It is no news that Bitcoin was the first cryptocurrency to be introduced. When Bitcoin first came out in 2009, few people understood its importance, so few people invested in it. The people who invested were futurists and financial analysts who had an adept understanding of its potential.
Many years later, cryptocurrency has caught the attention of many people all over the world. Bitcoin remains at the forefront of the cryptocurrency market, but several thousand others are behind it. Many people tried to invest in cryptocurrency, but a lack of understanding of the whole concept has been a problem. Here, we examined some important steps to help beginners invest in cryptocurrencies and make the most of their investments.
The Best Ways to Start Investing In Valuable Digital Currencies
Generally, people think that to invest in cryptocurrency; they have to buy XRP, ETH, BTC, or any other coin. Buying these crypto tokens is not as simple as walking into a grocery store and paying for an item. There are certain steps that you need to follow to get quality returns on your investment, and the most important of them include:
Don’t invest all your earnings into digital currencies
Cryptocurrency investment is risky because digital currencies are highly volatile, and you cannot afford to put in all of your money. The market is volatile, and the activities of investors determine prices of Bitcoin, XRP, or Ethereum. Before you invest, you must have dealt with greed and fear. Do not be too worried about losing or too excited about gaining. Your crypto investment should make up only a small percentage of your investment portfolio.
Financial analysts advise that the percentage of your investment portfolio dedicated to cryptocurrency shouldn’t be more than 10%. You must understand that the return on investment for cryptocurrency is not like that of stocks. Making profits depends solely on the condition that the price of a currency increases after you have invested. This price is not controlled by any sovereign body but by the number of investors in the market.
Carefully choose a crypto token.
If you want to invest in cryptocurrency, you have to choose the coin or coins you want to place your bet on. There are over thirteen thousand cryptocurrencies in the cryptocurrency market now, and you can invest in any of them. However, finding the right currency is like a needle in a haystack. It would help if you researched every currency for its growth potential before investing.
When you have decided on the right coin after careful analysis, you can buy the token(s) that you settled for. You can buy XRP, ETH, BTC, or any other coin that you want from a cryptocurrency exchange platform or an agent. When buying from a crypto exchange platform, you have to pay attention to the security features available for the platform.
Store your crypto in a secure digital wallet
You don’t have to trade all your digital currencies for another. You can hold some in a secured digital wallet while studying the different activities that go on in the market.
What Are The Best Investment Strategies For Beginners?
The decision to invest in cryptocurrency is regarded as a high-risk one. As such, before you start investing, you need to have a strategy, a solid one. You will most likely lose all your investment and go bankrupt (or crypt-rupt) without a plan. Here are three popular strategies for beginners who want to invest in cryptocurrency.
Dollar Averaging Cost (DCA)
The DCA strategy has been proven to work if you can wait the time. The concept of this strategy is that you divide your investment into bits. Then, you will choose a time of the day to buy a currency.
Golden Cross/Death Cross
In this strategy, you will use two moving averages to determine the market’s direction. These moving averages are known as Divergence and Convergence.
The RSI divergence strategy is used to spot trend reversals before they occur. You can trade on these reversals, make more profit, and expand your crypto wallet.
How to Choose the Best Investment Strategy
Each of the strategies mentioned above is very effective. The best strategy varies from one investor to another. However, the best way to choose the best investment strategy is to practice them over time.
You can open different wallets to try each of these strategies. Figure out the one that works best for you and double down on it. You can also modify it to find better ways to make profits.
The cryptocurrency market is very volatile, and you need to be careful if you want to start investing and stay careful through your investment. Carry out proper research, read articles, watch videos, listen to interviews, and network with people in the industry. There is a lot to lose, or gain, in the cryptocurrency market. Invest small and invest smartly while you watch your crypto wallet grow over time.