You should keep these 5 important tips in mind

The crypto bull run can be an exciting time. Prices are rising, interest is growing and the media is full of success stories. New projects are sprouting up like mushrooms and vying for the attention of the crypto community. But as tempting as it may be to put all your eggs in one basket, caution is advised. We would like to give you five essential tips without unnecessarily risking your hard-earned money.

1. Risk management

The be-all and end-all of every investment, especially in the volatile crypto market, is risk management. Only bet what you are willing to lose. For example, one rule could be not to invest more than 5-10 percent of your total assets in cryptocurrencies. Use stop-loss orders to limit losses and take profits to diversify your portfolio. Diversification is also very important within the crypto sector. Therefore, invest in different coins or tokens to spread the risk. The largest share should be distributed among already established assets such as Bitcoin and Ethereum.

2. Educate yourself

The crypto market is heavily driven by speculation and narrative and therefore it is important to stay informed. Investment decisions should be based on sound knowledge and not hype. Therefore, check sources of information carefully and do not allow yourself to be driven by the opinions of others. It is extremely important to check information sources for their seriousness and reliability. The following aspects can help:

• Do the people have recognized expertise and are they respected in the crypto community?
• Consider whether the source may have a particular bias or want to promote a particular outcome. Many sources in the crypto world have financial interests that could influence their reporting.
• Informative and balanced reporting is a good sign, while extremely one-sided perspectives call for caution.
• Good sources support their claims with data, facts and understandable arguments.
• Compare information from different sources. When multiple reliable sources provide similar information, it increases the likelihood that the information is reliable.

3. Avoid FOMO

The Fear of Missing Out (FOMO) can be devastating. It often leads to investors buying at peak prices and then watching prices fall shortly afterwards. Remember that a correction can follow at any time. Patience and discipline are your best friends here.

4. Maintain a long-term perspective

Often investors are blinded by short-term profits during a bull run. However, it is important to maintain a long-term perspective. Think about which projects or coins you really have confidence in and see the potential for long-term growth. This helps you react less emotionally to short-term fluctuations.

5. Keep track of your portfolio

With the increase in trades and investments, things can quickly become confusing. Use tools and platforms to manage your portfolio and keep track of it. This not only helps to understand your overall performance, but also to adjust your strategy and take tax aspects into account.

Bonus: Don’t forget the crypto tax

Taxes can be easy to overlook, but the tax implications of crypto trades cannot be underestimated. Find out about the tax regulations in your country and plan your trades accordingly. Taxes on crypto profits can be significant, so don’t forget to factor them into your overall calculation.

CoinTracking: Your portfolio manager

With CoinTracking you can calculate profits and losses and monitor your portfolio in real time. Another core feature is the automatic import of transactions from a variety of exchanges and wallets, which greatly simplifies the portfolio management process and saves time. CoinTracking also automates the creation of country-specific tax reports and thus helps users enormously to comply with tax obligations.

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