Are you interested to invest in cryptocurrency? It is tempting, isn’t it?
Well, when bitcoin was released first on January 9, 2009. Then, for the first few years, it did not gain much attention. Nobody was really interested. It was a new thing and people were suspicious about something that they have never heard before. But, as time went by the cryptocurrency industry grew and people started paying more attention. In fact, the industry grew surprisingly much.
In fact, now we are at the point where some have considered to see the cryptocurrency as a global alternative to currency, that will eventually replace sovereign currencies such as the EURO and U. S. dollar.
Many people have invested although they don’t understand how cryptocurrencies work. Just like in every other business there is a risk investing in cryptocurrency also. But if you are willing to take the risk then you might just see your bank account increasing. Well, we all love that, don’t we?
Since you are reading this article most probably you already have decided to invest in crypto, or maybe you just are curious. Below, we will give you some guides on how to invest in cryptocurrency in 2020.
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- You know nothing about crypto and you have to understand how it works
First and foremost, you have to accept that you know nothing about cryptocurrency, so you will have to research it and understand it.
Essentially, cryptocurrency eliminates the “middleman” like banks, allowing buyers and sellers to do business directly with each other. So, a cryptocurrency is a digital currency that is decentralized. As we mentioned earlier, bitcoin is the first currency to start in this industry and it is the most recognizable one. Bitcoin is based on blockchain technology, which is a permanent decentralized, ledger system. A good thing about cryptocurrency exchanges is that it allows you to use it anonymously and it’s a subject to price explosions that will make it look like a good investment.
- Pick your cryptocurrency
Although it has only been a decade since bitcoin appeared now there are maybe more than a thousand choices of cryptocurrencies you could invest in. Bitcoin is the largest one and it has become synonymous with cryptocurrency itself. It is mind-blowing that there are crypto exchanges who perform better than bitcoin but yet bitcoin gets the biggest attention. There are other cryptocurrencies such as Etherium, Monero, Dash, Ripple, Litecoin, Tether, Libra, etc. So, do some research and choose one of them!
- Pick the platform where you will buy your cryptocurrency
You can’t buy cryptocurrencies in usual financial places like banks or different brokers. But there are exchanges online that will allow you to do this. Some of the most popular exchanges are Coinbase, Bitfinex, Binance, Kraken, Terrexa, etc. You don’t need a huge amount of money to invest and you can actually buy coins with a debit card. You will have to decide how much you want to invest. It is not easy to make a decision but make sure you make a rational one. Maybe you should not start with a huge investment. If you already have made the decision to invest and want to see a list of crypto exchanges, you can go take a look at exchangeratings.com to see the latest, hottest, most popular and most trustworthy exchanges out there. On this website, you have a full list of crypto exchanges rated by users. If you are looking for transparent, unbiased cryptocurrency exchange ratings and reviews there you have it. Exchange Ratings represents an online meeting for traders and investors who want to interact and share experiences that they have had while doing business with cryptocurrency. So, go take a look!
Also read: Future of Blockchain Tech Innovation in the East
- How to store your cryptocurrency
Once you have bought your cryptocurrency now you will need to store it somewhere. And, obviously, you cannot store it in a physical wallet. So, you will need a cryptocurrency wallet which is a software program that will be necessary to store the private and public keys that connect you to the blockchain. You will have to unlock your cryptocurrency on the blockchain and that’s why they are called keys.
There are a couple of types of cryptocurrency wallets but we could classify them mainly on two types: online wallets and hardware wallets.
Online wallets are convenient and can be used from any device while hardware wallets store your key on a hardware device such as USB. They are more secure than software ones since there is no chance that they could be accessed by unauthorized parties.
Also read: Wipro, R3 Construct blockchain-based Alternative Model for Digital Money in Thailand
- How to invest smarter
As we mentioned before there is a risk in any business you want to invest. There is a big fuss about investing in crypto but it does not necessarily mean that it is a safe investment. It is just another option though.
Here is a great article for the two biggest exchanges BitMEX vs Bybit on the crypto industry that explains everything from sign up to fees in detail.
The price can always crash leading to a loss that none of us would like to go through. So do not invest based on hype and noise. A smart crypto investor would always invest in asking the right people for guidance. He would also calculate risks. It is not a game, so be wise and take your time to study things well before you invest. It would be nice to consult a financial advisor who would advise you on good asset allocation and could invest the money for you in a smart way.
Anyhow, after you have bought and stored cryptocurrency you have to be ready for anything in your way including surprises since cryptocurrencies could be unpredictable.
For example, the price of bitcoin reached its peak in 2017 of more than $17.000 and went down to as low as $3.500 as of early 2019. So, as you can see there could be huge changes and we could describe the cryptocurrency market as evaporative.
But if we take a closer look, bitcoin has been around for a decade. Many people did not even expect that it would last so long. So it is reasonable to expect more growth and it is worth investing.
So do not be discouraged. Go for it!