Why you can start investing in crypto right now, explained by Haru Invest CEO Hugo Lee

The crypto markets can be as volatile as they are fast-paced, a duality that has been prominent in this market since its formation just over a decade ago. When it comes to investing in crypto, many people have become extremely wealthy while others have fallen short and lost large amounts of money.  

2022 was a rough year for both investors and crypto markets, which has made many people extra cautious. Caution, though, is a valuable approach when investing in unstable markets. Here are a few tips for cautious investors looking to invest in an asset class that’s been under the microscope. 

Tip #1: Think Long-term, Not Short-Term 

Investing in cryptocurrency can be difficult and takes some practice and guidance to learn the basics. One of the most common mistakes for beginners is excessive get-rich-quick thinking, the misguided opinion that massive profit will be made right off the bat. This approach causes investors to chase crowds, follow media hype, and invest in risky tokens based on a single previous standout performance – all of which are things you don’t want to be doing. 

For those still looking to gain big over a short period of time, it’s going to be very difficult. When investing in cryptocurrency, focusing on long-term returns could reduce the impact of crypto’s inherent volatile but often short-term price changes. Always remember that investing of any type — whether in traditional or crypto markets — runs the risk of big losses alongside the potential for big gains. The bigger the return potential, the bigger the risk. Never invest more in an asset than you have, or that you’re willing to lose. 

Tip #2: Seek Trusted Advice While Still Doing Your Own Due Diligence 

Thinking investing is a solo endeavor or not seeking help is another common mistake people make when getting started. In traditional finance, investors often hire a professional manager to handle their investments. Cryptocurrency is fast becoming a ubiquitous asset class with trillions in value, which has in turn driven an entire industry of professional advisors and managed investment platforms — like ours at Haru Invest — for investors to consult with to help make smart, informed decisions. 

If you’re brand new to crypto and perhaps hesitant, lean on an investment professional or advisor that you trust and can rely on for investment advice. Though it is becoming much more user-friendly, cryptocurrency investing can be complex and confusing; there are countless tokens, platforms and products to consider. But as the crypto industry continues its maturation, more and more resources (many free!) are available to investors of all stripes and experience levels. Finding a trusted resource can help make sense of it all, reduce stress and help you make the right investment decisions for you.  

While leaning on trusted friends and advisors, it’s also important to educate yourself on the myriad of trading strategies available to crypto investors through trading platforms to ensure a sound understanding of what trading platforms are doing with user funds and, importantly, what other counterparties user funds are exposed to. All of these approaches will increase your chance of making a successful investment decision. 

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Tip #3: Choose the Right Investment Platform 

The right investment platform can make all the difference. When selecting which to hand over your hard-earned cash to, it’s important to keep the following three things in mind. 

  1. The stability of the business model. Last year revealed the massive cracks in the centralized lending model when lending titans Voyager and Celsius both collapsed and filed for bankruptcy. At Haru Invest, our non-lending business model enables us to directly manage 100% of our own assets, and we do not lend any assets for earnings.
  2. Take into account the credibility of the company owning the investment platform. The catalyst for FTX’ downfall began with its native exchange token FTT. Creating a native token can lead to the accelerated growth of a platform. However, tokens that deviate from their promised token economy — such as an infinite amount of tokens in the market, failure of the token monitoring system, and the price drop of the token — can lead to the failure of the platform. 
  3. Lastly, a strong track record and surviving a difficult market situation. The word ‘volatility’ cannot fully describe what the crypto market has gone through over the last year. Track records can be one way to prove how the company has handled crisis management and their business compliance.   

Author: Hugo Lee