Investing in cryptocurrency is a topic whose relevance is only growing every day. If you think you have already missed the right moment and it was necessary to invest in 2010, then this is not true. And today, millions of people earn daily on crypto — this opportunity is provided by the volatility of its exchange rate, as well as the ability to buy small BTC shares.
In this article, we will tell you how to invest in cryptocurrency for a beginner and consider a lot of useful tips to reduce risks during investing. Let’s get started!
Key Benefits of Investing in Cryptocurrency
There are many types of financial instruments that you can invest in — stocks, bonds, oil, fiat currencies, etc. Cryptocurrency has confidently entered this list in recent years. It is able to provide the highest level of profitability among all the listed instruments but is also associated with the highest level of risks. This type of investment attracts people who are interested in the technological field, believe that digital assets will eventually replace fiat, and also choose blockchain technologies for their privacy and decentralization.
The crypto market differs from the stock market by less liquidity and an increased volume of speculation. As a result, the growth or fall of the cryptocurrency rate can reach 10-30% per day, and this does not shock anyone. In addition, the cryptocurrency market is available around the clock and seven days a week, while the stock market operates exclusively on weekdays at certain hours.
Early bitcoin investors made millions of dollars if they had the patience and faith to wait for the coin to rise substantially in value. And sometimes, they didn’t have to wait long — for example, in April 2020, BTC cost $7,000, and a year later — $60,000. Of course, bitcoin also had price falls since cryptocurrency rates cannot be predicted in the short term. Therefore, you can only risk money that you can afford to lose.
What Cryptocurrency to Invest In?
How to invest money in cryptocurrency? Well, we do not give investment advice and do not recommend believing every word of experts campaigning to invest in a particular currency. Always study the information yourself and assess all possible risks.
Of course, bitcoin remains the main investment asset among cryptocurrencies. But besides it, there are tens of thousands of other coins with their own advantages, disadvantages, and prospects. Each of them can be bought in small shares, so it does not matter if the asset is too expensive.
Factors that a beginner should pay attention to when choosing a cryptocurrency for investment:
- Project value. For example, Ethereum grew rapidly because developers loved the ability to create their own decentralized applications. Thus, so far, Ethereum has consistently led the industry despite a large number of competitors.
- White paper. The project should have a main technical document, which details the prerequisites for creation, goals, benefits that the platform will bring to the world, as well as technical aspects of the activity.
- Team. The team’s authority is one of the signs that your money is in good hands. Many developers prefer to remain anonymous, and this is not a bad sign (at least, let’s take Bitcoin). Still, it is still desirable to know team members and go through their LinkedIn profiles.
- Open source code and its timely updating. Take a look at the cryptocurrency repository on Github and check the developers’ activity.
- Promises of fabulous profits. Any project where you are promised a guaranteed super profit is a scam and often a pyramid scheme.
All these factors will help to make sure that a certain coin has long-term prospects indicating its future growth. A short-term perspective is much more difficult to predict; it depends mainly on the project’s initial marketing.
How to invest in crypto? Well, if you are interested in coins with high potential, first look at the top 10 by market cap. If you are about to make quick and high profits, then you need to track tokens of new projects that can skyrocket. Still, this option is very risky and is hardly suitable for a beginner.
Top Cryptocurrency Investing Tips to Know
It is believed that the best time to buy a promising cryptocurrency is when it keeps at a consistently low price level for some time. It is unwise to buy a coin at the peak of its price since it will start to fall sooner or later. So, how to invest in cryptocurrency?
Here are some general recommendations for choosing the right moment to enter the market:
- Develop a strategy in advance and strictly follow it. Don’t get emotional by buying or selling intuitively. All transactions must be made only in accordance with the chosen strategy. We recommend reading about the fear and greed index, an indicator that clearly displays the influence of emotions on the market.
- Bubbles in the crypto market are not like bubbles in classical finance. As part of the volatility of cryptocurrencies, a 10% daily change is quite normal. A 100% rally could theoretically be a bubble but could also indicate the start of a rally. Growth by 1000% is almost always a bubble, but it is not certain that it will burst.
- Buy and sell only with full confidence at the entry point. After one failure, there can be another, just as after one growth spike, there can be another. It is better not to rush but to wait and study the market situation.
Of course, determining when a coin is at its peak and its lowest rate is also not always easy — even experts sometimes make mistakes. Thus, many investors did not want to buy BTC at $1000 or ETH at $100, thinking that these prices were too high.
What Is the Best Place to Buy Cryptocurrency?
If you’re wondering how to invest money in crypto and where to buy some crypto coins, you should definitely think about doing it at Switchere. On our platform, you have an opportunity to buy all leading cryptocurrencies in the fastest and most convenient ways using any available payment method.
Switchere is one of the most reliable online exchanges for buying cryptocurrencies. The company is a licensed provider of financial services, with guaranteed legal compliance and a secure infrastructure system for fast crypto exchange services at fair prices.
Switchere is characterized by the fastest order processing and instant delivery — in fact, you get your ordered amount of crypto within minutes after making a payment. Moreover, we offer some surprising bonuses! Users of our platform enjoy a 0% service fee for the first order.
You can now hear about cryptocurrency almost everywhere — in the media, on social networks, and from famous personalities. However, it is safe to say that digital assets are an extremely risky investment. Therefore, before investing in cryptocurrency as a beginner, you need to make sure that you know all the basics. We have outlined the main steps of how to invest in crypto. Hope that you’ve found them useful!
This information is provided for informational purposes only. Such information is not intended as and may not be relied upon as trading advice. Before deciding to trade cryptocurrencies, you should carefully consider your objectives, level of experience, and risk appetite. Please do your own research and due diligence on the services provided by online cryptocurrency trading platforms.