Cryptocurrencies are very popular now. However, in 2008 when Satoshi launched Bitcoin, people considered it an interesting phenomenon. Fast forward more than a decade later, Bitcoin is the most popular cryptocurrency worldwide. At the time of writing, the price of Bitcoin was $56,939.06.
Today, Bitcoin is not the only cryptocurrency. As of November 2021, there are more than 10,000 cryptocurrencies in existence. While many of these cryptos have little or no trading volume, some enjoy massive popularity among investors.
Are you interested in cryptocurrency investing? Here is a beginner’s guide to investing in cryptocurrencies.
1. Decide How Much to Invest
It’s important to decide how much you want to invest. With the recent rise in the price of cryptocurrencies such as Bitcoin, Ethereum, and Doge, it can be challenging to make a rational decision. Remember, all investing is always ruled by fear and greed. No matter the potential of cryptocurrency, you should not invest more than 10% of your portfolio.
Cryptocurrencies are not investments like stocks and other securities. Basically, when you invest in cryptos, you’ll not be paid dividends or interest. A cryptocurrency is only a good investment, upon its price increasing significantly.
2. Choose Your Cryptocurrency Trading Platform
Despite the popularity of cryptocurrencies and blockchain security, there are significant risks. So, if you want to invest in cryptocurrencies, you should find a secure crypto exchange. Lucky for you, we researched on your behalf.
One of the most secure crypto exchanges is Coinbase. Launched in 2012, Coinbase is the world’s largest Bitcoin exchange. Backed by trusted investors, the safety of your cryptocurrencies is 100% guaranteed. As a beginner, you need to sign up for a free account on Coinbase. This takes less than 3 minutes.
Once you open an account with Coinbase, you also get a free crypto wallet. Besides that, Coinbase allows you to buy and sell popular cryptocurrencies and keep track of them in one place.
The platform enables you to invest in cryptos slowly. You can schedule your buys daily, weekly or monthly. Coinbase also has an app compatible with Android and iOS devices. As such, you can stay on top of the markets even on the go.
Other cryptocurrency exchanges you can trust include:
- eToro
- Crypto.com
- BlockFi
- Coinmama
- Binance and more
You can see other trustworthy crypto exchanges in SFGate’s article.
3. Choose Your Cryptocurrency
There are more than 10,000 cryptos in existence, and to complicate matters, more are coming online each day. As a beginner, you may lose money if you do not research cryptocurrencies. Right now, Bitcoin is the most dominant cryptocurrency.
It’s followed by Ethereum, Binance Coin, Tether, Solana, Cardano, XRP, and more. As a beginner, we recommend that you start investing in Bitcoin. It’s the most stable and reliable crypto on the market.
Basically, your cryptocurrency position should be in Bitcoin. Other cryptos should occupy a much smaller position in your portfolio.
To start investing, sign in to your Coinbase account, fund your account and start investing in Bitcoin and other cryptocurrencies. We recommend starting small. Watch for that volatility as the prices of cryptos drop quickly in seconds.
You also need to learn how to manage your risk. The crypto market is a minefield for beginners. As such, you need to understand how best to manage risk and mitigate losses. This process varies from investor to investor.
Final Thoughts
Keeping your cryptocurrencies secure after you buy them is very important. We recommend setting up a strong password for your crypto exchange account. Changing your password every week is also highly recommended. Finally, do not invest more than you can afford to lose.
If you have money set aside for a down payment for a house or a necessary purchase, keep it safe in your bank account. If you want a sure return, invest with money you can afford to lose.
Finally, keep learning. Stay abreast with the latest cryptocurrency prices and news. This is how you can take advantage of the market and profit.
