You probably can get enough of it in the news or have someone on your social media always telling you about cryptocurrency investments. Well, this is one of such crypto tales only that we’ll be simplifying the gist to make it easy for newbies to follow.
But the fact remains that there are many potentials with cryptocurrencies, and some even call it the currency of the future. And if you are looking to lock in on future investments, you should consider holding on to some coins.
You should know, for starters, that as with every investment, putting your money in cryptocurrency is risky. It is also rewarding if you know how to navigate the waters. But as a beginner, you want to ensure you understand the basics of cryptocurrencies before investing in them. The metal-res crypto investment guide explains the best coin options and what beginners need to know to make a profit.
What are Cryptocurrencies
Bitcoin, Ethereum, and other crypto have one thing in common. They are digital assets that allow you to trade online. They have no definitive value, and their worth is controlled by intrinsic supply and demand factors.
So this means that you can buy them at a high rate today, and they could be worthless the next. The twist to making profits is to buy cheap and sell when it is expensive. This means that you have to stay close to the latest statistics to know when to trade.
With no physical value, the currency is stored electronically in a digital wallet that allows the holder to send and receive units. With no central control, trade occurs on a peer-to-peer transaction, making it one of the safest currency trading methods.
A digital ledger technology like Blockchain is responsible for analyzing each trade entry and recording them for future reference. It also prevents the spending of currencies more than once for each transaction.
With thousands of different crypto in the market, Bitcoin remains the largest, with a market cap of over $500 billion. They are closely followed by Ethereum. But this doesn’t make them the only coins worth investing in, but they are for sure the safest as they have shown a good deal of performance over the years. The link here https://www.investopedia.com/articles/investing/031416/bitcoin-vs-ethereum-driven-different-purposes.asp has more on Bitcoin and Ethereum. This brings us to the next section.
Investing in Cryptocurrencies
You want to start with research. This enables you to understand the market and terms that are used in transacting. It is also worth noting that you shouldn’t on any account provide access to your blockchain. You should only share a wallet address for which you will be credited or debited the units for your transaction.
Before learning how to buy, spend, and trade cryptocurrencies, you first want to understand the risks. And for safety reasons, below are some of the things you want to take note of before you begin.
Risks Associated with Cryptocurrencies
The risk is numerous as there is no way to predict movement in the market. So the most successful traders are quite patient. Many newbies get scammed hoping to make quick money from the market, and this is where you want to take precautions. Avoid promos and offerings that look too good to be true. Also, you want to research any individual or company you will be investing your coins in.
You want to be familiar with the standing on the transaction of cryptocurrencies in your region. While there are no restrictions on the operation of private wallets, it may be illegal to use them as a form of payment locally.
But all the same, you can find businesses and services that accept crypto as a form of payment. All this is based on the fact that there is no central legalization on the use of such financial tenders, and govt tries to limit the risk for its citizens.
Investing in Cryptocurrencies
Still, stoked on the idea of owning some of the popular coins? You want to know the safest ways to get into the market as a newbie. Below are steps to follow.
Check Popular Options
Stable coins like Bitcoin and Ethereum could be your safest options to get started with cryptocurrencies. They are popular and, as such, are traded daily in the open market. You will likely be able to make quick returns on such coins if you buy cheap and sell when it is high. Still, you should know that the value will depend on the present market standings. So you want to keep an eye on the price fluctuations to see when you can profit from your coins.
Read the Whitepaper
There are also new and emerging coins that could be profitable in the near future. But you want to make sure that before you go to such options, that you study them closely. So you want to read the white paper that explains all you need to know about the project’s aims. You can use this information to deduce if the project is profitable or not.
Buy the Dip
It is common among cryptocurrency traders to buy when the price is low and sell when it is high. This is what is referred to as buying the dip. You will have to understand the market potentials and study the trends as they evolve. You can check here for more on buying the dip. But you don’t have to worry about this if you have expert traders with an understanding of the cryptocurrency market.
Personal research is key to staying ahead of the trend. And with a volatile currency like crypto, you want to be on top of every latest happening. So you want to be familiar with all the online resources for information and get proper training if you intend to trade yourself.