A 5-step guide to help you start investing in Cryptocurrency 

Despite it being around for the last 15 years, most of us don’t know a lot about the world of Cryptocurrency. Then, when we try to educate ourselves so that we can start investing, it’s impossible to find clear and simple advice on the subject. You don’t have to worry about that anymore, because we have put together this guide to help you. 

Cryptocurrency isn’t as complicated as it first seems, there are many companies that have put together trading platforms that make the whole thing so easy you can do it from your phone. The only difficult elements of trading Cryptocurrency are making sure that you do it safely and picking out the right coin. 

Let’s start by looking at what Cryptocurrency actually is. 

What is Cryptocurrency? 

Cryptocurrency is a digital asset that can be bought and traded. Cryptocurrency is stored in a blockchain that spreads the asset out over multiple computers – this means that the asset is kept out of any governmental jurisdiction. 

Cryptocurrency differs from traditional currency as it is not disrupted by a government, instead, it is created. Anyone can make their own cryptocurrency. Like stocks, the cryptocurrency gains value by being sold and bought by traders. So people claim that the original cryptocurrency was created in order to give ordinary people access to an investment opportunity like stocks. 

Cryptocurrency does not physically exist. Instead, it is stored in code and can only be accessed by the owner. One of the major benefits of Cryptocurrency is that it is nearly impossible to counterfeit. 

It has also been said that Cryptocurrency cannot be manipulated by governments, but we have seen in the last year that people with enough influence can dramatically change the value of Cryptocurrency. 

How is Cryptocurrency regulated? 

We mentioned in the section above that Cryptocurrency is stored in a way that prevents it from falling under the jurisdiction of a single government. So, this essentially means that Cryptocurrency is unregulated. 

While for some people this can be a huge benefit, for the average citizen it means that you have no legal protection if your Cryptocurrency is stolen or you are scammed. 

There are, however, many trading platforms and cryptowallets that will offer insurance when you purchase or store Cryptocurrency with them.  

Step 1 – Choose your type of Cryptocurrency 

The first step of getting into Cryptocurrency trading is to choose a type of Cryptocurrency to invest in. 

We actually recommend that you invest small amounts of money into multiple Cryptocurrencies. A more diverse portfolio means that you are less likely to lose all your money if one of the coins tanks. 

There are many different ways that you can choose which Cryptocurrency to invest in. Many people are tempted just to invest in a coin that they like the name of (like many people did with Shib coin) or by investing in what is popular or currently on the rise. 

While investing a little bit in some of the biggest and more stable coins – like Bitcoin, Dogecoin, and Ethereum. If you want to see bigger returns, you should consider investing in some new coins as well. 

If you see an influencer or public figure promoting a coin then you should avoid it. These tend to be scams called “pump and dumps”. Someone will own a lot of the coin, they will advertise it so others buy it and push the price up. They will then sell their large share of the coin which will cause the coin to crash- they will make a profit at the expense of the others who bought the now worthless Cryptocurrency. 

Step 2 – Choose where to invest 

Your next step is to find a trading platform that you would like to use to buy your Cryptocurrency. You may want to read Step 4 (Find a Cryptowallet) as well before choosing a trading platform, as many trading platforms offer an inbuilt cryptowallet. 

The trading platform that you choose will allow you to sell and buy Cryptocurrency whenever you like. Many come with phone apps that will allow you to manage your accounts on the go. 

Your choice of the trading platform will be important. Due to the fact that Cryptocurrency is not regulated, trading platforms can sell the coins at whatever price they like. If you sign up with an accredited site then you can make sure you are not getting scammed or overcharged.  

A website like BitcoinIRACompanies will help you to find the best option when it comes to investing in a coin like Bitcoin. 

Step 3 – Chose much to invest 

Now, you will want to consider how much money you want to invest in Cryptocurrency. It is important to remember that just like stocks, buying Cryptocurrency doesn’t guarantee you a profit. It is a risk. But risk sometimes comes with a reward. 

We recommend that you never borrow money to invest in Cryptocurrency, as you will not be able to guarantee you will make enough money to pay back the loan. Instead, we recommend only investing what you can afford to lose. 

You may find that investing a little bit every month works best for you. You don’t have to pay out a large amount of money in advance and you can invest after paying out all your bills (without worrying about spending too much). 

Once you have chosen how much money you want to invest, you will need to work out how you are going to split the money across the multiple types of Cryptocurrency that you are going to invest in. 

Do not put all your money into one coin. Do try to buy when the coin prices are low, this will increase your chance of being able to make a profit on the Cryptocurrency. 

Step 4 – Find a Cryptowallet 

As we mentioned in Step 2, some trading platforms will offer you a free Cryptowallet to keep your Cryptocurrency in. 

Cryptowallets are not physical wallets, instead, they are a private space on a server that is digitally protected. If you know a lot about coding then you could create your own. However, we do recommend paying for one as they usually come with insurance against theft. 

A Cryptowallet is designed to only be accessed by you and you should never share any of its details with someone else. 

Once you have bought your Cryptocurrency, you can transfer it over to your Cryptowallet. 

Step 5 – Keep an eye on the market 

Now that you have chosen your Cryptocurrency, bought it, and stored it safely in a Cryptowallet – it is time to keep an eye on the market. 

You will want to watch the performance of all the coins you have invested in. The coins’ values will fluctuate from day to day, so try to keep an eye on the overall performance trends rather than the daily or hourly values. 

We recommend only checking your balances and the values of your coins once a day at maximum – even less if possible. You don’t want to get too caught up or stressed out by watching your investments going up and down. 

Instead, you can follow Cryptocurrency news outlets that will give you a good idea of the long-term trends. This will help you to know when to sell and when to buy more. 

It will be up to you when is the best time to sell your coins, you may want to hold onto them for a few days, a few months, or a few years. 

Photo by Bermix Studio on Unsplash

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