If you are not aware, the world of cryptocurrency is growing, and it’s only expected to get bigger in the coming years. It is ironic considering that hardly anyone was aware of the digital currency and cryptocurrency exchange just a few years ago. These days, more and more individuals are jumping aboard the crypto bandwagon to make a fortune. Therefore, it’s not surprising that there are currently 300 million people believed to be using cryptocurrency worldwide.
There are also over 200 cryptocurrency exchanges to make it easier for new users to trade in crypto. The sheer number makes it tough to pick a trusted exchange. But OKX is a trusted exchange that allows users to trade in crypto and enables new users to learn and hone their skills with research, tutorials, and market analysis. We would urge you to review the information provided by OKX to make an informed decision.
Cryptocurrency is now gradually moving towards becoming a mainstream investment asset class. For those who are just starting, it might prove difficult to get the hang of it. That is because cryptocurrency is currently unregulated and investing in it comes with a fair share of risks.
If you have made up your mind about adding some or other form of digital currency to your portfolio and wondering where to start, you’re in the right place. Here are some tips for investing in cryptocurrencies like Bitcoin and Ether, among others.
Which Cryptocurrencies are Worth Investing In?
Source: finance.yahoo.com
It goes without saying that it’s wise to do your due diligence before you take someone’s word for it and invest in some coins or tokens. The first step is to understand that buying cryptocurrency is not at all like investing in a good stock. A stock represents ownership in a company that has the potential to create profit for shareholders. On the other hand, cryptocurrencies are digital assets with zero intrinsic value.
A cryptocurrency is a volatile asset that witnesses an increase or decrease in its price due to simple supply and demand. Therefore, when you are picking up a cryptocurrency for the first time, look at how the supply increases for particular crypto and what is likely to drive the price of the coin higher.
You can figure it out by doing your research and reading the whitepapers published by the cryptocurrency team to attract interest. Look at what the team’s plans are, if anything is interesting in the roadmap that might spark an increase in demand, and so on. Also, find the community that has already invested in that particular crypto and gauge their thoughts about it.
It’s also important to consider how valuable cryptocurrency is currently. If the market cap for a particular digital currency is already too high, there might not be much growth potential.
What’s the best way to invest in Cryptocurrency?
Source: lehnerinvestments.com
Once you have found a cryptocurrency with good potential, it’s time to start buying. The first step is to open a personal account with a reputed cryptocurrency exchange. According to a Statista report, Binance, CoinFlex, HitBTC, and Upbit were the top five platforms based on 24-hour volume globally in April.
Before picking the cryptocurrency exchange for your trading, check their brochure and ensure that they support the cryptocurrency you wish to buy. Once you have created your account, add funds and make an order to buy your desired cryptocurrency. Once you place an order, the crypto exchange platform will find a sell order matching your buy order and make the trade. It will then hold your crypto in a custodial wallet. Ensure that the exchange you select has a secure wallet with technology like multiple-factor authentication like 2FA to keep your digital assets safe.
So far, buying crypto is the easiest part of the whole process. New investors must be prepared for the volatile nature of crypto. Bear in mind that cryptocurrency, in general, is more volatile than traditional investment assets like stocks. Don’t be surprised if the price swings by more than 10% in a few hours. At times certain events also affect the price of cryptos like a tweet from Elon Musk or Tesla announcing that they are sitting on a stockpile of Bitcoin and won’t let go.
Best Cryptocurrency Options for Beginners
Source: codecondo.com
As a new crypto investor, stay away from the allure of being able to find the next big thing or a diamond in the rough. It’s best to opt for the more established cryptocurrency with a well-settled infrastructure to dip your feet. By doing this, you’ll get familiar with how crypto works and where it fits in your portfolio without risking much.
Two no-brainers include Bitcoin and Ether, which are ideal for new crypto investors. While Bitcoin has the first-mover advantage and is more established, Ether is behind most DeFi projects using the Ethereum blockchain to provide fintech services without a central authority. These two are the most popular and trusted cryptocurrencies to invest in for beginners.
Other options include LiteCoin, which has been termed as silver to Bitcoin’s gold by the developer. It was launched in 2011 as the faster and more efficient version of Bitcoin, hence the lite in the name. Another option is Cardano (ADA), which is referred to as the third-generation crypto as it improves on the technology used by Bitcoin and Ethereum. These crypto options are fast, efficient, and environment-friendly. However, you’ll need to find a cryptocurrency exchange that offers these two and other obscure cryptocurrencies.
These are the top tips to invest in cryptocurrency for the first time. In the end, it’s all about doing your due diligence before investing and being confident in your choice to hang on during what could be a wild ride. If you can hang on to your investment, the payoff could very well be worth it, as cryptocurrency offers higher returns than most other asset classes.
