If done right, you can reap benefits from your cryptocurrency investment. Here’s how.
In 2009, Bitcoin, the first cryptocurrency, was just a fad that no one believed in. While the blockchain technology behind Bitcoin was impressing the tech community, it wasn’t drawing the interest of the common public as an investment option. Now after more than a decade, a lot of cryptocurrencies have entered the crypto market, and Bitcoin has emerged first in line with the highest value.
At the moment, investing in cryptocurrency is on every investor’s radar. People who bought cryptocurrency in 2017 before the price explosion are reaping the benefits of the investment decision of their lives. So, are you ready to start your investment journey with cryptocurrency?
How To Invest In Cryptocurrency?
1. Start Small
Like the stock market, the crypto market is extremely volatile which means prices will rise and fall unpredictably. It is only wise to invest in cryptocurrency after you make sure you have enough liquid funds for at least 6 months without any debts. Once you’re clear on this, start by investing in stocks (if you haven’t already) to understand your capacity to deal with risks. Once you know you can handle the ups and downs, set aside a small part of your money to invest in cryptocurrency. If possible, limit your investment to 5-10% of your income.
2. Select your Cryptocurrency
Yes, there is more than one cryptocurrency in the market right now with different price points. But it is advisable to not jump board and invest in 5 different small cryptocurrencies. A lot of homework is required to select the right crypto coin. Be aware of what is happening in the market, make a list of the 5 best performing cryptocurrencies and observe their growth chart. Right now Bitcoin is the largest cryptocurrency in the world, it’s also the most trusted one next to Ethereum, Ripple, Litecoin, and Binance Coin.
Here’s why this is the most important part of your investment journey. In the past decade, a lot of cryptocurrencies that entered the market either flatlined or disappeared without a trace. This means your $100 investment can turn into a big fat zero with just one hasty decision.
3. Pick the Right Cryptocurrency Exchange
Basically, it’s a place where you can buy, sell or hold your crypto assets. Analytics Insight has a detailed list of the best cryptocurrency exchanges with information about transaction fees, pros, and cons here. Like how banks and other financial institutions are designed to loan money, store money, and provide mortgages, these crypto exchanges are specifically designed to manage cryptocurrencies and their volatile nature.
4. Choose a Cryptocurrency Wallet
What is a cryptocurrency wallet? It’s software that stores the private and public key that adds as a link between you and the blockchain where your crypto assets are. Many people confuse crypto wallets with a storage place for cryptocurrencies but in technicality they just let you access your cryptocurrency on the blockchain with a crypto address known as the key. Without the key, you cannot complete a crypto transaction. You can send and receive cryptocurrencies during a transition with any company that accepts cryptocurrencies for payment.
If you follow the above-mentioned steps, you are ready to invest in cryptocurrency. No matter what cryptocurrency you invest in, prepare yourself for some instability, and analyze the price regularly.
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