Cryptocurrencies are notorious for being extremely volatile. And where there is volatility, there is a high opportunity for profit or loss. If you invest based on what a celebrity tweets or what a self-proclaimed expert encourages you to do, you'll almost certainly lose money. So, here are ten basic principles to assist you realise what frequent mistakes you should avoid in order to be smarter with your money.

1. Don't follow "experts" blindly. Always do independent research.

Crypto "experts" can be found in every corner of the Internet. It may come as a surprise, but there are no true crypto experts. Cryptocurrencies are far too volatile for anyone to precisely estimate their value. As a result, conduct your own research.

2. Don't get into low liquidity cryptos. You could get stuck badly.

The ease with which a cryptocurrency can be bought and sold is known as liquidity. If a cryptocurrency has poor liquidity, you may find it difficult to sell it when the time comes. And instead of profiting from it, you'll be stuck with it.

3. Avoid trying to "time" the market.

Everything seems reasonable and obvious when you look back in time. You may come to regret not purchasing Bitcoin at $1,000 or selling it at its peak. This regret isn't going to help you. Do your study and, if you believe a cryptocurrency is undervalued, acquire it. Sell it if you believe it is overvalued.

4. Purchase the rumour and sell the truth.

In most financial markets, this idea works. Let's imagine a cryptocurrency project is set to release some game-changing new features. Purchase the cryptocurrency as soon as you learn about it. The price will continue to rise as more individuals become aware of the situation. When the feature's actual implementation is released, the price will drop dramatically! Why? Because the early adopters will sell and cash in on their gains. A word of caution: double-check that the rumour is true!

5. If you're not a pro, don't play with derivatives.

Derivatives are financial securities whose value is derived from an underlying asset, such as interest rates or cryptocurrency prices. Futures and options are two common types of derivatives used to mitigate risk and hedge against uncertainty. However, in the wrong hands, derivatives can lead to financial ruin. So don't toy with derivatives unless you're completely confident in your abilities.

6. Don't buy NFTs unless they give you some exclusive rights.

NFTs (Non-Fungible Tokens) are all the rage these days. Pixelated graphics have been said to be auctioned for millions of dollars. Don't be fooled by the hype. An NFT is useless unless it grants you exclusive rights.

7. Never short Bitcoin.

Shorting, also known as short-selling, is when you sell cryptocurrency that you don't own in the hopes that its value will plummet. Never bet against Bitcoin. Ashdraking is a phrase used in the crypto business to describe an investor who goes bankrupt through short-selling Bitcoin.

"Lord Ashdrake" was a Romanian Bitcoin trader who made a fortune by shorting the cryptocurrency. Then he sold it short at $300. In a matter of weeks, Bitcoin soared over $600, and Ashdrake went bankrupt.

8. Don't hold your cryptocurrencies on a cryptocurrency exchange.

In the crypto realm, there's a slogan that goes, "Not Your Keys, Not Your Coins." You don't have much control over your crypto if you keep it on a centralised exchange. You will lose all of your cryptocurrency if the exchange is hacked or its owners disappear! So keep your crypto in your own wallets, whether they're paper, hardware, or software.

9. Learn how to utilise both paper and HD wallets.

Do you lose your money if you remove your mobile banking app by accident? No. The app can easily be reinstalled. Because your funds are held by a bank, this is the case. Cryptography is a completely separate animal. You will lose all of your crypto if you delete your crypto wallet without first backing it up! So, learn how to use paper, hardware, and software crypto-wallets.

10. Before you start investing, read the Future Money Playbook.

Investing in cryptocurrency is not easy. You must initially understand a great deal of technical and financial information. The Future Money Playbook was created specifically for beginner investors. It's a free download, so read it before investing in cryptocurrency.