In recent years, investing in cryptocurrencies has been the talk in town. The majority of people want to invest in this new industry that seems to be much better than precious metals such as gold and silver. However, it can quite difficult to understand how it works if you’ve never taken the time to learn how to invest in cryptocurrencies.
Are you a risk-taker? If you are reading this, then you have probably invested in something that brought back great returns. If this is your first investment venture, then you probably have the spirit of a risk-taker. Remember, you cannot get returns if you are not willing to risk. The higher the risk, the higher the returns.
There are a variety of platforms all over the internet that will make it easier for you to buy and sell cryptocurrencies. However, the buying and selling process is not as easy as acquiring traditional currency. If you are willing to invest and take the risk, there’s nothing that can stop you from achieving your goals.
Before we get to the investment part, it’s important to understand what cryptocurrencies are. There are many cryptocurrencies that you can get across the world today. Therefore, it can be difficult to come up with a definition for all of them.
However, we cannot lack words to describe them. Essentially, cryptocurrencies are digital currencies that have been encrypted and decentralized. The most common cryptocurrency is Bitcoin because of its ledge system which is decentralized and permanent.
Since Bitcoin is the most valuable and widely known cryptocurrency, there have been many alternative coins made out of it. They include Bitcoin Diamond, Monero, Bitcoin Cash, Apollo Currency and Dogecoin to name a few.
The majority of people are only interested in holding Ethereum and Bitcoin for a long time while others only want to make money by buying at low prices and selling high. Their wish is to fatten their wallets using the easiest and most effective way.
Cryptocurrencies are quite riskier to invest in compared to traditional currency or precious metals because they are not backed by most governments across the world. By investing in cryptocurrency, you’ll learn lots of valuable lessons.
Investing in Cryptocurrency
To start your new investment venture, you need to know where to buy a cryptocurrency and where you are going to store it. You should always buy cryptocurrency in cryptocurrency exchanges. Some of the common cryptocurrency exchanges include GDAx, Coinbase, and Bitfinex.
Exchanges will allow you to buy a wide variety of currencies with your debit card. You don’t need to be loaded to invest in cryptocurrency. You can purchase fractions of different coins depending on your situation.
If you are interested in alternative coins, you’ll have to buy Ethereum or Bitcoin to make the purchase. In general, you cannot buy alternative coins with traditional currencies such as euro, dollar or starling pound for now. However, as more people continue investing in cryptocurrency, we expect this to change.
Exchanges earn money by charging its clients transaction fees. However, several sites will allow you to communicate with those who want to sell cryptocurrency directly. One of the best sites is Local Bitcoins.
While you’ll save on transaction fees, the risk is higher because you’ll not be in a place to verify the currency you are about to buy. If this is your first time buying cryptocurrency, you should use an exchange before thinking of communicating with sellers on open sites.
Another great way to buy cryptocurrency is by using the Bitcoin ATM. Currently, there are more than four thousand Bitcoin ATMs spread across seventy-six countries. This option is quicker and more effective compared to using open sites.
Storing Cryptocurrency
After buying cryptocurrency, you’ll have the option to store it in your wallet. When I say wallet, I’m not referring to the wallet in your pocket or handbag. A cryptocurrency wallet is a secure place that allows you to store your cryptocurrency portfolio. It can either be a hardware or software wallet.
Software wallets are easier to access and trade compared to hardware wallets. When you create an account on Coinbase and find freedom of speech essay at Gradefixer, you’ll enhance your knowledge and automatically get a software wallet.
A great thing about hardware wallets is that they are more secure as compared to software wallets. They normally look like USB hard drives. It’s best to use them if you are planning to hold your cryptocurrency for a long time. A hardware wallet can be compared to a savings account while a software wallet to a checking account.
Do you need to invest in cryptocurrency?
The cryptocurrency market is very volatile. In 2017, the price of Bitcoin was at its peak with a value of $17000. At the beginning of 2019, its price had dropped down to $3500. Just like any other investment, it’s important to weigh the risks before investing in cryptocurrency.
If you don’t like taking risks with your investments and you want to create your wealth in the long term, you should not invest in cryptocurrency. And that goes for most investments across the board. No one can predict how the market will be in the future.
However, most investments grow when they are less volatile. When it comes to cryptocurrency, you’ll be more of a speculator than an investor.
If you love cryptocurrency and you are willing to take the risk, then you should give it a try. Cryptocurrencies have been around for about ten years now. No one expected them to last this long. Therefore, it is likely that Bitcoin will retain or even increase its value in the future. The same can be said about other forms of cryptocurrencies.
Similar to any other investment, the one thing you need to keep in mind is the level of risk you are willing to take. You should avoid situations where your financial stability and health depend on the value of cryptocurrencies. If you are comfortable with investing in cryptocurrency, you should go for it. Plus, you may be one of the few lucky investors.
Benefits of Investing in Cryptocurrency
There are lots of reasons why you should consider investing in cryptocurrencies. Let’s discuss some of the reasons why people are choosing cryptocurrency.
Safe and Easy Transactions
Sending money in the form of cryptocurrencies is one of the easiest and most secure methods in the online world. The exchange of cryptocurrencies happens when both private and public keys are used. This approach is not only secure but also lowers transaction fees.
Transparency
Cryptocurrencies are built using blockchain technology. Essentially, blockchain is an online ledger that can be used by most technological devices. Through this ledger, you can easily verify your transactions. The blockchain technology has built trust among cryptocurrency buyers and sellers and honesty.
Possibility of high returns
If you’ve never invested in cryptocurrency, you can get some high returns in the end. As the saying goes, the higher the risk, the higher the reward. While you might not hit the one-million-dollar mark, you’ll get something worthwhile out of the venture.
As we said earlier, the cryptocurrency market is quite volatile. Therefore, you have an opportunity to get something out of it. The key to success while investing in cryptocurrency is purchasing the right coins.
Diversification of coins
Just like any other investment, you can diversify your cryptocurrency portfolio. You need to diversify the currencies and coins that you want to invest in to shield yourself from the volatility of the crypto market and reduce the chances of losing your hard-earned cash.
Conclusion
Since they were introduced into the market, investing in cryptocurrency has been a trending topic across the world. Just like any other investment, cryptocurrencies have risks and returns.
The higher the risks, the higher the returns. You need to keep in mind that you should always take calculated risks. After all, you don’t want to lose your hard-earned cash.
Since the crypto market is volatile, you should be okay with the uncertainty. As an investor, you should not avoid cryptocurrency because they are at high risk. The worst thing you can do is not owning any cryptocurrency coin.
Since 2016, more coins apart from Bitcoins have been introduced into the market. This means that you have a wide variety of investment options to choose from. We’ve discussed altcoins and the different methods you can use to purchase them depending on your convenience.
Before investing in a particular coin, you need to do some research on it. This is one of the best ways to measure the risks you are about to take. Read more on crypto market predictions. Do not entirely rely on them because no one can accurately predict the future. But it’s one of the best ways to understand the crypto market.
In general, there’s never an ideal time to purchase cryptocurrencies. You should avoid buying these coins when they are either at the peak or crashing. Buying them when they are relatively stable will enhance your financial stability and reduce risks. With these facts in mind, it shouldn’t be difficult to invest in crypto. Enjoy the ride!
About the Author:
Connie Elser is a professional writer and financial advisor. She loves sharing her insightful thoughts and experiences in investing and financial independence regularly on her website. During her free time, you’ll find her walking her dog or traveling with loved ones.
