How to invest in cryptocurrencies – the total beginner’s guide
Beginnings can be difficult – and that is very true for those of us who wish to start investing in cryptocurrencies.
While you may want to rely on beginner’s luck, we believe that making your first crypto investment should be preceded by careful preparation.
This is why we have compiled this easy, step-by-step guide for total beginners on how to start investing in the cryptocurrency market.
Why should you invest in cryptocurrency?
The first question you may ask yourself is – why should I even think about making such a cryptocurrency-related investment? After all, the market can be quite confusing for newcomers, and the worth of your assets can fluctuate quite dramatically.
Despite all that, there are many reasons why the number of people trying their hand at the cryptocurrency exchange has been steadily growing. Here are some of the most popular reasons:
Potentially large return on investment
We all have heard of those lucky bitcoin investors who had become millionaires virtually overnight (or in a slightly longer, but still comparatively short amount of time).
And it’s not just bitcoin that has seen such an incredible increase of worth. Crypto-traders with money invested in different coins have seen their assets’ worth multiply many times over as well. Many of the newer tokens come with the potential to virtually blow up overnight, and if you invest in them, you might multiply your wealth immensely.
Increasing one’s wealth is one of the main rationales behind making any kind of investments, not just ones related to cryptocurrencies.
Involvement in the development of blockchain technology
The opinion that blockchain will change the world – similar to how the World Wide Web once has – is quite widespread amongst its propagators – and for a good reason.
It is already being implemented and researched by a multitude of large corporations and governments. Whether you like it or not, it is here to stay.
If you don’t want to miss out on this revolution, investing into cryptocurrency assets might be a good way to support the development of the blockchain technology.
Ideological opposition to Big Money
For some of the cryptocurrency users – including the very creators of Bitcoin and other early cryptos – using a decentralized currency independent of banks and governments is not only a form of rebellion, but also a way to cut out the middleman – in this case a financial institution with all its fees – from the equation.
And the fact that transactions using cryptocurrency are done directly between users, with no third-party involved, cuts the time necessary to complete them quite dramatically. In case of international transactions, a cryptocurrency transaction can be faster than a bank transfer by days or even weeks!
Let’s be real – blockchain, crypto, bitcoin – those buzzwords have become incredibly popular in recent years. It’s safe to bet that even your grandpa has probably heard the terms, even if he’s not sure what they mean. Investing in crypto does come with some bragging rights, and while we don’t necessarily think it’s a very good reason to invest, it is just a good a reason as any to learn more before moving on to more complex investment tools.
With all that out of the way, let’s get down to business: how to start investing in crypto if you don’t know much about it?
Learn about cryptocurrencies
Wait, what? – You might have thought. There you are, ready to buy your first bitcoin, and we’re making you do your homework?
Don’t scroll down to the next point yet. Let us make it perfectly clear: if you want to invest in cryptocurrencies, it’s best you understand them. And that does not mean just reading one blog post, or watching one YouTube explainer video.
You should do some serious research if you want to invest in a smart way. Otherwise, it will be difficult for you to make reason-based decisions and minimize the risk. It might be enough to learn about the big two (Bitcoin and Ethereum) first – we will get to researching other options later.
Decide how much money you are ready to invest
Before you invest, you have to know how much money you are realistically able to invest.
It might be tempting to sell your car or get a mortgage to invest in cryptocurrencies – but we advise against it. In fact, we recommend starting small, and increasing your investment once you feel more confident in the crypto-field.
Like with every other investment, cryptocurrency gives you the possibility to gain a lot, but there is also a risk factor involved – which is why you should never invest more than you can afford to lose.
Set up your cryptocurrency exchange accounts
Finally some action! Choose one of the cryptocurrency exchange websites (personally, we recommend DARB ) and set up your account.
Remember what we said about hackers? This is the part where you make sure they have a hard time obtaining your data. Use a secure e-mail (preferably one you use only for the crypto-related purposes) and a strong password. Check out these tips on how to make sure your password is safe: Creating virtually unbreakable passwords.
Buy your first cryptocurrency assets
As mentioned above, we strongly encourage newcomers to the world of cryptocurrencies to stick to the two most established currencies – Bitcoin and Ethereum.
That’s because they are less volatile, and while they are prone to some fluctuations, they prove to be stable in the long term. If you are looking for a long-term investment (as opposed to short-term trading), Bitcoin and Ethereum might be right for you.
Of course, this does not mean that you have to be stuck with the two of them forever. Get ready, because it’s time to…
Do some more research!
Now that you have some basic knowledge regarding blockchain-based currencies, and have invested in Ethereum or Bitcoin, it’s time to diversify your portfolio – but don’t buy the hottest new coin advertised all over the Internet just yet.
Before you decide to invest in a less established currency, do your homework. Learn how it works. Learn why it was created. Read the whitepaper. Join crypto-related groups on Facebook or other social media and talk to people with some experience when it comes to investing in cryptocurrencies. Talk to the dev team. You get the idea.
You don’t have to worry so much about the research and background checks if you only stick to the coins listed by us. In case of such exchanges, the work is done for you by the team of specialists working behind the scenes.
Once you make sure that the shiny coin you want to buy is not fool’s gold (or in other words: a scam), you’re ready to invest in it!
Make regular health checks
Sorry, champ, but the work is never over.
The situation on the cryptocurrency market can change quite dramatically. While you should generally not panic at short-term fluctuations, you ought to keep yourself informed, and reallocate your assets based on the circumstances at least once per six months.
As an example, let’s imagine you have invested into two cryptocurrencies. One of them has been steadily going up, while the other never got up after a sudden crash that happened a couple months ago. In such case, it might be a good idea to move the money from the latter to the former.
Now you’re ready to begin!
Now that you have the basic knowledge on how to start investing in cryptocurrencies, it’s time to actually begin investing! Applying the tips we have provided to practice is the best way to change from a crypto-dummy into a successful investor. So, go ahead and start your investment journey now!
Triệu Cường · 05/07/2019 at 5:46 am
FNet Club · 05/07/2019 at 7:07 pm