5 Things You Must Know Before Starting Crypto Investment
Many people start to become interested in crypto assets after seeing their high profit potential. Access is now much easier; just through an app, anyone can buy digital assets in minutes. However, this ease often leads many to enter without understanding the basic risks. Mistakes such as choosing the wrong platform, buying tokens without knowing their functions, or storing assets without adequate protection still often occur.
This article will discuss five important things to know before starting crypto investment in Indonesia!
Crypto Is Not a Shortcut to Wealth
Many beginners enter the crypto world with unrealistic expectations, such as hoping to gain significant profits in a short time just by buying one or two specific tokens. Narratives that often emerge on social media or community groups usually lead to instant success stories of tokens that increase drastically within days. In reality, most of these tokens are high-risk assets that do not have strong fundamentals. Sharp price spikes are often followed by corrections just as quickly.
In a week, prices can rise by 100% and then drop by 80% in a short time. Without a basic understanding and a solid strategy, beginner investors can easily get carried away by emotions and make impulsive decisions. This speculative approach rarely lasts long. On the contrary, a more stable strategy and asset selection based on fundamental analysis provide room for healthy portfolio growth.
Don't Enter Tokens Just Because They Are Viral
Another common mistake that often occurs after beginners become active in the market is buying tokens just because they are being talked about a lot. When a token experiences a price spike in a short time, appears on social media, or is heavily discussed by the community, many are immediately compelled to buy due to FOMO. However, not all price increases reflect the true value of the project. Many viral tokens move only because of momentary sentiment, not due to real technological advancements or adoption.
Behind price movements, there are often non-organic activities, such as coordination from large holders or bot manipulation, especially for tokens with small market caps that are not yet listed on exchanges. The problem is, when investors enter at the peak of euphoria, they tend to buy at the highest prices and then experience sharp declines. Without a clear exit plan, these positions are usually held too long in the hope that prices will rise again. Unfortunately, this is rare. Tokens that rely solely on viral exposure without strong use cases, healthy token distribution, or active development are not ideal choices for long-term investment. Asset selection should be based on quality, not momentary popularity.
Choosing the Right Exchange
A liquid exchange with large transaction volumes will facilitate the buying and selling process without significant price discrepancies. This is important when the market moves quickly. The higher the liquidity, the smaller the risk of orders being held up or prices deviating from expectations. Large exchanges like Binance are known to be among the most liquid in the market, with many asset choices and active trading pairs almost at all times.
In addition to liquidity, transparency should also be a concern. A good exchange typically is open about transaction fees, fund storage mechanisms, and provides additional security features such as two-factor authentication. Avoid exchanges with unclear origins, lacking complete information, or that frequently experience system outages. Quick access, smooth withdrawal processes, and responsive technical support also add value that can influence the overall trading experience.
Don't Just Keep Assets on Exchange
After buying crypto assets, many beginners think the matter is settled and leave them stored in exchanges. In fact, keeping assets too long on exchanges can pose its own risks. Exchanges are custodial, meaning users do not have direct control over the private key. If problems such as hacking, system disruptions, or withdrawal restrictions occur, assets can be stuck without certainty. In the crypto world, there is a well-known principle: not your keys, not your coin. Full control over assets can only be obtained if access to the private key is in the hands of the user, not a third party like an exchange.
For long-term storage, it is advisable to use non-custodial wallets such as hardware wallets. This way, full control over the assets is in the hands of the user. Also, ensure to securely record the seed phrase and not store it digitally. Additionally, enable additional security features such as two-factor authentication (2FA) on all platforms used. Security in crypto is not just about technology, but also about user habits in safeguarding access and important information.
Understand Crypto Asset Tax Reporting
In Indonesia, crypto assets are categorized as digital commodities, and their buying and selling activities are subject to tax. Since the implementation of PMK No. 68/PMK.03/2022, each spot transaction on official exchanges is subject to a final income tax of 0.1% and a VAT of 0.11%. This deduction is usually done automatically by the platform, but it does not mean that investors are free from reporting responsibilities.
For those holding positions for the long term or engaging in off-ramp activities (converting crypto to fiat in large amounts), reporting in the annual tax return is still necessary. Especially if the assets have generated realized profits. Ignorance about this can become a problem later on, especially when the tax tracking system becomes more integrated with exchange platforms.
Beyond that, there are still gray areas in the taxation of airdrops, staking rewards, NFTs, and transactions on DEX. Therefore, it is important for active investors engaging in various on-chain activities to start systematically recording their transactions.
Don't Forget to Do Your Own Research (DYOR)
Many people jump into crypto merely by following trends or believing information from social media without checking its accuracy first. In fact, investment decisions should be based on sufficient understanding. Personal research or DYOR is the most important step to avoid mistakenly entering unclear, problematic, or potentially scam projects. In the hype-filled crypto ecosystem, research becomes the main filter to distinguish what is worth it and what is just a temporary trend.
Conducting research does not mean you have to become a technical expert. Just start with basic things like reading the project's whitepaper, understanding what solution it offers, who the development team is, how the token allocation is, and whether there are real activities happening. Also, check if the community is active and organic, or filled with bot accounts. See if the project has been used in the crypto ecosystem or is still just a promise. With sufficient research, investors can make more rational and measured decisions, not just based on emotions or FOMO.
Conclusion
Crypto investment is indeed becoming more accessible and attracts attention due to its high profit potential. However, behind its ease, there are still many risks that are often overlooked, from choosing the wrong platform, getting swept away by viral tokens, to a lack of understanding of storage and taxes. Many newcomers enter simply by following the crowd, without research or a clear strategy. In fact, the crypto world requires a careful and considered approach. Understanding the basics, choosing assets and exchanges wisely, and maintaining security and tax compliance are essential steps to avoid missteps from the start.
Risk Disclaimer: Cryptocurrency prices are subject to high market risk and price volatility. You should only invest in products that you are familiar with and where you understand the associated risks. You should carefully consider your investment experience, financial situation, investment objectives, and risk tolerance and consult an independent financial adviser prior to making any investment. This material should not be construed as financial advice. Past performance is not a reliable indicator of future performance. The value of your investment can go down as well as up, and you may not get back the amount you invested. You are solely responsible for your investment decisions.
