Investing in Crypto: The Importance of Risk Management

When investing in cryptocurrency, it is essential to prioritize risk management by only allocating a small percentage of total net worth, ideally between 2% to 5%. This approach mitigates the emotional impact of potential losses, ensuring that investors do not suffer severe financial distress if values fluctuate. Avoiding the temptation to invest a significant portion, such as 50% of net worth, helps maintain a rational perspective during market highs and lows. Additionally, it is crucial not to borrow money for crypto investments, reinforcing the importance of investing only what one can afford to lose.