Investing in Cryptocurrencies: The Beginner’s Guide

Do you know about cryptocurrencies as much as you know about space, but you’d like to learn more and even make money with it? Here are some tips you might find useful before investing in this digital asset. We tell you about potential dangers, how to choose an asset and most importantly how to start.

1. Is it worth investing in cryptocurrencies?

Today, cryptocurrencies are considered to be one of the best investment instruments. Why is this so?

1. Growth in value. Most currencies are rapidly becoming cheaper, and in search of ways to hedge their capital, many investors are turning to cryptocurrencies.
2. Technologies. Cryptocurrencies are based on stunning solutions, which allow the use of currency anywhere in the world, unless, the government has decided to ban it.
3. Growth history. Since the creation of bitcoin, investors have benefited greatly from the growth of its price. Thus, investing in assets related to cryptocurrencies gives an opportunity to improve the financial situation.

2. Potential risks

Before investing, it is recommended to check the following risks:

1. Could it be a bubble? According to some experts, cryptocurrencies are nothing but a bubble. For example, JP Morgan CEO James Dimon shares this opinion, since cryptocoins are not backed up by anything and are highly volatile.
2. Volatility. With strong price hikes, an investor who has already earned a lot of money can lose them overnight. As an illustration, check the cost of bitcoin over the past three months.
3. Legal risks. Cryptocurrencies are not globally recognized, that is, one can face the fact that in some countries it is impossible to create a cryptocurrency wallet or pay in a store. In addition, if you earn money in the cryptocurrency, you may have problems when declaring taxes, because in most countries, governments have not yet developed appropriate regulations.

3. Choosing cryptocurrency to invest in

This is a tricky one, since many factors need to be taken into account. Let’s consider the most important ones:

1. Recognition. Before investing, find out which countries recognize the cryptocurrency you chose and if it is accepted as a legitimate medium of exchange.
2. Portability. Digital money should be easy to move without any problems.
3. Safety. This is an important aspect of all legal currencies whether it is a US Dollar or Chinese Yuan, which means that a good digital currency should also be secure.

In the last few years we witnessed creations of many digital currencies, and each of them promised to grow faster than others. Here are the most common ones:

There are more cryptocurrencies, not included in this list.

4. To start your investment…

1. Choose the cryptocurrency you want to invest in.
2. Keep some funds for the investment. Any investment requires planning, so you need to decide how much you would like to invest in crypto assets and how often – weekly or monthly. Set aside the amount for this purpose and wait for a good opportunity.
3. Create a wallet. The address of such a wallet allows you to request and receive the purchased coins. There are different kinds of wallets – each for its own cryptocurrency.
4. Register on the exchange. Trading takes place on stock exchanges, and there are a lot of them: Coinbase, HitBTC, Bitfinex, Bittrex, BitstamP, etc.
5. Buy the chosen cryptocurrency. If you do not know how to do this, contact the support team of the exchange you registered at and they will be happy to help you.
6. Transfer your coins to an offline storage. Autonomous storage allows you to save funds from hacking.

Keep in mind that investing in cryptocurrencies is always risky, so it’s better if you thoroughly research before making a decision.

CoinTelegraph

Источник: ru.ihodl.com