The biggest problem with investing in crypto is the fact that a lot of first-time investors have a completely wrong idea of what this is about. They’ve all seen people who bought BTC while it was still a handful of dollars per coin and sold for thousands or tens of thousands a piece. 

In the court of public opinion, these are the people who had a gut feeling that this (out of many similar ventures) had the potential to grow in value, so they chose to invest. This creates a false narrative that intuition, not research or strategy, determines success in the world of cryptocurrency.

This is, of course, not true today (if it ever was), and we’ll give you five compelling reasons why it’s this way. 

1. Things are changing rapidly

Cryptocurrencies are volatile, which means that the values change rapidly, and they’re sometimes hard to keep track of. 

At the same time, this is a field that’s just developing, which means that there are new cryptos out there on a regular basis. We’re talking about coins that are still not old enough to have a history worth analyzing. This means that these coins are sometimes requiring expert analysis in order to be sorted properly. If you can’t observe how they performed historically, the best you can do is to find an expert and see the prediction they make based on some other factors.

It’s also vital that you understand the importance of consistency in investment decision-making. It’s not like you’re waiting for these new cryptos to hit the market, and that’s it. There are new cryptos day in and day out. If you manage to identify sources that are consistently feeding you with reliable info, you’ve set yourself ahead of the rest of the market for the foreseeable future.

2. The technology is complex (and easy to underestimate)

Crypto technology is not impossible to understand on a basic level. Explaining what the De-Fi is, how the blockchain works, or what a single token is supposed to represent is so easy; however, if you decide to go a bit in-depth on the subject matter, it will be easy for you to get lost.

For instance, what makes one blockchain superior to another? Why does cryptography matter, and how are changes in this field affecting the market? Even seemingly unrelated issues like cloud innovation can make a massive difference in this field. This is especially the case when it comes to AI regulation, which, combined with ongoing crypto regulation, makes this field even more complex. 

Most importantly, in order to understand the world of cryptocurrency investment you need to have a dual specialization. You need to understand technology and the economics. A lot of people dedicate their entire lives to just one of these fields without ever truly mastering it. This is why there are so few true experts and why their words carry so much weight.

3. They really know more than you

The next thing you need to understand is that this is a field that’s governed by principles of the economic and technological world. While no one can know for sure what is going to happen on the market, the chances of these experts being right are far higher than you being right.

A lot of people just misinterpret the fact that there’s still a certain amount of chance when it comes to investing. The only reason why this happens is because no one ever has all the factors. This is also why insider trading is so illegal since it would give an incredibly big competitive advantage to the person using this knowledge.

This is not like if you were to place a bet on one of those anonymous casinos. There, the odds play no favorites, and you have the same chance to win the next bet as the most veteran user of the site to date. In crypto investing, the odds are not the same, and you need to listen to experts.

4. Risk management

Even the best experts don’t know which coin will go up and which will go down. Anyone who promises to do this is lying and trying to trick you. However, they do have their best bets, and they provide you with some sort of risk assessment.

If you’re smart and ready to learn, you can use this type of insight to develop your own investment strategy. You can split your investments across riskier and less risky assets. This is the core principle of risk management and a skill you have to master in order to stay safe. 

Let’s face it: in order to make real money, you’ll have to buy some riskier cryptos since being an early adopter is the best way to maximize potential profit. At the same time, you need cryptos with the highest odds of stability in the foreseeable future to even this out. 

The most important thing you need to understand here is the fact that your decision-making needs to be guided by data. Since you’re definitely not going to go through the volumes and volumes of data on your own, your best bet is to find the experts you can trust to do the research for you.

5. Future regulatory landscape

Cryptocurrencies are either barely regulated, freshly regulated, or still unregulated. The problem is telling the difference between different coins, coin purposes, and jurisdictions. This is something that you need experts for, not just generalist experts. You need specialists for specific areas or at least people familiar with local regulations.

At the moment, there’s still a lack of global or international regulation regarding crypto, which is a big problem considering that crypto is international by its very nature. It’s used for e-commerce remittances, and a huge portion of the remote workforce receives salaries through Bitcoin wallets.

You also need people who follow the political climate in these areas, seeing as how these people can make an educated guess about the future of regulation. Even in areas where cryptocurrencies are regulated, you can rest assured knowing that this is far from being the end of it.

This is one of the major bottlenecks of crypto investment. There are a lot of investors who want to invest in crypto, but they struggle with the idea of an impending regulation that could change everything. 

Since this is something that is yet to happen, and there is no such thing as a soothsayer, listening to the opinion of experts is the closest thing you can get to an accurate prediction. 

Listening to experts is never the wrong move

This is an intuitive piece of advice for any other industry, but crypto is an exception (and it shouldn’t be). Here, people believe that the knowledge gap is not that big and that the work of these experts comes down to guesswork anyhow. None of this is true. The sooner you accept this and actually start listening to what the experts have to say, the sooner you’ll start acting as a real investor.