Cryptocurrency presents unique risks and complexities for newcomers. If a friend is eager to get started trading crypto, you’re in a great position to provide measured guidance, steering them toward responsible participation. By sharing your experience, education, and resources, you can help set them up to trade crypto safely and avoid costly mistakes.
Suggest Reputable National Exchanges
Recommend your friend open accounts only at established, regulated national exchanges like Coinbase, Kraken and Gemini to start. These mainstream platforms are less likely to disappear overnight or conduct shady activities that could wipe out new users’ funds. Avoid offshore, unregulated exchanges where anything goes.
Caution Against Investing More Than They Can Afford
Temptations arise to allocate substantial funds to chase crypto profits. Crypto remains highly speculative, and dropping life savings into Dogecoin on a lark can be financially disastrous. Curb overeager tendencies gently by reminding your friend not to invest more than they can afford to lose entirely.
Explain Multi-Factor Authentication
Enable your friend to understand why using two-factor authentication (requiring an extra login step like biometrics or SMS code) is critical for crypto account security. Hackers routinely target exchange accounts protected only by a password. Walk them through setting up 2FA across their various accounts for protection.
Explain How Important It Is To Keep Up To Date With The News
Trading any asset successfully requires understanding factors impacting markets. Explain how following crypto news daily arms your friend with information to make educated investment decisions and react prudently to developments. Recommend trusted industry publications, as ignorance can lead to costly missteps. You might have to keep following a few different websites to get the latest Bitcoin news and analysis, and help you and your friend to put your best feet forward into the crypto market and steer clear of classic mistakes.
Encourage Writing Down Recovery Phrases
When wallet providers generate recovery phrase seeds, ensure your friend writes these down rather than just storing them digitally.
Explain that lost phrase seeds mean permanently losing account access and holdings. Emphasize recording seeds securely as a contingency, allowing restoration of lost accounts.
Suggest Hardware Wallets For Significant Holdings
For long-term holdings, explain the security benefits of offline hardware wallets whose keys only the owner controls. Walk through transferring coins from exchanges to raise comfort with self-custody models. Less tech-savvy users may still prefer keeping holdings on reputable exchanges.
Caution Against FOMO
Inexperienced traders easily get sucked into fear of missing out on hype-driven rallies. But assets skyrocketing by hundreds of per cent overnight almost always crash even faster. Counsel your friend to avoid manias around shaky coins and meme tokens without true viability. Urge focusing on established, reputable projects with lasting utility.
Provide Resources To Continue Learning
The crypto landscape shifts constantly. Staying current never stops. Share resources like newsletters, forums, podcasts, and websites you’ve found valuable so your friends can keep educating themselves. Also, explain blockchain fundamentals if needed to provide context. Learning together bonds the journey.
Remind Them You’re There To Answer Questions
Let your friend know they shouldn’t hesitate to reach out if any doubts or issues ever arise on their crypto journey. Provide reassurance you’re available for advice to prevent mishaps or talk through uncertainties. Having a trusted ally for guidance avoids costly missteps. It’s always a good idea to think about what you wish someone had told you when you first started out.
With the right mix of education, security guidance, measured advice, and moral support, you can equip a crypto newcomer with knowledge, empowering them to trade responsibly. Our communities grow stronger when we look out for one another.
