Are you planning to enter the world of cryptocurrency trading? The vast sums which have been made by early adopters of Bitcoin (even someone who invested the relatively modest sum of $100 at the relatively late date of five years ago could have cashed out for upwards of $14,000 this year) are a clear incentive to do so.
However, you must do your homework before you enter the cryptocurrency investment bullpen with all guns blazing. As with any new investment, understanding the basics of the sector before beginning can stand you in good stead when it comes to maximizing your return on investment (ROI), so read on to learn the three things you should do before buying cryptocurrencies.
Cryptocurrency Trading – Understand the ins and outs
As an entirely new form of spending and investing, cryptocurrency is not the most immediately accessible form of investment for those unfamiliar with its finer points. How does cryptocurrency work exactly? What is blockchain? Why do the prices of individual currencies fluctuate so wildly? How can you be certain that your assets are secure from cyber-crime?
Fortunately, you can find out everything you need at learncrypto a free learning platform, which will help to prepare you for what lies ahead. Taking the time to understand the ins and outs of the process of buying and selling crypto will help you to avoid any unpleasant shocks further down the line, so it’s a highly advisable course of action before you set out.
Find reliable services
Most cryptocurrency transactions take place on an online exchange platform, which essentially works as a broker to unite buyers and sellers anonymously. These platforms will take a percentage of any deal to compensate for their services, but in doing so, they facilitate the process. Finding a reputable one (such as Coinbase, Gemini, or Kraken) that won’t take advantage of you is paramount to a positive investment experience.
Similarly, it’s a good idea to source your own digital wallet to store your crypto assets. While the aforementioned sites do provide wallet services for their users, their main focus is on market accessibility and ease of transaction, as opposed to cybersecurity. If they become hacked, you could lose your funds – so setting up an external wallet that is controlled by your unique user key is the ideal way to safeguard your interests. Blockchain wallet could be preferred if you’re just getting started.
Stay on top of market trends
Now that you’ve got your head around how cryptocurrencies work and you’ve set up the necessary infrastructure to buy and store your assets, it’s time to familiarise yourself with the market. That means reading up on the latest currencies to emerge alongside the fortunes of more established options since the sector’s volatile nature means that prices can plummet or skyrocket in the blink of an eye.
Take Bitcoin, for example. It reached an all-time high in price earlier this year, only for a tweet by Tesla boss Elon Musk to send it crashing back to earth. Whether it’s the public announcements of influential figures or the decrees and endorsements of national governments, what’s going on in the news can have a significant effect on crypto prices, so you must make sure you’re abreast of the latest developments at all times.
Investing in crypto can be an exciting and potentially lucrative money management method, but it requires some forethought before you dive in headfirst. Follow these tips to get the most out of your investments.