Cryptocurrency investing is not for the faint of heart. If what you have to invest with is funds for basic needs like feeding, shelter, and clothing, you’d be better served by not investing at all.
Better it, it would be best if you invested in physical stocks and assets like land and agricultural produce. Either way, you need a crypto wallet to store your digital holdings.
Cryptocurrency is not like any other stock. It’s not a real-world asset, so you can see it or touch it. Although, as the Metaverse innovation gathers pace, it won’t be too long until we can finally “feel” and “experience” the utility of these tokens.
However, for now, crypto remains, by far and large, a very different kind of investment by far and large. Although you can trade it much like any other asset, its laws of returns are of a unique type. This makes it one of the wildest markets to invest in and certainly one of the most potentially profitable too!
For the wise and wary, the crypto investment represents a once-in-a-lifetime chance, an opportunity to earn through diligent and discerning strategies.
However, it is a huge pitfall for those unfortunate enough to be caught in the wrong choices- their capital will disappear with the barest whiff of market topsy-turvy, thousands of dollars lost, as it were.
In this article, you’ll learn all about crypto and key things to note before investing in it. First, let’s delve into the properties of cryptocurrency.
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Properties of cryptocurrency
Before you invest in crypto, here are some inherent qualities of crypto tokens that you should be aware of:
Cryptocurrency is the most cyber-secure form/means of financial payment you’ll find anywhere globally.
Your banknotes can be stolen. You may even lose your ATM pin to thieves and phishing scammers on the internet. Even worse, you can lose funds stored in a supposedly safe bank to a concerted system hack.
Cryptocurrencies offer a different level of security whose firewalls are not so easily circumvented. So, you can invest in it knowing that your assets are completely secure.
Just as well, there are even more layers to this security. For instance, you can’t double spend it. Fiat currency can be forged and spent illegally until discovery, often after a long time. With crypto, you can’t double.
There’s only a bit of a twist- you shouldn’t store your crypto funds on a decentralized exchange platform like Binance. It’s not ideal in the slightest. The best alternative to this is by storing your coins in a hardware wallet.
Cryptocurrency tokens are inherently volatile. Although the major tokens and altcoins have a predictable price movement range, recent market trends have shown that just anything can happen. Token value can swing wildly in a matter of days, let alone weeks and months.
If you’re hypertensive or can’t handle an extreme level of unpredictability, you’d better invest in something else. Even if you do, you should invest with extra funds that wouldn’t have you puffing in anxiety if you lose it all.
However, that is not to say that you are guaranteed to lose it all. Many investors have earned profits using time-honed techniques for trading, buying, and depositing in several different ways. You can earn, too, despite the market’s volatility.
You just have to be mindful of one other crypto property-
Digital assets with real-world utility
Being mindful of this is the key to unlocking the true potential of cryptocurrency. Your tokens aren’t just a means of digital payment. They also hold real-world utility.
The Metaverse is coming. So are other Web 3.0 products and innovations linked to or based on blockchain technology. And crypto is the digital asset that will power it all.
When you invest in crypto, you invest not only in its current market value or price but its potential to store innovative and digital value.
Now that we’ve discussed the primary properties of cryptocurrency let’s move further into investment proper.
Tips for investing in cryptocurrency
As earlier stated, crypto investments aren’t something you pour money into, regardless of how seemingly unlimited your funds are. In no particular order, here are some excellent tips to adhere to before you go ahead to invest in crypto.
There’s KYC involved
Once you begin doing transactions on the blockchain and trading properly, you’ll be afforded complete anonymity. However, as a first-timer looking to purchase their first tokens, you may have to complete a rigorous verification process.
Before you begin investing, you’ll first have to sign up with a broker to purchase crypto with fiat. To complete the registration process, you’ll have to come up with a valid means of identification. Verification may take as much as two to three weeks to complete.
The verification/registration is a one-time thing, though. Once it’s complete, you can begin trading securely.
Winning and losing
Losing, you say? Yes!
Winning and losing is a part of life, and cryptocurrency investing is no different. You win some, and you lose some. You can’t win all the time. It’s impossible! No matter how sound your strategies are, you will definitely lose some.
However, the trick is to win more than you lose. That’s the only way to make a considerable profit to make up for the initial outlay.
Diversify your portfolio
A diversified portfolio forever beats one that isn’t. If you put all of your money in a single crypto, don’t be surprised to turn up with massive losses whenever the notoriously volatile market gets bearish.
Even Bitcoin is not infallible. Recent market trends have seen the value of both Bitcoin and several altcoins drop by large margins, much to the dismay and even ruin of many investors.
Going into cryptocurrency, If you diversify your portfolio, you’ll be well-placed to weather the storm whenever it hits. Even better, you’ll be guaranteed to turn in profits consistently, no matter how little.
After purchasing your tokens, where would be the best place to store them?
Crypto exchange platforms have proven susceptible to malicious hacks in the past. Also, some exchanges, like Coinbase, have stayed relatively unscathed; many experts do not recommend storing crypto there. Rather, it’s safer to use a hardware wallet.
Even a software wallet is only a little safe. Since it’s online, you remain perpetually at risk of losing money to hackers. On the other hand, the risk is greatly reduced if it’s in a hardware crypto wallet.
Remember to calculate your profits
This is one of the most important things to note before investing in cryptocurrency. If you aren’t calculating your losses and profits from the very start, it’ll be difficult to ascertain exactly how much you’re earning or losing.
This can have a negative impact on your overall investment strategy. If you fail to plan ahead, you’re only setting the tone for disaster. But, if you’re meticulous with your record-keeping, noting key details, you’ll know the portfolio assets that are performing and those that aren’t
It’s important to note that crypto and its equivalent blockchain technology are very much in their early stages of evolution. In the future, the cryptos that will rule the ecosystems are the ones that carry intrinsic value.
However, the rules of investment will remain the same. Invest wisely!