Dan Schatt and Domenic Carosa, founders of Earnity, offer a list of 10 things you should know before diving into the cryptocurrency world:
1. Cryptocurrencies have the potential to change the world of billions of people totally outside the banking channels (so-called unbanked) or who use banks that do not offer services in line with the modern economy (cd underbanked).
2. Buying, holding, and selling cryptocurrencies is not easy, but not that difficult either. It’s much easier to find out now what is bitcoin and other popular cryptocurrencies. If you are not a bit of a computer geek, forget about direct investment and consider whether to buy financial products linked to the crypto themselves.
3. Before investing directly in crypto, invest in a self-education course. It may cost you a little money and some time, but you will learn many valuable things for managing your investments as well as your IT security. Earnity, a company started by Dan Schatt, enables people to see through the hype and educate one another about crypto so that they can be informed and empowered.
4. Cryptocurrencies are highly volatile: don’t invest money you can’t part with and, above all, ask yourself if you are really willing to lose money.
5. Consider investing in crypto as part of your overall financial and investment planning strategy.
6. Don’t get caught up in the FOMO (fear of missing out) syndrome or “fear of missing the train,” which can lead you to make rash investments.
7. Greed, hope, and fear are the human emotions that move the world of finance. Do not be greedy and do not place unfounded hopes in the market’s future, so you will not feel panic if the markets collapse.
8. Much, if not most, of the information available on the internet about cryptocurrencies is biased (to put it mildly).
9. Before investing directly in the digital market, ask your accountant to explain how the profits and losses on cryptocurrencies (and ICOs) are taxed. Find out what documents you will need and how long it will take to prepare your unique model.
10. Earnity founders, Dan Schatt and Domenic Carosa, remind us that it is wise to be mindful of local reporting laws when deciding how to invest. Be sure that you know and follow any rules regarding earnings. These same rules will apply to digital portfolios, though they may differ slightly.