In November 2021, Bitcoin had a historical price of $68,000. Before that, it had been the cryptocurrency to watch, and it still is today.
Maybe you’ve been sitting on the sidelines in the past, watching everyone else invest in crypto to make huge profits. Although Bitcoin’s dropped in value, it’s still worth your time, as are other cryptos. So it’s not too late.
But you need to do things right; otherwise, you can lose big.
If you want to start investing in cryptocurrency, you’re in the right place. Here’s a quick guide to cryptocurrency so you can invest wisely.
Don’t Spend More Than You Can Afford
Investing is never a sure thing, even if it seems like it. So never put in money you can’t afford to lose.
Too many people go into investing world thinking they’ll come out with stacks of money, which motivates them to drain their savings. But this can be devastating when you don’t see a return and have no money to pay the bills.
Before you jump in feet first, take a look at your finances. Determine how much you can realistically spend on crypto, and separate it from your everyday finances. That way, you won’t be tempted to dip into your much-needed savings.
Don’t spend it all at once either. Test the waters first, then invest more accordingly later. This can prevent you from making rash and costly decisions.
Check Out Your Options
Bitcoin isn’t your only choice, although it’s probably the best cryptocurrency to hedge your bets on. Take some time to explore other types of cryptocurrency, such as Ethereum and even Dogecoin.
Dig into the history of the cryptos and see how they’ve done. What are people saying about their trajectories, and is there a general interest in the currency?
Sometimes, if you’re lucky, you can get into a cryptocurrency for dirt cheap before it gains traction, so keep your ear to the ground. Reading online forums can help, especially since other investors can give you information and advice.
Pick a Cryptocurrency Exchange
You can’t just buy cryptocurrencies randomly; you’ll need to use an exchange, like in the following link. In terms of stocks, cryptocurrency exchanges are like brokers.
You’ll have many choices, but you should do your due diligence before picking one randomly. Some things to consider include:
- Number of cryptos you can trade
- Payment methods
- Insurance policy
- Customer service
Keep in mind that you don’t have to use only one exchange either. So if you find two you like, try out both and use them in conjunction with one another if necessary. Otherwise, you can pick the better of the two to stick with.
Get a Cryptocurrency Wallet
It’s vital that you have a cryptocurrency wallet. Otherwise, your coins will be floating on the internet, and they can easily be swiped by hackers.
There are two types of wallets: hot and cold.
Hot wallets are connected to the internet, which makes them less secure. However, they’re more convenient to use, especially if you’re planning on buying/selling multiple cryptos often.
Cold wallets aren’t connected to the internet, so your cryptos will be almost impossible to steal. But it’ll be a pain moving currencies, so it’s not fantastic for avid traders.
One of the best strategies you can utilize is to get both types of wallets. Many investors treat their cold wallets like savings accounts, and their hot wallets like checkings accounts. You can buy and sell with your hot wallet, then squirrel away your earnings in your cold one.
Spread Your Money Out
You know what they say: don’t put all your eggs in one basket. Many people mistakenly think a cryptocurrency will rain down money, so they go all in. However, if the crypto goes bust, you won’t have anything left.
A better idea is to get a list of interesting cryptos when you’re in the research phase. You can put most of your money in one, but you should spread out the rest across one to three others.
This way, if one cryptocurrency crashes, it won’t hurt as much. You have plenty of other chances to strike it rich with your other investments!
Don’t Invest as a Way to Make Income
Investing is always tough to nail, even if you’ve got years of experience. There’s so much uncertainty and volatility that today’s top crypto can crash tomorrow.
Don’t go into crypto investing thinking that you can quit your day job. Even after years of success, you never know if you’ll lose all your money instantly.
So think of crypto trading as something fun to do, and maybe as a way to get some extra cash. But never count on it to be your main source of income.
Start Investing in Cryptocurrency Today
If you want to start investing in cryptocurrency, then these tips should be more than enough for you to do so. The key things are to do your research, determine how much you can risk, and spread your money out. You should choose good crypto exchanges and wallets to use too.
Most importantly, don’t expect to get rich off of your investment. If you keep it as something fun to do and not as something to profit massively from, then you won’t have such huge expectations. And any money you make can be used for some special treats for yourself or your family.
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