Monday, January 30, 2023
  • Most dos and don’ts in crypto hinge on how crypto literate you are. Most African crypto enthusiasts jump into the crypto ocean after reading several articles and following trends
  • Crypto is not a ‘ get rich quick scheme. It requires actual diligence and plenty of research to become crypto literate
  • Another crypto investment mistake that Africans make in cryptocurrency is focusing on headlining crypto coins

There are a lot myths and stereotypes surrounding cryptocurrency, especially in Africa. Despite many attempts by crypto organizations to educate and demystify these claims, plenty of Africans are still sceptical about the venture.

Those who dare take the first step are often misled by false information their peers provide. A crypto investment mistake occurs more not only to newbies but also to veteran crypto traders. Knowing the dos and don’ts of crypto are the first step to learning cryptocurrency and becoming crypto literate, but as the world has progressed, these steps have been made easier.

 Most African mentalities believe that successful crypto traders are considered ‘lucky’ and have had a smooth journey to fame and fortune. This is far from true; such individuals had to strive harder than anyone to become crypto literate. 

We’ll look at a different angle, leaving behind the ordinary and common mistakes that most crypto traders make. Cryptocurrency is like any other venture that requires effort, an innovative mind and hard work. Below are some of the more overlooked mistakes most crypto traders make, especially in Africa.

dos and don't in crypto

Crypto trading mistakes made by new African traders are affecting its adoption rate.[Photo/Cointelegraph]

Believing only one side of the coin

In Africa today, the primary form of crypto awareness is through practicality and seeing a peer become a successful crypto trader. This instantly energizes African minds into thinking that we can, too, just because they made it. Most people don’t realize this thinking is major crypto investing mistake.

Believing in the capability of crypto is a motivating factor that even big league cryptocurrencies strive to acquire. When a newbie believes that the same method used by a peer will work the same for them, it negatively impacts this process.

This one-sided viewpoint significantly increases the number of crypto traders. Unfortunately, it’s short-lived as it results in bitter crypto scammers trying to regain what they lost. South Africa has suffered from this viewpoint and harbours multiple young crypto-literate scammers who continue to spread this wrong notion.

The core factor of being a successful crypto trader is adaptability. Being able to approach a new concept differently broadens your mindset allowing you to float seamlessly in the sea of volatility.

Shallow Research

Most dos and don’ts in crypto hinge on how crypto literate you are. Most African crypto enthusiasts jump into the crypto ocean after reading several articles and following several trends. This often works for the first few months but becomes a steady slope. Learning cryptocurrency is a constant process that even veteran crypto traders who have been in the industry for years acknowledge. Most crypto scammers often gamble on the amount of knowledge a crypto trader has. The little they know, the better for them.

Most individuals often think that learning cryptocurrency only involves knowing which crypto is trending or which crypto coin is created by the big league. This is but a sliver of the full scope. An in-depth understanding of a particular crypto coin greatly helps predict its credibility. Some critical figureheads in the cryptocurrency have encouraged crypto miners to always go through a coin’s whitepaper before further research. 

Lack of proper research is a sure way of making a crypto investment mistake.

A crucial demerit contributing to the slow crypto adoption in Africa is the lack of crypto information. This inevitably leads to most crypto traders relying on just a few articles from a quick google search that gives them a sense of ‘crypto literacy’.

Traders are investing too much money in crypto

Crypto is not a ‘ get rich quick scheme. It required actual diligence and plenty of research to become crypto literate merely. Most crypto scammers have targeted African youths with the promise of instant rewards. This blinds them, making the most significant crypto investment mistake in their lives by investing a large sum of money.

Crypto volatility is no myth; credible crypto exchanges have fallen due to it. A fact is that any slight change in Bitcoin price will affect the overall crypto ecosystem. 

A crypto trader should invest in an amount they are willing to lose. This should merely act as a learning curve to give practical experience in cryptocurrency. Currently, there are multiple cryptocurrencies, some originating from Africa itself. Knowing where to invest depends on the research conducted and the individual’s risk tolerance. 

Its opposite effect is also worth mentioning; most crypto prices today might be out of reach for some African countries. There is generally no need to invest a small amount in a crypto coin that requires a stable source of income. There are plenty of legitimate African cryptocurrencies that show promise.

These crypto coins cater for ordinary African citizens, and investing early generally results in higher yields. Grasping the dos and don’ts in crypto takes time, and the venture is still growing, so there are plenty of opportunities.

Focusing on unreachable diamonds

Another crypto investment mistake that Africans make in cryptocurrency is focusing on headling crypto coins. It is true that Bitcoin, Ethereum and Binance are the safest bet a new crypto trader can make. However, other altcoins have shown promise and are much more easily accessible. Solana and Polygon are upcoming crypto coins quickly rising among the crypto ranks and are now generating significant profit.

Successful crypto traders are not only crypto literate but also have a diverse portfolio. 

Numerous crypto exchange platforms have assisted multiple African startups in launching their crypto coin. Coins such as Sango Coin and SAFCOIN are a few of the various crypto coins designed by Africa for Africa. Investing in alternative crypto coins can ease the steps of new crypto enthusiasts.

Wrapping Up

Cryptocurrency in Africa is a rising factor that has attracted many investors and developers. African crypto miners and traders are consistently trying to profit from cryptocurrency but have unfortunately fallen prey to the loopholes. To become a successful crypto trader, one must be diverse and adaptive. These factors, merged with the consistent learning of cryptocurrency, are a guaranteed recipe for success.

Also Read, the University of Namibia offers an MSc in blockchain technology.

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