When Bitcoin first came out in 2009 there werenít a lot of people paying attention to it. Most people had no idea what Bitcoin was let alone what the future of cryptocurrency would be. That has changed. Today the cryptocurrency market is worth over $2 trillion and the trading volume on exchanges runs between $100 billion and $200 billion on a daily basis. There are now a number of cryptocurrencies that are fairly widely accepted including Bitcoin, Litecoin, Ethereum and others. Many online businesses accept cryptocurrency and it can even be used for gambling as in this bitcasino.io review. However cryptocurrency appears to have generated the most interest with investors. For those interesting in investing in cryptocurrency here are 10 tips to get you started:
- Research: It is not a good idea to invest in anything if you know nothing about it. Do some research and learn about cryptocurrency as well as the basics of how to make a trade. Going in blind just because you heard a lot of people are making money on crypto would be a mistake. Donít just educate yourself on cryptocurrencies in general. Delve into the aspects of the specific coins you are interested in. With the internet it wonít take a big amount of effort on your part to learn what you need to know.
- Diversify your cryptocurrency investments: The old adage ďDonít put all of your eggs in one basketĒ applies to many investments including cryptocurrency. There are plenty of options out there so spread your money around and invest in several different coins. For that matter, donít risk everything on cryptocurrency. Have some other types of investments in your portfolio as well.
- Be prepared mentally: The cryptocurrency market is volatile and you will probably see some big positive and negative swings in your investment. If you are the type of person who panics or starts feeling ill when you see a big drop in your investment in a short time, then cryptocurrency may not be right for you. Keep your head and make logical decisions rather than reacting emotionally.
- Learn the options for storing crypto currency: Once you have purchased cryptocurrency it has to be kept somewhere. Cryptocurrency is stored in crypto-wallets but there are several different types. ďColdĒ wallets enable you to store your cryptocurrency offline and are the safest option. However, they are inconvenient if you intend to do much trading. You can store your crypto on an exchange but then the exchange is the one holding your keys. Another option is to install a crypto-wallet on your computer or mobile phone. This is more convenient but less secure than cold wallets. There are plenty of wallet options available. Do some checking and see which one is the best for your situation.
- Choose a good exchange: Generally when you are buying or selling cryptocurrency you will be doing it on a platform dedicated to that purpose. There are hundreds of online exchanges where you can purchase and trade cryptocurrency but they are not all the same by any means. The fees from exchange to exchange will vary. Also, not every exchange will handle every cryptocurrency. You will have to find one that deals in those cryptocurrencies you are interested in. In addition, payment options can vary. Some may only accept U.S dollars or Euros while others might accept a dozen or more different fiat currencies. Check the reputation of the exchange and if they offer what you need.
- Separate email for trading: How many times have you heard of emails getting hacked? Consider a separate email account that you only use for trading. Even better, get an email address with two-factor authentication password security for added safety. Make sure your username and password are unique and donít include any personal information that a potential hacker can trace back to you.
- Beware of scams: Unfortunately the cryptocurrency market is rife with scammers looking to make money off of eager investors and the uninformed. Donít just jump on any offering for fear of missing out on an opportunity. Always, always do your research. If you canít locate the information, or are being told there is no time and you have to get in before itís too late then you should be wary. Better to be cautious than bankrupt.
- Start small: Donít be in a rush to get all your money invested. Go in small initially. Even experienced investors tend to go into a new crypto with a smaller investment although small is relative depending on what you have to work with initially. As a new cryptocurrency investor, take some time to familiarize yourself with the process. Try out some different strategies and see what works best for you without putting a large portion of your capital at risk. You might lose out on some potentially bigger returns but you will also avoid some major losses.†
- Have profit and loss targets: To avoid taking a major hit establish a clear stop loss level. This is the price that you are willing to sell your coin at if it drops that low in order to limit losses. Some people prefer to set the stop loss level at the price they paid for the coin. They might lose any gains but they will get their original investment back. Others may be willing to accept a 5 or 10 percent loss on their investment. Either way, the idea is to have a preset point to get out at. At the same time decide on a preset profit level. It is better to walk away with a sure profit than wait too long and end up losing any gains.
- †Donít invest more than you can afford to lose: This seems like common sense but it is surprising how many people get in over their heads. Be aware of the potential losses and donít risk more than you can afford.
Take your time and use these 10 tips to ease into the cryptocurrency market.
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