market cap matters more), and unvetted projects often fail. Multiple analyses rank lack of research as the #1 pitfall.
How to avoid: Assess circulating/future supply, use cases, community, and audits. Start with established coins like Bitcoin or Ethereum for lower risk.
3.Lack of Diversification (Putting Everything into One Coin)
Beginners frequently go "all-in" on a single coin, especially altcoins or meme tokens, believing it's the "next big thing."
Why it's a mistake: Crypto is extremely volatile; one project failing (due to hacks, regulatory issues, or loss of interest) can wipe out your investment. Even strong coins correlate during market crashes. Guides from CoinShares and Prestmit emphasize diversification to mitigate risk.
How to avoid: Spread investments across different sectors.
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