Over the last few years, the popularity of cryptocurrency has skyrocketed beyond many expert’s expectations. However, the profitability of the crypto market couldn’t exist without volatility. For example, CNBC informs that Bitcoin plummeted below $23,000, hitting its lowest level since December 2020.
Despite the dramatic swings in cryptocurrency price, investors and crypto enthusiasts stay in business. Why? Any experienced investor will tell you that sharp upward and downward movements in cryptocurrency prices over short time periods are inevitable.
Many people have difficulty understanding the technology that drives cryptocurrency. However, through proper investment strategies and management, you can become a king of investments even as a total beginner.
This guide intends to shed light on how to start investing in cryptocurrency and what are other different trends to watch out for.
How to get started in cryptocurrency in 5 steps?
Step 1: Choose A Cryptocurrency Exchange
To kick start your first investments, you need to pick a reliable exchange platform where you can buy and sell digital currencies, like Bitcoin, Ethereum, Dogecoin, etc. Pay attention to execution prices, fees, liquidity levels, and a wide selection of available cryptocurrencies when making your mind up. The market of investing and trading platforms is very saturated, but the most popular crypto exchanges are:
Step 2: Verify your identity
Depending on the exchange venue you have chosen, you will need to verify your identity. gather your personal documents. You can be asked to include pictures of a driver’s license or Social Security card, as well as information about your job and source of funds.
Step 3: Connect your exchange to a payment option
Next, you will want to connect your debit or credit card. Make your own research on the processing and transaction fees associated with each payment option offered by your bank.
Step 4: Start Purchasing Cryptocurrency
Now that you’ve set up your account with the help of the exchange service or linked your bank account, it’s time to place your first crypto order. If you are a newcomer, it is much better to purchase a fraction of the desired coin. In addition, devote time to double-check the fees of whatever platform you are using not to pay a king’s ransom for a withdrawal.
Step 5: Store Your Cryptocurrency In A “Wallet”
After opening an account, you will have your own digital wallet for multiple purposes – buying, swapping, and storing crypto. The codes for all your cryptocurrency will be securely held there. So, no room for worrying about stolen keys or accounts anymore.
Cryptocurrency is a high-risk investment because it’s a volatile asset that has no intrinsic value. Besides the extreme volatility of tokens that scares investors, many are also concerned about making a mistake or not securing their cryptos in a proper way. Thus, it is important to find a one-in-all platform where you can execute exchanges and investments without frictions and apprehensions. Just open an account at a cryptocurrency exchange and enter the game without any obstacles.
The best cryptocurrencies for beginner investors
If you are looking for an exact answer here, let me get ahead and say the crypto world is too unsustainable to claim one cryptocurrency is more profitable than the other. Its value can equally slump and skyrocket on one day or another. That’s why you should use various analysis tools to identify opportunities and determine the best one for yourself. Always check the price, availability, demand, and transaction speed of a cryptocurrency.
You can opt for the most leading coins. One of the most essential reasons is that the information about these cryptos and their blockchain is easily accessible and comprehensible for a newbie.
However, The well-established ones such as Bitcoin and Ethereum are in a freefall at the moment, so you’d better avoid investing in them. To play it safe it is more reasonable to focus on stable cryptocurrencies.
Alternative ways to invest in cryptocurrency
Apart from investing in cryptocurrency, there are other ways crypto users get into the game and make money. The most popular alternatives include:
Crypto funds are a relatively new form of investment funds that appeal to investors because of large returns and minimum risks. This new segment of the investment industry is thriving. According to Statista, the value of assets under crypto funds management reached more than 59 billion U.S. dollars as of third quarter 2021.
Another fast-growing area of the decentralized finance (DeFi) system is staking. If you hold some cryptocurrency and don’t want it to idle, you can lock it up in exchange for rewards or interest for staking efforts. A PoS-based blockchain exchange such as MyCointainer is your gateway to a huge chunk of revenues in the role of a transaction validator.
As the name goes crypto future is an agreement between investors to trade cryptocurrency at a specified price on a particular date in the future. It is like a bet on a cryptocurrency’s future price that allows investors to get exposure without purchasing crypto.
The advantage of investing in an ETF is diversity. ETF allows you to invest in a fund that holds a multitude of diversified shares or other assets. Also, ETFs can be traded directly from investors’ existing brokerage accounts. By investing in it, you don’t need to learn how to use a new cryptocurrency trading platform.
The bottom line
There are endless possibilities for making money from cryptocurrencies. Depending on your objectives, you can start small by opening an account at an exchange platform and begin to develop your investment tactics. Assess the prospect before formulating an investment plan and keep in mind that every investment carries a risk. But no big guys make a fortune without taking a gamble.