- Dogecoin investors warn against risky practices like leverage and derivatives.
- Emphasizes the importance of self-custody for secure crypto storage.
- Advises against putting all your eggs in one basket and trusting online promoters.
Prominent Dogecoin community member Mishaboar has cautioned cryptocurrency investors, particularly those new to DOGE or the broader crypto space. The seasoned investor outlined several key points that could help newcomers navigate the volatile digital asset market.
Mishaboar first advises novice traders to invest only if they can afford to lose. “That amount varies depending on your financial situation and propensity for risk. While Dogecoin is less risky than 6-month-old tokens shilled to you as a “cult,” it is still extremely volatile in a way that might be nerve-wracking for most newbies,” he stated.
The developer strongly urges new investors to avoid using leverage and derivatives, which can increase both gains and losses. These complex financial instruments are often misunderstood and can lead to significant financial losses. The investor emphasized that most retail investors do not require these tools and should stick to simple buying and holding strategies.
Leverage and derivatives are only for gamblers and insiders with enough liquidity to inject to keep their positions open. Finally, also stay away from programs (offered by exchanges or DeFi protocols) promising APY for holding your Doge there. You do NOT need that extra 3-8% per year. These programs involve a level of risk you cannot fully comprehend and may imply lending your Dogecoin to speculators who might use it in ways contrary to your interests.
Dogecoin Veteran Vouches For Self Custody
Next, Mishaboar highlighted another crucial aspect- Self-custody. He urged investors to move their cryptocurrencies to hardware wallets like Trezor or Ledger, which provide a higher security level than software wallets. While smartphone wallets like MyDoge are convenient for small amounts, they are not ideal for long-term storage.
The investor also warned against putting all your eggs in one basket. It’s essential to diversify one’s holdings across multiple exchanges and wallets to mitigate risks. Additionally, Mishaboar cautioned against blindly trusting online promoters and influencers, as many of them may have ulterior motives.
By following these guidelines, new Dogecoin investors can protect their investments and make informed decisions in the dynamic crypto market.
