When newbies get into the cryptocurrency world, some get lost in this sea of unknowns. Yes, there are a lot of goodies for those with a little know-how, considering that cryptos have grown from just a budding idea to what many industry experts call “a full-fledged market bonanza”. So the question is – how to invest in cryptocurrency?
If you are just getting started in cryptocurrency investment, no one can blame you if you keep on asking yourself some critical questions. Should you invest in cryptocurrency? Is the venture profitable? What crypto should you go for? How much money should you put in? Well, we are going to answer these questions – and more – hoping that you can know what to expect in the crypto journey. Who knows, this could just be the most exhilarating ride you’ve ever had in your life!
Building Your Portfolio
First things first! Which cryptocurrencies should you consider as you get started? Up until 2016, bitcoin was the best-known cryptocurrency. Those who wanted to get into the cryptocurrency investment had no choice than go for this digital currency. Well, this is not the case these days. We have many cryptocurrencies – called altcoins – that take a whopping 60% of market share (bitcoin takes 40%).
The cryptocurrency market is blazing, no doubt about that. But this means that the ecosystem can be a little bit confusing, giving you ample chances to grow your money – and, of course, to lose it in equal measure. We have seen each day giving birth to new coins and sadly, death to some old ones. Don’t fall victim and go for the wrong choice. Since you are just getting started, it’s not a good idea to try all coins or a huge number of them. Our advice – start with the well-established cryptocurrencies! Here are good options to consider:
Read also: What are the Risks of Holding Bitcoin?
How to Buy and Sell Cryptocurrency
This is the exciting part. You have chosen the right cryptocurrency to start with, right? Well, now it’s how you make the dollar! There are two ways you can grow your investment and enjoy some good returns on your cryptocurrency.
One, you could just store the crypto in your wallet and watch them grow. Yes, you heard that right! But the coin, store it in your wallet, watch as the figures grow with the value of coin increasing. Remember, though – this is a two way street. If you go for the wrong coin, your returns might not increase as fast as you expect. In the worst case scenario, if the value lowers, your amount will lower as well, making you suffer losses. But most of traders don’t worry about this. Just know when to get in and when to get out!
Two, hitting the exchange! This has long been considered as a reserve for the experts, but beginners are making a kill as well, trading and exchanging cryptocurrencies on major exchanges. Take it a step at a time, learning all the ins and outs of the exchange you choose and you will enjoy the fruits of your labor. Remember that these are also great places to buy your cryptocurrencies. Some of the best options to consider are:
- Coinbase (GDAX) – USA-based wallet
- Bittrex – One of the biggest exchanges
- IQ Option – Short trading available
Storing Cryptocurrencies: Exchanges or Wallets?
Investing in cryptocurrencies means that you are going to grow your investment over time (weather short-term or long-term). But where do you store them? Do you keep them in your exchange platform or transfer them to your wallets? Well, firstly, there’s some history of cryptocurrencies getting lost in exchanges due to hacking, updating and synching software and malware checking. You don’t want to risk your lifetime investment, so consider the trust you have for your exchange.
It’s recommended that you consider storing the cryptocurrencies yourself – in a wallet! You can either consider online wallets, or those that use Ledger or Trezor, storing your cryptocurrency offline for security purposes.
Read also: Mobile Apps to Buy Bitcoin
What’s the Best Time to Buy?
This is a tricky question. Think about it this way: cryptocurrencies, especially bitcoin and Ethereum are very volatile. The price is high today and low tomorrow. In this regard, there’s no general rule of thumb when the best time to buy cryptocurrency is.
However, industry experts advise that it’s not the best idea to go in when the price is at the peak or when a crypto seems to be crashing. Go in when the price looks stable and at a relatively low level. Take some time and watch the prices as you get yourself even more informed.
Cryptocurrency Investment Strategy
How much should I invest in cryptocurrency? Well, this issue is completely subjective, and it depends with the investor. Currently, cryptocurrencies such as Ripple and Ethereum provide great opportunities to grow your investment, but you must also remember that you could lose out if the prices go down. Invest what you can afford to risk. Pick the best cryptocurrency and make it happen!