The Ultimate Guide on How To Invest in Cryptocurrencies?

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Do you happen to be someone who is planning to invest in cryptocurrencies? Well, the chances are that you too have been charmed by the popular digital currency Bitcoin. Bitcoin remained to be the talking point of the industry last year. The digital currency is individually responsible for putting cryptocurrencies on the map for mainstream investors. Furthermore, keeping the soaring popularity of digital currencies in mind, it isn’t surprising to see more and more people wanting to jump on the crypto bandwagon. Cryptocurrencies are hailed as the currencies for the future and hence makes up for a good investment.

According to the industry experts, currencies like Bitcoin might replace the monetary reserves in central banks and become the dominant currencies for international trades. When that comes true, the value of Bitcoin may surpass the $15,000 mark by a significant margin. You would certainly want to be a part of this revolution of money when that time comes and it is imperative for you to start investing in cryptocurrencies at the right time. Of course, the best time to invest in cryptocurrencies was one or two years ago when the prices were much lower and could have returned prosperous revenues. But if you are a believer in the potential that cryptocurrencies hold, then today seems to be just about the right time to invest in cryptocurrencies.

Things To Before You Invest In Cryptocurrency:

High-Risk Investment:

Cryptocurrencies might seem anything like investing in the stock market for the uninitiated, but things are considerably different than they appear. Digital currencies are extremely volatile and risky. It takes just days for a crypto to reach an all-time high and then start crashing like a meteor. Additionally, the stance of major governments on cryptos remains to be ’vague’ at best for now.

Don’t Go Overboard

Another thing to remember is not to go overboard. What we essentially mean by that is invest an amount that you can bear to see coming back to ‘zero’. It is natural to invest significant amounts due to the fear of feeling left out when everyone around you is already putting their money on cryptos. We recommend that you start small and enlighten yourself about the industry before you go big.

Cryptocurrency Investment Strategy

More often than not, Bitcoin is the first choice for a major bunch of people as the coin to invest in cryptocurrencies. That makes sense as it is the reason why they know of the digital currencies in the first place. However, there is a plethora of alternate currencies today that can give you the best bang for your buck. There was a time when all the Altcoins were traded on shady exchanges as penny stocks. However, times are changing, and today they account for almost 60% of the total market share as compared to 10% a few years back.

There are a variety of options to choose from that make more sense than Bitcoin today. Currencies like Ethereum and Ripple have garnered mainstream attention and already enjoy a cult fan following. In fact, many industry experts have already hailed Ethereum as a better crypto than Bitcoin itself. And these three are just the tip of the iceberg. There are tens of other coins that have shown the potential of becoming the preferred currency in the next five years.

So that brings us to the question “Which Coin To Start With When Investing In Cryptocurrencies?”

Like we just mentioned above, it isn’t the brightest of ideas to invest all your hard earned savings in cryptocurrencies. Similarly, putting your money in a single currency can prove to be equally risky. Since the volatility of the crypto market cannot be trusted, it makes up for a good idea to put small amounts in different places. This may ensure that you get returns from a number of sources and that significantly decreases the risk factor that we have been talking about.

Research extensively on the internet and start choosing your coins. Look for their price and determine their stability by studying their graph. Pay close attention to their market cap which is honestly an aspect that most beginners overlook. If you find that extremely confusing, the best idea is to choose the top ten coins to reflect in your portfolio. There are currencies like Ethereum and Ethereum Classic that have grown popular due to their smart contract implementation and Litecoin along with Dash for their payment scaling. Monero and Zcash also make up for good choices for first-timers who are investing in cryptocurrencies.

Cryptocurrency News

If you happen to be the kinds who really want to dig deep and make a well-informed decision, then we recommend you dive into cryptocurrency news. Research your desired cryptocurrency and understand the underlying technology and the founders. Learn what they are investing in and the companies they are doing business with. A bug in the code or an error in their mainnet can directly reflect a change in prices and it certainly makes up for a better practice to read the Cryptocurrency related news more than once each day which will increase your chances of making better decisions. You can learn about more opportunities by following some of the blockchain influencers on YouTube, or Twitter.

Buying Cryptocurrencies Through A Cryptocurrency Exchange

After creating your portfolio, you need to decide the means you want to start investing through. The easier way to invest in cryptocurrencies like Bitcoin is by using investment vehicles like the XBT tracker, Bitcoin investment trust on Second Markets, Bitcoin ETI and more. They enable you to bet on the prices of Bitcoin without actually buying them which essentially means that you do not have to worry about storing your Bitcoins.

However, if you fancy a more traditional approach then start by registering at an exchange to begin buying Bitcoins directly. You will need to verify your identity and fund your account with the traditional currency in your country. The exchange will then allow you to buy or trade Bitcoins for a nominal fee. There are a few things that you need to consider before choosing an exchange like:

  1. Physical Location:

Choose an exchange that is physically close to you. If the exchange is in the same jurisdiction as you, your chances of getting your money back in case of a dispute are much higher. If an exchange is nowhere close to you, then choose one in a country with strongest laws for cryptocurrency trade.

  1. Choice of coins:

Not all exchanges allow you to trade in all the coins available in the crypto world. You have to choose an exchange considering what coins you desire to start with when investing in cryptocurrencies.

Should You Invest In Cryptocurrencies Right Now?

Well if there was a right answer for that, we would all be millionaires by now. The truth is there are no specific finger rules to when you should start investing in cryptocurrencies. The market is exceptionally volatile and ‘foreseeing’ is almost impossible in a market like this. Therefore, you must keep a record of the daily graph of your coin. Know what the company plans to do in the future and how the community is reacting to it.

These abovementioned points form the basis of the core process that you need to follow to invest in cryptocurrencies. Learn as much as possible before investing and try to develop a diverse portfolio to reduce the risks. Start small and educate yourself of all the aspects of cryptocurrency if you plan to go big in the future.

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Have any question? would love to hear in the comment section below.

*Disclaimer:  The article should not be taken as, and is not intended to provide any investment advice. Claims made in this article do not constitute investment advice and should not be taken as such. Do your own research and make sure you read our full Disclaimer.


About Author

You can best describe Pawan as a software engineer and a tech geek who happens to be obsessed with cryptocurrencies. When he is not working, his fascination with the blockchain tech keeps him rather busy.

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