Planning to start investing in crypto? Follow the pro tips
Did you know all those who had invested at least $22 in BTC back in 2012 are millionaires today? Yes, what was $22 for BTC in 2012 has turned to a mammoth $1 million after 10 years. It’s common knowledge that if you buy and hold onto an asset for months and years, you are likely to be rewarded with a high ROI. But, crypto investment offers astronomical returns that could be exceptionally higher compared to other traditional assets. Blame it or champion it, the volatility aspect of crypto does all the magic here. Bottom line is- if you are open to experimentation- if you are adventurous enough to take risks- you can give serious thought to investing in crypto.
Are you planning to cryptocurrency investing for the first time? Well, much to your convenience, the post below shares a roster of expert tips that will help to attain a safe and successful experience, especially for beginners aspiring for investing in crypto. Read more about smart contracts explained for blockchain and cryptocurrency
- Comprehensive study
This is the fundamental tip for investing in any asset and especially for investing in crypto. Digital assets like cryptocurrency are niche assets- developed on cutting-edge technologies they command an exclusive market. A veteran crypto trader/investor too carries no more than 10 years of experience in crypto in trading or investing in crypto. Put simply, you need to carry out a comprehensive study on the crypto market in general. Later on, when you will choose coins for investing in crypto, you will need to gather information about the particular coin/coins as well.
Good thing is, you have several online courses today on investing in crypto, trading in crypto as well the concept of cryptocurrency and blockchain in general. Before you take the jump, make sure you have gathered considerable knowledge on crypto, how the industry works, the past trends, future predictions, and so on. You will need at least a 6-month-long research before officially signing up for investing in crypto. Read more
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- Choose the coin
The next step is about selecting a compatible coin for investing in crypto. Here is a list of main factors to consider while choosing a coin for investment.
- Rich fundamentals as a strong team and ambitious roadmap assures sustainable presence
- Solid range of growth
- Try to avoid coins that had encountered big drops in the past
- Promising future prediction
- Able to show slightly more stability compared to others
- Able to fulfil functional purpose
- Allows low entry point
As Bitcoin commands a high price, you might be discouraged about choosing BTC while investing in crypto. But, despite its high price, BTC is highly divisible as well- it means you do not necessarily need to buy 1 whole BTC. You can jolly well start investing in crypto by purchasing just a fraction of the coin, at say, $25 only.
You can, of course, choose highly potential altcoins as well.
- Diversification is advised
One of the simplest yet greatest bits of advice on investment that have stood the test of time is “diversification of investment assets”. The same rings true when you are planning for investing in crypto as well.
A diversified portfolio offers backup from other assets when one particular asset fails to perform.
When you are a beginner, of course, it’s not advised to put lump sum money in crypto since digital assets are extremely volatile. But, you can proceed with a diversification goal when you are aspiring to investing in crypto. So, for example, you can commence investing in crypto with one coin, say BTC or ETH. Then, after 6-7 months, when you have been able to acquire a grasp of the market, you can look for other promising coins. Stablecoins, given their comparatively lesser range of volatility, would be an ideal candidate when you plan to diversify while investing in crypto.
- How much to invest?
This is the most common question when it comes to investing in crypto, especially among beginners.
Well, the general advice is to stick to around 5% of total net worth, while investing in crypto. But, if you are a beginner, go no more than 2%. You are new to an incredibly volatile asset. You never know how your chosen coin might actually fare in the coming few months. You are yet to develop a certain kind of appetite for investing in crypto. So, for the first 6 months, the investment amount should not be over 2 percent of the overall net worth.
You might hear stories about veteran investors investing 20-30% in crypto. And all of these could be real stories. But, once again, you are new to the field. You don’t even know whether you would like to continue with crypto after a year or so. As of now, you are just out to test the waters. There is no need to lock up your money into something that you are not sure about yet.
So, stick to a moderately low amount while investing in crypto, especially when you are a beginner.
- When to invest?
Are you acquainted with the ins and outs of the traditional asset investment market? If so, what is the most popular time to buy or invest in a bond or stock? Well, smart investors generally purchase when the prices are low. The same rule applies when you are planning for investing in crypto as well.
In other words, when it comes to investing in crypto, the right time to start investing is when the prices are low. Veteran crypto investors vote for HODL- buy and hold the asset for a longer period to attain high rewards after a few years.
- Find the right crypto exchange
After you have chosen the coin/s and decided on the amount, you will have to find the right crypto exchange for investing in crypto. A crypto exchange is a platform where you will buy, hold, and trade your crypto assets.
Look for a highly reputed crypto exchange that allows investing in your preferred coins. The exchange must be backed by state-of-the-art security measures. Also, make sure your chosen crypto exchange carries a separate user dashboard for beginners.
- Investing in Bitcoin based on astrological indicators
Bitcoin is a new hotly debated issue in each and every nation, and each third individual has the magnetism of guessing and putting resources into any sort of cryptocurrency. There is an unmistakable disclosure in a horoscope connected with the Zodiac signs which demonstrates unexpected karma for overflow or money-related gains. In any case, precisely the way that great are you at setting aside cash, according to your Zodiac sign.