Feeling comfortable with making a Bitcoin or altcoin purchase, setting up a cryptocurrency wallet, and even finding trustworthy information can seem like a high barrier to overcome when first starting out. Keep in mind that every person involved with crypto was at one point in a similar position – a novice looking to improve his or her knowledge.
We’ve put together a list of useful tips to make your first foray into the cryptocurrency space as easy as possible.
Understanding the cryptocurrency basics
Perhaps the best thing to do, even before investing any money, is to get familiar with basic terminology and concepts that underpin the crypto ecosystem. Understanding terms like blockchain technology, cryptocurrency mining, decentralized finance (DeFi), altcoin, and stablecoin is a good starting point to get accustomed to the way digital currencies work.
Check our cryptocurrency FAQ at the bottom of our homepage for easy to understand and concise definitions of these terms. Head to the Crytpo Questions section for access to more detailed descriptions, ordered by a number of different categories and question tags.
Stay up to date with the latest news
You should try to find credible news sources that you can trust to be objective and that are updated frequently. You don’t want to make rash, uninformed decisions, like buying a random coin you actually know nothing about just because you fear missing out on potential gains.
At CoinCheckup you will find up to date news for major cryptocurrency-related events, useful articles and guides that will help you on your crypto journey. Other major crypto portals, such as CoinCodex, CoinDesk, and Cointelegraph are also great sources of information. Additionally, there are many reputable Twitter commenters and Youtube channels that provide useful information.
Whichever source of information you prefer keep in mind that things in the cryptocurrency space change on a daily basis so try making a routine out of checking different news sources.
Follow us on Twitter, Facebook, or on any other major social media platform for easy access to up to date news in the world of crypto.
Making your very first investment
The best and easiest way to get exposure to the crypto market is to buy some Bitcoin. The amount can be very small, just a couple of dollars are enough to make a purchase and get familiar with how things actually work in practice. Let the steps below guide you through the process:
- Pick an exchange – Coinbase, Gemini, Bittrex, Bitfinex are some of the most popular crypto exchanges on the market. Each of the exchanges we have listed offers the ability to buy Bitcoin. The exchange platforms vary greatly in terms of features and in the selection of coins they offer. Coinbase is a great pick for beginners, with its combination of a straightforward user interface and the selection of most popular cryptos.
- Buy some Bitcoin – Owning Bitcoin is a great place to start your crypto journey. Firstly, you will get to experience how buying cryptocurrencies work in practice. Secondly, Bitcoin provides an easy transition towards buying so-called altcoins, such as Ethereum or Litecoin.
Check our step-by-step guide on how to buy Bitcoin on Coinbase for further assistance.
- Setting up a crypto wallet – Leaving your crypto holdings on an exchange is not advised. Making use of a software crypto wallet (or hardware variant, if you are looking for maximum security) should be your top priority as wallets provide an extra layer of security for your digital assets.
Check our top recommendations for the best crypto wallet in 2021 to find the one that best suits your needs.
Pick the right investing strategy for you
There are many viable strategies for investing in crypto. Since each person has his or her own goals when it comes to crypto investing, there are many different but still viable approaches to choose from. Below you will find the most common investing tactics, their descriptions, and recommendations based on your experience level:
- Buy and hold – Perhaps the most popular and probably the easiest to employ is the so-called “buy and hold” strategy. It basically means that you buy an asset believing that it has great potential for long-term gains; in other words “time in the market” beats “timing the market”. People opting for this strategy don’t trouble themselves with short term price volatility and instead choose to hold to an asset for years, sometimes even decades. It is the best strategy for newcomers.
- Dollar-cost average – Dollar-cost averaging (DCA) is another strategy that is perfectly suited for newcomers, but widely used even among more experienced investors. It is yet another approach to mitigate the effects of short-term price swings. Instead of investing your funds all at once and trying to find the perfect time to buy an asset, you divide the total investment amount into smaller pieces and make periodical purchases of a target asset in an effort to reduce the impact of short-term volatility.
- Day trading – Once you acquire the required experience and get more comfortable with making trades, you can try to execute shorter-term intraday strategies to profit off of price changes of a given crypto asset. To become a successful day trader, you need not only to poses a deep understanding of technical analysis, which allows you to spot market inefficiencies, but also a great deal of self-discipline and objectivity.
- Leverage trading – The last investing strategy on our list has by far the highest risk to reward ratio. It allows investors to gain more exposure to market assets via credit provided by a broker at a premium of leverage fees and liquidation risks. It is absolutely not recommended to beginners. However, leverage trading can be a very lucrative strategy for experienced investors who can withstand the high degree of volatility that is associated with it.
Be comfortable with taking calculated risks
Cryptocurrency space is still relatively new and thus prone to quick changes. Because of this fact, savvy investors have the opportunity to make highly profitable trades and to participate in creating a new currency system. On the other hand, there is a higher degree of risk associated with cryptocurrency investing than in traditional markets, since the swings are bigger and especially long-term predictions harder to make.
No matter how diligent you are in your research it is pretty much a guarantee that you will make mistakes along the way, either by missing on a great opportunity or investing in a project that will ultimately not pan out as you had hoped it will. Don’t view crypto as a get-rich-quick scheme, instead, try to make calculated moves, don’t invest more than you are comfortable losing and remember to have fun along the way.
