Have you heard about the abnormal ROI from cryptocurrency investments or are you excited about blockchain technology, thinking that it can change the world as we know it? If so, you might be standing ready to invest, but have no clue how to get started.
In this quick and simple blog post, I’ll show you the basics of investing in cryptocurrency and help you own your first piece of the digital money revolution.
Risk vs Reward
One thing to remember before you invest into cryptocurrency and possibly any new emerging market, is that there are high risks involved. No risk, no reward is a common saying.
Be sure not to follow each and every article you read online as personal investment advice (including this article) and rather see it as education. It’s also a wise move to only invest what you are comfortable losing, or least use money you won’t need right away.
Although in the past people have become millionaires almost over night with crypto, you should have realistic expectations while still being hopeful. Market cycles change and many investors will tell you right now that we are in a bear market.
So don’t expect your investment to 10x or even 100x in the next two weeks. With crypto you never really know what can happen and although the future outlook is very positive (we’re all hoping for those 100x returns) it’s best to have a long term view.
Now that my general advice is out of the way and you have somewhat of a foundation for investing, it’s time to get into purchasing your first crypto. As with traditional money, you need somewhere to store/access your digital assets which comes in the form of a cryptocurrency wallet.
Many different options exist, but since this is a beginner’s guide, I recommend using your exchange wallet for the meantime (not long term, just while you get the hang of investing).
Exchanges are platforms where you can buy and sell cryptocurrency also known as trading. It’s actually very simple. Register an account with an exchange that accepts your country of residence, upload money to that exchange via means available to you (EFT, credit card, wires) and purchase your crypto.
Some of the most popular exchanges and probably the easiest ones to get started with include Binance, Coinbase, Bittrex, Kucoin. It’s even possible to buy Bitcoin directly from bitcoin.com with a credit card if you don’t want to go through the process of registering an account with an exchange.
You really only need one exchange account to get started. As you progress in your investing and want to diversify into different coins, you might need to register more exchange accounts as not all exchanges list the same coins.
Bitcoin, Ethereum, Litecoin
At the most basic level, you need to trade your country’s main currency for either one of the top cryptocurrencies available which normally includes Bitcoin, Ethereum or Litecoin. If you are using USD to purchase crypto, you’ll see BTC/USD trading pairs as an example.
For alt coins, especially the ones that do not have as big a market cap as the top 10 cryptocurrencies, you’ll further need to trade your BTC, LTC, or ETC for them.
Buying Bitcoin is probably one of the easiest ways to get your feet wet with cryptocurrency investing.
Investing in ICOs
Investing in ICOs also known as initial coin offerings can yield great returns, but are also very speculative and risky. I’m not trying to give ICOs a bad name, you should definitely consider investing a small percentage of your portfolio in them, but not right off the bat.
Finding a good ICO to invest in can be challenging, takes a lot of time and research as well as experience. If you are brand new at investing in crypto, it’s best to educate yourself on the market before you dive into ICOs.
Alternatively, you can leverage experience of other investors when trying to invest in initial coin offerings. However, it remains a process only more experienced investors should undertake.
Read more about finding the best ICOs to invest in at the Crypto Coin Authority.
As you can see, we barely touched the surface with regards to cryptocurrency investing. There is so much to learn and since the technology is still adapting and constantly changing, you’ll need to make a commitment to continuously educate yourself, especially if you want to succeed at investing.
Also, a very simple way to add more tokens to your crypto holdings, is to participate in airdrops. You can follow along and take part in this airdrop challenge from the Crypto Coin Authority Blog.
Find out more from their website here: http://www.thecryptocoinauthority.com
I hope you enjoyed this brief introduction to cryptocurrency investing. This world is very exciting and changes so rapidly that there is tons of opportunity for learning, profit and even fun!
Enjoy the journey!