It may seem as if investing in Bitcoin is a very complex process, but in essence, it is quite simple. It only takes a Bitcoin wallet account and sufficient funds that you are willing to spend to get started. Read on to find out more about cryptocurrency, ways of constructing an investing strategy, and how to set up a crypto wallet. Keep in mind that one of the most important things is to stay informed.
For starters, what is cryptocurrency?
The concept underpinning cryptocurrencies is that they are digital assets with value storing information that can be exchanged peer-to-peer. Cryptocurrency transactions can be conducted 24/7, unlike traditional payment systems. Crypto assets allow you to make payments securely no matter who the recipient is or where they reside in the world. Transaction records are kept with cryptography software powered by blockchain technology.
In the early days of crypto, Bitcoin was the first cryptocurrency to use this data-keeping software, commonly referred to as a public ledger. Cryptocurrencies are widely accessible and can be used by anyone with a laptop, smartphone or tablet, and access to the internet.
Top 3 tips to establish an effective investment plan
Making a plan for any kind of investment must include key financial parameters, including investment amount, setting goals, and exit strategy.
You should only invest money you can afford to lose. Dollar-cost averaging (DCA) often turns out to be the best long-term investment strategy in which you invest a certain amount of funds in predetermined time intervals, regardless of the short-term price movements of the asset you are investing in.
Binance Recurring Buy – A Simple Way to Invest in Bitcoin on Monthly Basis
Here are the top three tips that will help your get started on cryptocurrency investing journey.
1. Goal-setting
Specify distinct objectives that you want to meet with your investment. For example, pay off the debt it was bothering you once your portfolio reaches a certain threshold, or save enough so that you can buy a car with your profits.
Setting investment goals is an entirely personal endeavor and is heavily dependent on an individual’s capacity to handle risk. Rember to adjust your goals if the cryptocurrency landscape changes, or if your personal circumstances dictate a new approach to investment goals.
2. Define your exit strategy
Goal-setting and exit strategy go hand in hand. You must establish an exit strategy to recognize exactly when to convert your coins for fiat and not get greedy by chasing unreasonable returns. Profiting from a green market or cutting losses when a market is red is essential.
After you’ve settled on your investment tactics, set your goals, and outlined a clear exit strategy, selecting a crypto exchange to buy your digital currency holdings from is the next step.
3. Choose a crypto exchange that best suits your needs
Exchanges allow users to buy, sell, and trade cryptocurrencies online. Like an online brokerage, cryptocurrency exchanges allow users to deposit fiat currency (such as USD or EUR) to purchase cryptocurrencies (fiat-to-crypto).
Some exchanges allow users to earn interest on the cryptocurrency they hold within their account, and users can also trade their cryptocurrency for other cryptocurrencies (crypto-to-crypto). We highly suggest you make sure your crypto exchange is verified and well-established with high liquidity.
As we noted above, choosing the right cryptocurrency exchange to use is essential. You should choose a trusted exchange with a good security record. These five cryptocurrency exchanges present an excellent package for any cryptocurrency trader:
Top 3 tips to make sound Bitcoin and altcoin investments
Bitcoin can be purchased just as easily as stocks and can be bought with regular currency such as US dollars, Euros or British Sterling. To start, consider joining a cryptocurrency exchange that supports fiat currencies (USD, EUR, CAD, AUD …). Second of all, purchase Bitcoin using fiat currency.
Keep reading if you want to find out a few tips on how you can safely invest in Bitcoin and other digital assets to create a well-rounded crypto portfolio.
Here are the top three tips that will help you make informed investment decisions and identify good buying opportunities.
1. Diversify your portfolio
In addition to Bitcoin, there are a number of other cryptocurrencies to choose from. Namecoin became the first altcoin in early 2011 and served as an alternative use for virtual currency. Litecoin followed soon after.
For a competitive advantage, each altcoin usually possesses a feature that Bitcoin does not have or cannot match. Over the years, the list of altcoins has grown to include over 15,000 different cryptocurrencies. The market capitalizations of altcoins vary greatly, from barely over $1 million to more than $300+ billion in the case of Ethereum.
Here are some of the most popular altcoins:
Because of the bigger price swings, altcoins are generally seen as a riskier investment than Bitcoin. Despite this, altcoins can undoubtedly be an excellent addition to a cryptocurrency portfolio. It is wise to diversify your investments across different coins, as you should not put all your eggs in one basket.
2. Crypto wallet is a must
As the crypto world’s most famous mantra states: “Not your keys, not your coins.”
You should keep your coins in a wallet you control for philosophical reasons. Cryptocurrencies were created as an antidote to a money and banking system that centralized power away from the individual. In light of this, turning over control of your funds to a third party goes against the ethos of what digital currencies were designed to accomplish.
Investing in cryptocurrencies is not only about selecting the right coins but storing them as well. The first step to storing your coins “the right way” involves acquiring a cryptocurrency wallet, a digital wallet used to safekeep and transfer your digital assets.
If you’re seriously interested in mastering your domain, you must purchase an offline physical cryptocurrency wallet. Keeping funds on exchanges is practical but usually risky because of hacks, inaccessibility, regulation, phishing, etc.
Essentially, a crypto wallet is a software solution or device that enables users to safely store and access their public and private keys for their digital assets. You’re your own bank, and can manage it however you want.
3. Stay informed and engage with your favorite crypto projects on social media
Cryptocurrency space moves fast, and you’ll need to stay current with the latest developments. People with cryptocurrency holdings check the CoinCheckup crypto portal almost religiously to stay up to date with the latest news and price updates. Additionally, you can find a variety of resources for cryptocurrency-related content on YouTube and social media platforms such as Twitter and Reddit. Find the cryptocurrency commentators you prefer with a proven track record and follow them.
Most blockchain projects have built quite an online presence over the years and regularly interact with their followers online. Make sure to interact with your favorite crypto projects’ social media channels to stay on top of the latest technological advancements and to not miss out on exclusive community events, such as webinars, Q&As, promotional material, and more.
The bottom line
It’s sometimes easy to forget that cryptocurrencies are offering the world an alternative to traditional methods of finance and are still in the very early stages of development. When following and investing in cryptocurrencies, it’s guaranteed that you’ll make mistakes, miss out on great opportunities, and be confused. However, this is all part of the journey and if you set out to enjoy your experience with cryptocurrencies, you’ll make the most out of it.
