How to Invest in Cryptocurrency: Essential Tips to Remember
There are many of them: Bitcoin, Ethereum, Ripple are the three major currencies. There are various others like Iota, Dash, Stellar and Monero and thousands more. Cryptocurrencies should be decentralized, offer anonymous transactions and build a financial system that exists alongside the traditional fiat currencies. Cryptocurrency is a fascinating asset with tremendous potential thanks to disruptive technologies. Read the following article to find out how to invest in cryptocurrency. You can contact Expay24 for more information. Our team of experts can help you with all the investing issues.
Investing in Cryptocurrency 2019
Many are considering investing in cryptocurrencies. This can even be done by people who are normally not familiar with the financial markets. Anyone with an internet connection and some start-up capital can trade with a cryptocurrency. But it is not entirely harmless. Where there are opportunities, there are also risks
You just have to look at the enormous growth of Bitcoin to see the potential. At the beginning of 2016, a BTC was worth over 400 euros; at the beginning of 2017, the price was already 1,000 euros. In December 2017, the coin reached its all-time high of just under 20,000 euros. The digital currencies are characterized by rapid growth and large exchange rate fluctuations. That’s why you can earn more with them than with classic fiat currencies
They are also interesting as a technology system. The blockchain could change the way we deal with money and the internet. Those who invest here invest their money in a technology company. For example, Ethereum was booming with its smart contracts and ICOs, an alternative method of crowdfunding.
Iota focuses on the Internet of Things and Industry 4.0. The global acceptance of digital currencies is growing.
When is it worth investing?
When to start investing depends on the mood in the market and the type of investment. Depending on the strategy you want to pursue, there are other cheap entry opportunities. If you only want to buy one cryptocurrency and then keep it on your cryptocurrency wallet, the following applies: buy low, sell high.
This strategy invests in a cryptocurrency while the price of the cryptocurrency is just low. Then you wait until the price rises again and sell them at a profit. This can be done with the top 10 cryptocurrencies that are currently in a bear market, or with new, as yet unknown cyber currencies that have a lot of potential
But you also need a lot of patience for this strategy, because it can take months to years until the price has risen to such an extent that the sale is worthwhile. There is also the option to mine cryptocurrency and then sell it.
The other investment strategy can always be followed. This is about forex trading, forex trading with the cryptocurrency similar to forex trading with fiat currencies such as dollars and euros. It will invest in the course by speculating on the fluctuations. And since the market is always fluctuating, currency trading is always possible. However, you have to be very familiar with foreign exchange for this type of investment.
New opportunities will emerge when the first cryptocurrency ETF is approved. The first cryptocurrency funds have been around since 2018. Long-term investments can be made here.
Best Cryptocurrency to Invest in
The question of which coin or token to invest in is asked again and again, but it is difficult to answer. The cryptocurrency market is unpredictable, subject to strong fluctuations and is easily influenced by external factors.
Bitcoin is still the number 1 cryptocurrency. In 2009 the first BTC, the abbreviation, was created. Since then it has remained intact in the first place. No other digital currency has so far achieved such a commercial value. So far, Bitcoin is the most widely used coin, which is also accepted by many traders on the Internet.
In 2018, the price was not as high as the year before. The courses always went uphill at some point and this was also the case in 2019. However, one should not ignore Bitcoin alternatives such as Dash and Litecoin.
Ethereum and Ripple argue for second place. Ethereum is not just a cryptocurrency, but an entire ecosystem for decentralized applications and smart contracts. The token, ether, is used as fuel for this ecosystem. With Ethereum, completely new business ideas can be implemented based on the blockchain.
Or they can become more efficient, faster and more trustworthy through smart contracts. Ethereum is not the only platform for smart contracts. NEO, Cardano, and EOS are building similar platforms and are all promising projects.
So also IOTA. It’s token, MIOTA, is to become the fuel for the “Internet of Things”. IOTA is one of the most innovative blockchain projects now. Also, the developers of IOTA work closely with businesses and large companies. An early investment could be worthwhile.
Coins like Zcash and Monero are “privacy coins” and serve the growing demand for anonymous transactions. This demand will certainly not disappear in 2020 either.
Which Cryptocurrencies are Profitable in the Long Term?
It cannot be said with certainty in which cryptocurrency you can invest and will therefore still make a profit in many years to come. The potential for more growth is there. But the market is still young, just like the technologies behind it. We are dealing with the first generation here and there is no guarantee that they will all still be there in five or ten years.
The cryptocurrency charts alone are not enough to decide which ones will be worth a long-term investment. A smart investor study the cryptocurrency news learns about the improvements and updates and what plans the developers have with their digital currency. Many of them are still in development and have not yet reached the final stage.
By looking at the track record of the developer or the company behind the blockchain, you can assess whether the project will still be successful in many years to come. You should also ask yourself the question: Does the coin or token serve a purpose? Is there a demand? Is it already used or will it still be used in the future? Is the cryptocurrency constantly evolving and does it meet current requirements?
How Much to Invest?
In theory, it is possible to invest with small amounts that are in the double-digit range. The profits on such amounts should not be particularly high (unless the price of the cryptocurrency is exploding, which can happen). It is possible to trade a cryptocurrency on the side, with no intention of making a living from it.
However, some traders mainly trade cryptos and use them to finance their livelihood. This happens, for example, in day trading or currency trading. Several hundred dollars are invested every day. So it all depends on how you want to approach trading.
But anyone interested in crypto trading should be aware of the enormous risks. The digital currencies are very volatile and hardly regulated. There is no security, there are many so-called “shitcoins” on the market that are not worth trading. An investment in a shitcoin ends in a loss of money.
Because of these and many other risks, such as the impending regulation and even bans, the amounts should always be in an area that does not ruin you. One should be able to cope with the possible loss. There are many stories on the internet of people who have been seized by the hype and invested their entire wealth. And then stood empty-handed.
Of course, there are also stories of Bitcoin millionaires. Behind such stories, there is often patience and thoughtful action.
Tips and experiences
Be prepared to take too much risk
Indeed, the digital currency market is sometimes very lucrative, and if you were to buy bitcoin for a small amount of money five years ago, for example, it would turn out to be a large investment, but the reality is that the market is under special circumstances (such as being unsecured). And high volatility at high risk.
These currencies are not like stock companies that make money and own real estate, factories, raw materials and the like. Digital currencies are nothing but a string of codes and no government supports them (not like dollars)
So as their price rises, their price may drop sharply at any moment.
Know that no one can predict
This feature is also available in stock and stock markets, but in the digital currency market, this feature is extremely prominent. There is no law, economic theory, model, or process that can effectively predict the digital currency market.
These currencies only go up and down based on supply and demand and there is no control over them. There is no institution to control the growth and decline of these currencies, and there are very few fundamental factors that can predict the price of digital currency.
Any event internationally can cause bitcoin prices to drop by hundreds and even thousands of dollars. For example, when a country declares that it does not allow bitcoin mining or digital currency use in the country, the news may trigger a price shock.
It is vital that no one, no matter how much he or she is in this market, is not able to predict the price of these currencies.
You have to be very careful
This may seem a bit obvious, but before you do anything, make sure you’re doing it with full awareness. For example, your inexperience may cause you to enter and send bitcoin incorrectly, or even compromise the security of your wallet for lack of attention to security.
There is no turning back to your mistakes in the world of digital currency, if you lose some money it is almost impossible to get it back.
When a transaction is sent to another wallet, it is irreversible, even the owner of the wallet is unknown and there is no institution like the bank that controls or monitors the transactions.
Working with wallets also requires a lot of precision, because bitcoin wallet addresses are specific and you can’t remember them.
Bitcoin’s address is something like this: 1CWAzSPKvU9kpFMbuU7K6YKH4R3ePrxztY
Addresses are made up of random characters and entering the wrong character may cause your bitcoin inventory to be lost during shipping or may be sent to the wrong destination.
Improve the security of your account
There are many wallets for digital currencies online, offline and hardware. There are also many platforms for trading these currencies. But not all of these wallets, tools, and platforms are reliable.
Some online wallets that do not allow you to back up your account balance also have risks, and sometimes fraudsters have no purpose other than stealing your funds by making online wallets. Some valid online wallets for Bitcoin and Ethereum are available in blockchain.info (you are responsible for your use of this site)
Another security aspect is password protection. You should never use a password on multiple sites. Keep your private keys safe.
Be aware of phishing attacks and enter your password just by checking the site address. Some sites replace themselves with valid sites, and by entering your password on those sites, you are practically giving your wallet details to the abuser.
Online wallets are more vulnerable to attack and hacking. Backing up your wallet and not keeping a lot of money in your online wallet is another way to increase your security. You can use hardware or offline wallets to hold high amounts of currency. One of the types of hardware wallets is known as Ledger.
Set aside excitement
Emotional buying and selling are also available in the digital currency market. This is a characteristic of novice traders who, when they see signs of rising or falling prices, are excitedly buying or selling currencies and often do not get good results.
Keep in mind that there is always a drop in prices in different markets, and if you invest in valid currency, be patient. Digital currencies are highly volatile, and those that are more popular usually recover again after a period of decline or growth.
Avoid Ponzi systems
Any site that promises to double Bitcoin should not be considered valid. With the advent of digital currencies and the difficulty of tracking transactions of this kind, Ponzi systems have also become increasingly active in this area.
Ponzi systems are systems that raise the funds of individuals through the pretext of paying profits to investors in different ways, and at the beginning of their work, they also pay the profits of the early investors. This benefit comes from the money of future investors, and the company or person receiving the capital does not need to do business with the money received. Ponzi systems are exposed after a while and these are the investors who are being cheated.
To quickly identify a Ponzi system, first of all, refer to your reason. Any system or site that promises to make a lot of profit in the short run, and whose identity, person, or company, as well as their activity, is not well defined, is likely a Ponzi system.
Identify the currency before investing
The initial release of digital currency means the release of tokens of a new currency, which is usually publicized by the developers of the currency in widespread publicity.
But unfortunately in the early days of digital currency, there are a lot of scams, and even currencies that seem to be valid, after a while their scammers have been proven. Sometimes people even invest in currencies that they do not fully understand and are just fooled by the greed of acquiring wealth in the short run simply by looking at the high-growth currency charts.
We’re not going to say that the new digital currency offerings are completely fraudulent, but you have to do a lot of research before taking any action.
There have also been some successful and credible early releases and will be done later. For example, the initial release of the ethereum currency is a valid case.
Never panic, don’t run after any hypes.
When the courses tumble, remember “HODL”: hold on for dear life. Better times will come, it has always been that way. If a coin is currently being hyped, then do not buy it immediately without informing yourself beforehand. Don’t fall for “FOMO”, the “fear of missing out”. Individual markets can also be manipulated to quickly drive up the price of a cryptocurrency. The masterminds then sell expensive, the buyers stay on a worthless shitcoin.
Spread the investment.
Don’t invest everything in just one digital currency. Spreading your investment reduces the risk of losing everything and can better cope with bad investments. For example, you can invest 50% in Bitcoin, 25% in other coins of Top 10 and the rest of the money in smaller cryptocurrencies, which hardly anyone has on the screen, but also have a lot of potentials.
Not only watch the cryptocurrency course/ list but also study the news.
External factors, such as state regulations and bans, can have a significant impact on the courses. Likewise, the development of new technologies or upcoming updates.
Many important crypto personalities are represented on social channels.
You can follow them and get important news and buy recommendations quickly.
With a cryptocurrency app for mobile devices, you can carry your credit anywhere and anytime.
Some apps work like a wallet, others are aimed directly at trading.
How do you learn to invest?
Various cryptocurrency brokers offer you a demo account. With this demo account, you get a virtual credit that can be invested like real money. This makes it possible to learn to invest in cryptocurrency without actually losing money. You won’t earn any real money with it, but you can learn the basics of the demo account.
Some brokers also offer tutorials and learning videos on their platforms. Another option is “social trading”. In social trading, investment strategies are copied by professional traders. Newcomers benefit from their experience. So you can also learn to trade a cryptocurrency.
Investing in cryptocurrencies is a new area that needs a lot of research. Investing in these currencies, while profitable, has a lot of risks that no one should ignore. The key here is to be fully aware of all the tools, sites, wallets and everything you deal with in the field of digital currency, and not dismiss all claims without consideration. Contact Expay24 to learn more about investing in cryptocurrencies. Our team of experts will guide you through this.