Investing in cryptocurrencies is often seen as a thrilling venture—one that offers potentially high rewards but comes with inherent risks. For new investors, navigating this fast-paced and often volatile market can be overwhelming. Mistakes made early on can have lasting consequences, turning what could be a promising investment into a frustrating experience. Fortunately, many of these errors can be avoided with the right approach.
Here are five of the most frequent mistakes that new cryptocurrency investors make, and how 91 is uniquely positioned to help you avoid them and manage your investment journey smoothly.
1. Falling for FOMO (Fear of Missing Out)
One of the most dangerous traps new investors fall into is FOMO—the Fear of Missing Out. When prices of cryptocurrencies skyrocket, it’s tempting to dive in immediately, driven by the fear that you’re going to miss the opportunity of a lifetime. This emotional reaction can lead to poor decision-making, as investors often buy at the peak of a bull run, just before the market corrects itself.
Why FOMO is risky:
When you invest based on FOMO, you are reacting to short-term market movements rather than long-term value. Many investors who jump in during these periods find themselves holding assets that have quickly dropped in value, leaving them with significant losses.
How to avoid it:
At 91, we emphasize thoughtful, long-term management over impulsive, emotional reactions to market trends. Our professional traders use market analysis and data-driven strategies to make decisions that are aligned with the bigger picture, rather than just reacting to the noise of market volatility. When you invest through 91’s NFT-based model, you're not managing your portfolio alone. Our experts monitor market trends and take a measured approach to ensure that decisions are made based on solid analysis, not FOMO.
Practical example:
Consider the 2017 Bitcoin bull run. Investors flooded into the market as prices surged, only to see their investments plummet when the bubble burst. Those who invested wisely and based on sound analysis—rather than FOMO—were better positioned to ride out the volatility and benefit from the long-term growth of the asset.
2. Neglecting Research
The cryptocurrency world is vast and complex, with thousands of coins and tokens, each with its own unique use case, technology, and community. For many beginners, the excitement of investing can overshadow the need to conduct thorough research into the assets they’re buying. Failing to do due diligence is one of the most common—and most costly—mistakes a new investor can make.
Why neglecting research is risky:
Without understanding the fundamentals behind a cryptocurrency—such as its team, its purpose, and its technology—you're essentially gambling rather than investing. A project might sound promising based on hype, but without solid research, you could end up investing in a coin with no real value or long-term potential.
How to avoid it:
At 91, we take the guesswork out of research. Our professional traders conduct in-depth analyses of the market, evaluating each cryptocurrency based on its fundamentals, market potential, and risk profile. We don’t just invest in anything—we rigorously assess each asset before including it in our portfolios. When you invest through 91’s NFTs, you are entrusting your funds to experienced professionals who have already done the hard work for you.
Practical example:
Think of the rise and fall of countless altcoins over the years. Coins like BitConnect, once hyped as the next big thing, turned out to be unsustainable, leaving many investors with substantial losses. At 91, we ensure that the assets we invest in are carefully vetted, helping you avoid falling into traps laid by unsound projects.
3. Lack of Diversification
Diversification is a fundamental principle of investment management, and it’s just as important in cryptocurrency as in any other asset class. However, many new investors make the mistake of putting all their capital into a single cryptocurrency, hoping for big returns from one asset. This is risky, as the cryptocurrency market is notoriously volatile, and even the most promising assets can experience sharp declines.
Why lack of diversification is risky:
When you invest in just one or two cryptocurrencies, you expose yourself to the full volatility of those assets. If your chosen cryptocurrency experiences a significant drop, your entire portfolio suffers. A well-diversified portfolio, on the other hand, spreads risk across different assets, minimizing the impact of any single market event.
How to avoid it:
At 91, diversification is at the core of our strategy. Our portfolios consist of multiple carefully selected cryptocurrencies, including both established assets like Bitcoin and Ethereum, as well as emerging projects with significant growth potential. By investing through a 91 NFT, you automatically benefit from a diversified portfolio that balances risk and reward. This approach minimizes exposure to volatility while maximizing your potential for returns.
Practical example:
Consider a portfolio in 2021 composed solely of Dogecoin during its rapid rise. Investors who failed to diversify were hit hard when the price corrected by over 60%. A more balanced portfolio with a mix of assets would have mitigated this loss, providing stability from more established assets.
4. Inadequate Security
The cryptocurrency space, while innovative, is also a target for hackers and scammers. As a new investor, it’s crucial to prioritize the security of your accounts, wallets, and private keys. Unfortunately, many beginners overlook this aspect, leaving themselves vulnerable to theft or hacking.
Why inadequate security is risky:
Without proper security measures in place, such as strong passwords, two-factor authentication (2FA), and secure hardware wallets, your assets could be stolen in an instant. Many exchanges and wallets have been compromised over the years, resulting in millions of dollars in losses for investors who were not adequately protected.
How to avoid it:
At 91, security is our top priority. Our platform employs state-of-the-art encryption and security protocols to ensure that your assets are always protected. When you invest through 91, your portfolio is managed in a highly secure environment, with all necessary safeguards in place to prevent unauthorized access or hacking. This means you can invest with confidence, knowing that your funds are safe.
Practical example:
In 2018, the popular exchange Coincheck was hacked, resulting in the theft of over $500 million in cryptocurrencies. Many of the affected investors had kept their funds on the exchange without enabling advanced security features like two-factor authentication or using hardware wallets. At 91, we take these concerns seriously and provide a secure, managed solution.
5. Investing More Than You Can Afford to Lose
Cryptocurrencies are volatile by nature. While the potential for high returns exists, so does the risk of significant losses. One of the most important rules of investing—especially in crypto—is to never invest more than you can afford to lose. However, many new investors get swept up in the excitement and overextend themselves financially.
Why over-investing is risky:
Investing more than you can afford to lose can lead to financial stress, especially if the market takes a downturn. It’s essential to have a clear understanding of your risk tolerance and to ensure that your investments don’t negatively impact your financial stability.
How to avoid it:
At 91, we encourage a balanced and measured approach to investing. Our investment model allows you to diversify your funds across a range of assets and benefit from the expertise of professional traders, helping to mitigate risk. We always recommend that our users only invest funds they are comfortable losing, while aiming for long-term, sustainable growth.
Practical example:
During the 2018 crypto crash, many investors who had over-leveraged themselves found themselves in financial difficulty. A more measured, diversified approach, like the one offered by 91, helps protect against these kinds of market shocks.
Conclusion
Investing in cryptocurrencies can be an exciting and profitable venture, but it requires caution, strategy, and the avoidance of common mistakes. By steering clear of FOMO, conducting thorough research, diversifying your portfolio, prioritizing security, and only investing what you can afford to lose, you’ll be better positioned for long-term success in the cryptocurrency market.
At 91, we’ve built a platform designed to make cryptocurrency investing simpler, safer, and more accessible. Our NFT-based investment model provides a unique, strategic approach that eliminates the stress and complexity of managing a portfolio on your own. With professional management, strong security measures, and a focus on diversification, 91 is your partner in navigating the ever-evolving world of cryptocurrencies.
Ready to invest with confidence? Join us at 91 and take the next step toward a smarter, more secure financial future.
