By now, you’d probably have heard about how cryptocurrency has exploded in popularity over the past few years.
While Bitcoin (BTC) first started as a medium of exchange on the deep web, it certainly has come a long way since then. Instead of being the currency of choice of the deep web underworld, Bitcoin is now a legitimate mainstream investment.
Now with Coinbase; a major cryptocurrency company, going public, it has been made official that even institutional investors have begun accepting crypto investments.
Along the way, altcoins such as Ethereum (ETH) and Litecoin (LTC) have also been equally popular with prices hitting record highs.
Naturally, even the most conservative of investors would not mind investing in cryptocurrencies. Given the phenomenal return on investment, it’s easy to see why.
However it should be noted that the crypto market is absolutely merciless. Price fluctuations occur without warning and are subject to change at a minute’s notice.
So if you’re looking to start investing in cryptocurrencies, here’s some basic but effective advice to get you started.
1. Secure your cryptocurrencies
The first thing you’ll need when investing in cryptocurrencies is a wallet.
Nope, not the one in your pocket – a crypto wallet.
Crypto wallets are divided into hot and cold wallets. A hot wallet stores your cryptocurrencies online for easy access. Hot wallets are online 100% of the time and a convenient choice if you have a small quantity of cryptos on hand.
On the other hand, cold wallets store your cryptos on either a pen or hard drive. Unlike hot wallets, cold wallets are less convenient but significantly easier to secure.
Cold wallets are favored by investors who have huge quantities of cryptocurrencies and are concerned about security.
2. Have a goal and keep to it – don’t invest emotionally
Now that you’ve got a means of storing your cryptocurrencies, it’s time to get investing. Crypto markets are open 24/7 and never close unlike securities exchanges that are open 5 days a week from 9am to 5pm only.
When investing, always remember to set a goal for yourself and keep to it. Given how volatile the crypto market can be, you’ll always be tempted to hodl for a little longer before liquidating your assets
Gambling with cryptocurrencies is extremely ill-advised and will only lead to losses. Once you’ve reached your set goal, liquidate your holdings and move on.
While you won’t be striking gold with this approach, you’ll find that your returns are much more sustainable on the long-term.
3. Only work with trusted sites
The lack of government oversight and the decentralized nature of cryptocurrencies are some of the main reasons why cryptos have become so popular in recent times.
While an absence of regulation makes for interesting investing, this lawlessness has given rise to a large number of scams and hack attacks. Being a fully digital currency, crypto wallets and exchanges are a favourite target of cybercriminals.
Because of this, it is especially important that you work only with trusted partners with a proven track record. Unproven crypto exchanges or wallets could collapse and disappear overnight leaving you with nothing else.
You can also find crypto friendly banks in this article by Tezro.
4. Do your homework
More than one investor has made the mistake of jumping in with two feet and a non-existent understanding of the crypto market. As a result, many end up making the wrong investment decisions which consequently leads to disaster.
This is why it’s important that you read up on the types of crypto assets that you’re investing in and study current market conditions.
Contrary to popular belief, cryptocurrencies are still very much affected by real-world events. Government instability, new financial legislation, and geopolitical tension can result in price fluctuations.
In order to stay on top of things, always remember to keep one eye on the news and another on your investment portfolio.
The crypto world of tomorrow is a very exciting one with plenty of opportunities. Just remember to be safe and follow these investment tips.