Bitcoin, the first cryptocurrency, was dismissed as a passing trend in 2009. While the blockchain technology behind Bitcoin impressed the tech community, it failed to capture the public’s interest as a viable investment alternative. After more than a decade, plenty of new cryptocurrencies have entered the crypto market, with Bitcoin emerging as the most valuable.
Investing in cryptocurrency is on the minds of all investors right now. People who acquired cryptocurrency before the price boom in 2017 are reaping the rewards of their best financial decision. So, are you ready to begin your cryptocurrency investment journey?
How To Invest In Cryptocurrency?
1. Start Small
The crypto market, like the stock market, is extremely volatile, which means values will drop significantly. It is only advisable to invest in cryptocurrency after ensuring that you have sufficient liquid funds to last at least six months without incurring any debts. Once you’ve figured this out, start investing in stocks (if you haven’t previously) to gauge your risk tolerance. Set aside a tiny portion of your money to invest in cryptocurrency once you’ve proven you can withstand the ups and downs. Limit your investment to 5-10% of your income if at all possible.
3. Choose your cryptocurrency
Yes, there are multiple cryptocurrencies on the market at the moment, each with a different pricing point. However, it is not wise to jump on board and invest in five different small cryptocurrencies. To choose the correct crypto coin, you’ll need to do a lot of research. Keep an eye on what’s going on in the market, compile a list of the top five performing cryptocurrencies, and track their progress. Bitcoin is currently the world’s largest cryptocurrency, as well as the most trusted, ahead of Ethereum, Ripple, Litecoin, and Binance Coin.
This is why it’s the most crucial step in your investment journey. Many cryptocurrencies that entered the market in the last decade have either plateaued or vanished completely. This means that a single hasty decision can transform your $100 investment into a big fat zero.
4. Select the Right Cryptocurrency Exchange
It’s simply a platform where you can buy, sell, and store your crypto assets. Here’s a comprehensive list of the best cryptocurrency exchanges, along with transaction fees, benefits, and drawbacks. These crypto exchanges are specifically built to manage cryptocurrencies and their volatile nature, similar to how banks and other financial institutions are designed to lend money, hold money, and give loans.
5. Select a Wallet for Your Cryptocurrency
What is a cryptocurrency wallet? It’s a piece of software that keeps your private and public keys and serves as a link between you and the blockchain, which holds your crypto assets. Many people mistake crypto wallets for cryptocurrency storage, however, they only allow you to access your cryptocurrency on the blockchain via a crypto address known as the key. A crypto transaction cannot be completed without the key. During the transition, you can send and receive cryptocurrencies with any company that takes cryptocurrencies as payment.
You’re ready to invest in cryptocurrencies if you follow the instructions above. Prepare yourself for some volatility, regardless of the cryptocurrency you buy in, and monitor the price on a frequent basis.
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