Since the surge in Bitcoin’s price in early May this year, the cryptocurrency party is in full swing. At the time of this writing, a single bitcoin is worth a massive $16,653.34 – slightly higher than its recorded value of $15,56.78 on December 8. Because of that, there is now growing interest from enterprising investors as it continues to soar high.
Investing in cryptocurrency can be very confusing because it has a different approach in buying shares not like in the stock market. When you buy cryptocurrencies, you are getting digital tokens/coins. And you expect increased adoption to translate to demand of your tokens to get a return of investment. In this post, I will discuss some tips on investing in cryptocurrencies. Where to buy them, store them, etc.
Tips on Investing Cryptocurrency
The best and safest way to get a return on investment in cryptocurrency is a long-term holding.
Diversify your portfolio. “Don’t put all your eggs in one basket” applies when investing in digital currencies. Make it simple, just invest in your top 7 or 8 coins and put a bigger amount of money in the safer coins such as Bitcoin or Ether.
Understand the coins before you invest. Make an effort to do your research and understand what this particular digital currency is before you want to put your hard earned money on it. Find out about the developers of the coin, their vision, the market cap, and if they have an online community. It’s important to know this basic stuff to avoid risks.
Don’t buy and sell based on emotions. It’s not a good idea to buy when the price is high and when it’s crashing. As the trader’s wisdom says, “Never catch a falling knife”. In my opinion, the best time might be when the price is stable at a relatively low level. Take some time to watch the market, never use your emotions. Don’t sell too early because the monetary revolution just started.
Fraud-proof. Transactions are stored in a public ledger. The identities of coin owners are encrypted to make sure the record keeping is legit.
Controlled Supply. No printing of money for cryptocurrencies. This finite supply of some cryptocurrency is similar to that of gold or silver – which is where the value is often seen.
Transaction Speed. You can send and receive money anywhere in the world and it’s super fast, unlike most payment gateways. It can arrive in just few minutes unlike for most banks, it could take almost 24-48 hours.
Low Fees. Unlike most payment centers, sending or receiving money can incur pretty heavy fees. With cryptocurrency transactions, it’s usually incredibly low or free of charge.
Ease of Use. Anybody can access it any time of the day just by using their smartphone or laptop. Unlike some traditional investment methods, they are very difficult to jump into. With the crypto investment, you can trade for 24 hours a day.
What crypto should you buy?
Here are some of the most popular options for investment:
1.) Bitcoin – You probably read on the financial news page that the price of this cryptocurrency has increased over 17K USD last December 6, 2017. Bitcoin or BTC is useful because it can be sent to anywhere else in the world. No financial instution can block your transaction or close your account. It provides an easy way for everyone to escape the failed government monetary policy.
2.) Ethereum – The 2nd most popular digital currency, backed by fortune 500 companies. It’s quickly proving to be the one of the most profitable investments of all time. Ethereum or ETH has grown by over 1,100%. As of the moment, it’s coin value is $482.1462.
3.) Bitcoin Cash – It’s a breakaway part from Bitcoin that’s essentially identical to Bitcoin. It was created because of “Bitcoin scalability limitation” Bitcoin Cash has a market cap of $21,898,987,947. 1 Bitcoin Cash of BCH is equivalent to $1,303 as of this writing.
4.) Ripple – Ripple is a real-time gross settlement system network by ripple and lies fourth in the list of top cryptocurrency to invest. The Ripple protocol was launched in 2012. Meanwhile, it has a market cap of $8,748,471,371. You can buy one unit at a price of around $0.2265.
5.) Dash – Originally known as Darkcoin. It’s kinda similar to Bitcoin software but has a more private version. It offers more anonymity as most transactions are almost untraceable. One unit of Dash is $786.42.
How to buy?
You should start buying Bitcoins directly in you want to avoid paying the high fees for investment products. You have a lot of options where to buy depends which continent you’re from. Let’s take a look at the list below:
It’s pretty simple to buy a Bitcoin. Just open up an account at the exchange of your choice then verify your identity. This is a requirement in most sites due to anti-money laundering policy. You can fund your account with your currency (whatever paper money you use) or you can trade directly with others.
It’s always better to use an exchange that is physically close to you because if something bad happens, you can get your money back legally. If there’s no exchange where you live, it’s always better to pick an exchange that is located in a stable country with a good legal system.
How to store cryptocurrency?
When storing cryptocurrencies, you don’t need anybody. Not a bank, not an exchange, not help from anyone else. All you need is a free and open software that you can access yourself. There are a lot of wallets for most famous cryptocurrency on every device such as mobile or laptop. This software can store, send, and receive coins.
Electrum is one the popular Bitcoin Wallets since 2011. It’s fast, secure and easy to use. Anyone can run an Electrum server, no single entity controls the network. It also supports hardware wallets such as: Ledger, Trezor, and Keepkey. These devices are smartcards or micro machines that generate keys and sign transactions.
You are the one who is responsible for the safety and security of your coins. If your mobile or computer gets a virus or malware, you could lose your coins. That’s why it’s important to make a backup. Don’t let the hackers steal your crypto investment. Always be smart.
Disclaimer: This is for educational purposes. Do not take this information as professional investment advice. Thank you.