Excessive Speculation in the Market Can Create Large Bubbles

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Being in the crypto community, you will be face certain risks while investing in the crypto space. So it is most important to keep yourself aware of the risks and protect your investments.

Excessive speculation in the market can create large bubbles and these bubble bursts can cause the prices go up and down rapidly which make is hard for the investors to earn money.

There are a few things that should be kept in mind in order to keep yourself away from falling into these bubbles.

First thing first, if you have convinced yourself investing in a particular project after doing your due diligence, don't overpay for it. Because you may be buying a crypto which is pricing high initially because of the hype thats being created around it but when time goes by, you may see the prices going down thus leaving you in losses either by selling it low or waiting for the prices to bounce back taking your time while your funds are stuck there. What that means that you may a chance using those funds for something else.

The rise in market volatility is also another factor to look into before investing because it shows the uncertainty in the market. In periods of reduced volatility, investors can look into collecting cryptos again. So it's good to take into consideration the market volatility before deciding of selling or buying a crypto.

Being an investor, you need to have some money set aside in case of any emergency. Being someone who is looking into crypto, I would suggest to invest the amount of money which you can afford to lose because this market is risky and you won't want yourself fully bankrupt in case of any price crash.

Long term strategy in investments could be fruitful. You may feel disappointed if you are thinking of the prices going up in a short term.

Hedging against risks by diversifying investments could also work. If you bear losses at one place their is a possibility that you may be going green at other place thus recovering your losses.

But the most valuable skill is handling your losses gracefully which I believe not many of us might have.

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