5 Beginner Tips for Investing in Crypto

Over the last few years, Bitcoin has taken the market by storm. It has created bitcoin millionaires in what seems a relatively short period of time. If you had purchased one bitcoin in 2012 for $13.50, it would now be worth over $20,000. There are plenty of other cryptocurrencies in the market so if you're thinking of investing in the crypto space, it has never been easier.

First, what is a cryptocurrency? Cryptocurrencies are digital currencies that work as a medium of exchange through a computer network. The main attraction to them is that they are not controlled by any authority. That means no banks or government is needed to uphold or maintain it.

Getting Started

Choose a cryptocurrency exchange

When starting out, you'll want to find an established and reputable exchange that specializes in buying, selling, and storing your crypto. Coinbase is a good option for beginners due to their user-friendly app and their strong support for cryptocurrencies. If you're looking for a beginner-friendly exchange but with low fees, Binance would be a good fit. In fact, they offer lower fees than many other U.S exchanges.

Choose a cryptocurrency

While Bitcoin has made a name for itself, it is not the only option. At the time of writing this, the price of one bitcoin is 43,910.20 USD, which makes it the most expensive cryptocurrency. Ethereum is the second most popular crypto and at the time of writing this, the price is 3,098.06 USD. Dogecoin is the next popular crypto. At the time of writing this, it is trading at 0.14 USD. In fact, Dogecoin was created under 2 hours and started as a joke, but with the help of celebrity endorsements like Elon Musk, the "meme coin" traded as high as .68 USD. There are plenty of others to choose from so feel free to do your research before selecting one.

Fund your account wisely

Crypto investing is very speculative due to large fluctuations in its valuations. For example, rumors that the U.S. government was planning to regulate digital assets triggered sell-offs which dropped bitcoin's value by 30% in one day. It should go without saying that you should only invest what you are willing to lose. It's wise to evaluate your comfort zone when hedging these risks because, unlike the money you put in the bank, cryptocurrencies are not FDIC insured. When funding your account, only add money that you are willing to lose.

Purchase cryptocurrency

Once you have funded your account, you are free to start purchasing your cryptocurrencies. Most exchanges show you the live trading price along with the ticker symbol, making it easy to find the ones you are searching for. You can also have the option to own a fractional share of crypto. This means that you don't have to pay thousands to own one bitcoin or Ethereum.

Store your cryptocurrencies

When it comes to storing your cryptocurrencies, you have a few options. If you are purchasing through an exchange, you can store them directly on the platform. Most exchanges offer crypto wallets where your crypto is stored. You also have the ability to store them in hot or cold wallets. Hot wallets are stored online and are always connected to the cryptocurrency network via the internet. With hot wallets, you can send, receive and view how much cryptocurrency you have available. Cold wallets, on the other hand, are not connected to the internet. They are typically viewed as a safer form of storage and have lesser risk of being compromised. These wallets can take a form of an external drive like a USB or hard drive. While cold wallets may carry lower risk, it would not matter if you forgot your password. If the cold wallet fails for some reason or breaks, the chances of you retrieving your crypto are very low.

All investment strategies and investments involve risk of loss. Nothing contained in this website should be construed as investment advice. All references to an investment's past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit.