Baby Doge Coin may have only launched at the start of June, but it was a near-instant hit. In the first 15 days, the price shot up by over 1,000%. While that was followed by a large drop, it has since set a new all-time high thanks to a tweet from Elon Musk.
With the possibility of big returns, many people are jumping on the bandwagon and buying Baby Doge Coin. This isn’t the most straightforward process, though, especially if you haven’t purchased smaller cryptocurrencies before. Here are the mistakes to avoid so everything goes smoothly.
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1. Not researching Baby Doge Coin first
First things first, buying Baby Doge Coin isn’t a decision you should rush. This is a new, extremely volatile cryptocurrency, and there’s a high probability of losing money on it.
If you’re interested in Baby Doge Coin because you saw something on Reddit, YouTube, or anywhere else about how it’s going to be huge, take time to review its website and whitepaper first. Do your research instead of taking someone else’s word that it’s going to make you a millionaire.
Baby Doge Coin has had success so far because of the hype behind it. That’s not a sustainable long-term strategy, which is one reason why many enthusiasts don’t look at it as a good cryptocurrency investment.
2. Picking the wrong crypto exchange
The major cryptocurrency apps and exchanges don’t list Baby Doge Coin. With so many cryptocurrencies out there, those exchanges are selective about which ones they offer. As a new, relatively small token, Baby Doge Coin hasn’t made the cut.
PancakeSwap is the most popular place to buy Baby Doge Coin right now. This is a decentralized exchange where users contribute the crypto that’s used for trading.
The trade process on PancakeSwap may be different than what you’re used to, but it’s not too complicated. On the PancakeSwap site, you need to connect a crypto wallet, and then go to the exchange page to make your trade.
3. Expecting to buy it with cash
PancakeSwap isn’t the type of exchange where you deposit cash and use it to buy crypto. It only lets you trade one cryptocurrency for another.
After you connect your crypto wallet to PancakeSwap and go to its exchange page, you can select which crypto you want to trade for Baby Doge Coin. Binance Coin (BNB) is a popular choice.
If you don’t have any crypto you want to trade, then you need to buy some on another exchange and transfer it to a crypto wallet first. Here’s a step-by-step guide to explain how this works:
- Buy one Binance Coin.
- Transfer your Binance Coin to a crypto wallet, such as Metamask or the Binance Chain Wallet.
- Visit the PancakeSwap exchange page and click “Connect.”
- Connect your wallet to PancakeSwap.
- Trade your Binance Coin for Baby Doge Coin.
4. Not setting the slippage tolerance to 12%
There’s one more important concept to know about when trading for crypto on PancakeSwap, and that’s slippage.
Slippage is a price change between when you submit a trade and when it’s executed. On PancakeSwap, you can set your slippage tolerance, or the price change you’re willing to accept to get your trade to go through. Here’s how to adjust this setting:
- Go to the PancakeSwap exchange page.
- Click the settings button (the icon in the exchange box that has three horizontal bars with lines through them).
- Choose one of the preset slippage tolerance options or type in your own.
With highly volatile cryptocurrencies like Baby Doge Coin, the trade might not work with a low slippage tolerance. The Baby Doge Coin team recommends setting slippage tolerance to 12%.
That means if you’re trading for 1 million Baby Doge Coin tokens, you’d potentially end up with anywhere from 880,000 to 1.12 million tokens.
5. Spending too much on it
Be cautious about the amount of money you put into Baby Doge Coin. There have been many cryptocurrencies like it that start strong, and then end up forgotten. They leave behind a lot of disappointed holders who buy near the peak, only to see their investments plummet in value.
Look at Baby Doge Coin like playing the lottery. If you really want to give it a shot, put a small amount of money in it with no expectation of making anything.
For building wealth, stick to retirement accounts and the stock market. And if you want to make crypto a part of your portfolio as a high-risk, high-reward investment, decide which crypto to buy based on what they can do and not their popularity.
View more information: https://www.fool.com/the-ascent/cryptocurrency/articles/the-5-biggest-mistakes-you-can-make-when-buying-baby-doge-coin/