Cryptocurrencies: 7 golden rules of cryptocurrencies

By Flinston
11 Min Read


This new asset class is both intriguing and thrilling. Like the sirens in Homer’s Odyssey, cryptocurrencies both allure and terrify us. However, it is now stronger than you. You want to comprehend, study, and “tame the beast” better. Therefore I will provide you with seven golden principles to follow if you intend to invest in digital assets. That is if you want to purchase cryptocurrency.

1. Buy & keep

If you are interested in cryptocurrencies, you will often hear the phrase “buy and hold” in English. This implies that if you are interested in cryptocurrencies, you should invest in them for the long term and not like the unlucky majority of those who dream, fantasise, or expect to get wealthy soon. Decentralized banking, blockchain, and cryptocurrencies are still in their infancy.

Everything remains to be constructed, envisioned, deployed, and organised; thus, if you invest, you should plan to hold on to them for at least five years. Your investment might increase in value over the long run if the pattern persists, but in the short term, you will likely see both significant price increases and price decreases. In any event, the pitfall with cryptocurrencies is simply giving in to fear, allowing irrationality to take priority over practicality until you overreact and want to sell at the first “gust of wind.”

Again, if you are persuaded by this asset class, you should be fully persuaded and never forget that time is the most effective lever in investment.

2. Don’t trust, verify

Do not believe the first piece of information you read. Do not believe X or Y’s forecasts.

It is up to you to develop your own understanding, perspective, and analysis of this market. Naturally, you’ll feed it and help it develop with the facts you acquire here and there, but don’t put too much stock in anyone’s remarks. Remember to verify and contrast the information provided.

Once you’ve cross-checked the same information many times, you might convince yourself that it has more worth.

If you speak English, I cannot urge you enough to do your textual and video searches on your preferred search engine in English. Youtube is replete with both the greatest and worst examples of a topic, yet its material stays abundant. Sort, contrast, and expand your understanding of the topic.

3. Stay focused

Unless you’re a seasoned trader (and even if you are, you’re still a human), your response to a quick and severe decline in the price of your favourite cryptocurrency can surprise you… similar to the event we attended in May 2021.

After a lengthy and glorious rising period (during which everyone saw dollars reflected in their eyes), the crypto market had a series of precipitous declines: -30, -40, -50%, and sometimes even more.

As a result, many recently-returned little investors were (as usual) frightened and left with one hand in front and one hand behind, vowing to “never return”…

Ultimately, it is always the same. This sort of behaviour and inaccuracy has always been seen in the stock market, and thus, it also occurs in the cryptocurrency market.

This is a double whammy for these little carriers. Not only will they have lost money rapidly, but by swearing never to return, they will also miss out on the likely significant increase that will have occurred in the meantime.

Make sure you adhere to these seven golden tips to prevent these disappointments.

4. Diversify

Diversification is the golden rule that applies to all aspects of the management of one’s legacy and to all asset classes; the adage “don’t put all of your eggs in one basket.” Therefore, the same holds true for the cryptocurrency industry.

However, diversification is not restricted to just cryptocurrencies. Obviously, I advise you to invest in other digital assets and not “place everything on bitcoin or dogecoin,” for instance, but diversification also includes the solutions or platforms you’ve selected to conduct your operations.

If you want to invest more than a few euros, the duty of prudence requires you to divide your transactions and purchases among many platforms. They are termed “exchanges” in English. Coinhouse and Binance, for instance, are excellent options for making your first purchases.

5. Invest, don’t speculate

There are four primary types of purchasers on the market, and we discover the same types in the cryptocurrency universe:

The investor:

I highly advise you to fall into the first group. The investor invests with conviction, after having “done his homework,” that is, after being informed, after having researched and grasped the fundamentals of a sector before entering it, and above all, the investor will implement the very first golden rule outlined above: purchase and hold.

The Trader:

The trader type is obviously advised for persons with a great deal of free time (since you must carefully monitor the markets), but also and primarily for those with a solid grasp of finance. The trader spends the day in front of his screens, determining buy and resale tactics, establishing thresholds and ceilings, modifying the settings of his trading tool, and establishing goals that he adheres to. The trader often uses leveraged futures instruments. Clearly, I advise avoiding it if you lack extensive knowledge on the topic. Remember the legend of Icarus, who, out of arrogance, attempted to touch the sun before his wax wings melted and he plummeted to the ground like a pita pancake (in ancient Greece, there were no pancakes).

The player:

You may find them on online poker or sports betting sites, and they like playing scratch-offs and the lotto. These folks want immediate success. They are just interested in making fast cash by betting on chance, not in understanding or caring about the topic. Obviously, I do not advocate that you become one of them. Of course, you could get fortunate. However, the chances are not in your favour if you “play” on this ground.

The tourist:

He is often the last to arrive and the first to go. He is unaware of his being there. He saw the light (or rather, “one” told him that), and he followed without knowing, without inquiring, and without even understanding what was going on. Typically, he returns when the market is at its peak, catches the falling wave, and emerges weeping and complaining that “everything stinks”… In conclusion, the visitor embodies the core of human nature.

Also, he is the one who opens the first email he gets, which claims he can make 20% guaranteed in eight days by investing in Jerusalem artichokes on the

You find it humorous, yet it is a reality that occurs every day.

6. Optimize yields

Even if it means joining the arena of gladiators, you should use all available weapons and “go to the end of rationality.” We agree that you have committed to losing everything, and you are aware that you may lose everything, so you may as well exhaust the blockchain’s capabilities.

If you were unaware, you may invest and develop your cryptocurrency holdings in order to earn interest. However, I’m not referring to a 0.5% return. I’m speaking about 3, 5, 7, and even 20% annual returns.

As usual, it is not guaranteed; it relies on the market, the price of the cryptocurrency in issue, and its volatility, among other factors. nonetheless, it exists.

There are websites that specialise in high yield, but “earning” is the most well-known phrase, which is now available on most exchanges. This is referred to as “yield farming,” which may be translated as “high yield farms.”

Simply said, you move your cryptocurrency to the yield farming platform and leave your cryptocurrency on the platform in exchange for either interest in the cryptocurrency in question or, in certain circumstances, interest in the platform’s cryptocurrency.

7. Don’t spend your cryptocurrencies

El Salvador is the first nation in the world to accept and acknowledge bitcoin as a legal and official payment currency. Consequently, an increasing number of companies are beginning to accept cryptocurrency payments, and an increasing number of exchanges are creating their own payment card systems.

Consequently, why on earth would you choose to pay using bitcoin? Other than to “experience how it feels,” I do not see the purpose.

You may utilise your euros for costs on the one hand. I would like to remind you that the euro does not appreciate in value and that the generous yield of your livret A at 0.50% causes you to lose money each year due to monetary erosion. On the other hand, you have an asset whose value has multiplied by 10,000 in ten years and is likely to continue to increase.

Therefore, unless you want to experience the sensation, you should not spend your cryptocurrencies.

A pizza delivery service in the United States accepted Bitcoin payments precisely 10 years ago, according to anecdotal evidence. Johnny, a courageous Texan, was really pleased to have paid for his pizza using bitcoin. Today, with the same bitcoin, he could have purchased two million pizzas.