Do you know that the average daily trading volume in crypto is $120 billion? This is way higher than the average daily dollar volume for the US stock market, which stands at about $90 billion. The crypto global market capitalization reached $2.1 trillion on 29th December 2021, with Bitcoin accounting for 40%.

These are awakening statistics for any investor who would want to hop on the crypto bandwagon. Other trends show that 43% of Americans aged between 18 and 29 are already using a form of cryptocurrency to trade. However, it’s not always that rosy for first-timers. 90% of amateur investors lose up to 90% of their initial capital before they get it right.

So, how do you avoid such a regretful ending? Here are 7 top mindsets to steer you in crypto investment throughout 2022 and beyond.

1. Have a Plan

Having a plan as a crypto investor simply means understanding the coins you want to invest in, when to buy, and your intentions in the first place. For instance, you can be a day trader, spending most of your time behind a computer, or a swing trader looking at weekly opportunities. We also have long-term traders, driven by long periods in years or a HODLer banking on patience.

Look at a crypto investment like any other venture that requires a well-figured out plan for maximum gains.  Most importantly, stick to your plan, unless it proves not to be working after a while.

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2. Don’t FOMO: Fear of Missing Out

There is a misguided notion that cryptocurrencies will keep going up forever. It can be true to some extent but appreciating values don't happen overnight or miraculously. Moreover, whatever goes up eventually comes down.

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That said, don’t FOMO in fear of missing out on huge profits making buzz on the internet. Doing that is a mistake that profits an investor with a plan who doesn't FOMO. In other words, there is always the right time to buy a particular cryptocurrency. If your plan includes buying dips, wait for them. All the same, there is always an alternative trade amongst your options.

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3. Buy Low, Sell High

Avoiding FOMO takes us to the next mindset—buy low, sell high. But how do you buy low? Well, this is purely an aesthetic choice because market forces can be pretty unpredictable sometimes. For instance, you can buy at a price that you deem ‘low’ then the market dumps further. That said, you need technical and fundamental analysis to gauge the “highs” and “lows”.

Alternatively, you can leverage the dollar-cost averaging (DCA) investment strategy for more scientific analysis. DCA entails dividing the total amount for investment across staged purchases of a target asset.

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4. You Win Some and Lose Some

Investing in crypto is about speculative risks—you win sometimes and also lose sometimes. Unlike insurance, there is no indemnification if you make a loss. You just count the losses and aim to fill in that loss in your next win. Briefly, draw inspiration from occasional losses and focus on more promising assets. It’s all about net wins.

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5. Cash Out to Realize Your Profits

Crypto market values are dynamic and pretty volatile. The profits that you make from a few hundreds of dollars don’t count until you cash them out to your local currency or to stablecoins. Today your investment balance can show huge profits and display a negative value the following day. The fiat value of your crypto balance showing on the screen is just an imaginary value that can shoot or go down at any moment.

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6. Research, Research, and Research

As an unregulated industry, crypto is full of myths, myopic forecasts, and hearsay insights, even though some news and trends hold expert opinions. Don’t listen to what dubious developers say in a bid to promote their coins.

Instead, do extensive research on target assets to become a value investor. For instance, how innovative is a project’s tech? Who is the reputable team behind the project’s development? Researching these questions helps you determine whether the project has strong fundamentals as reflected in its coin price.

7. Diversify Your Portfolio

This is the most echoed mindset in the industry. You don’t put all your money in one asset, especially since you can’t gauge its volatility perfectly. Instead, you can diversify your portfolio by investing in multiple assets. For instance, an individual with investments spread across 10 coins will still be in a position to make potential profits even if two of these coins perform dismally.

Although everyone has a different opinion on this, it is a typical strategy to put a significant chunk of your investment in top cryptos, such as ETH and BTC, and spread the rest across risky and high potential coins.

Keep Up With the Industry

Leverage these mindsets to start your crypto investment journey smoothly. The catch is research. Always research deeply to stay updated with industry trends and practices because this sector is moving pretty fast.

Note: None of the contents above are financial advice