In the space of just 12 years, a single Bitcoin went from being practically worthless to topping $60,000 in value. Of course, that kind of return on investment is absolutely the exception rather than the rule, but that’s not to say that there isn’t significant potential profit to be made from investing in cryptocurrencies.
However, the cryptocurrency market is far more volatile than most stocks and shares, which means that savvy investors must tread carefully if they are to avoid losing out. That’s doubly true for those who are only just familiarising themselves with the sector now, since inexperience often leads to accident. If that sounds like you, don’t worry. Follow these simple steps and you’ll soon find yourself a dab hand at juggling a crypto portfolio.
Educate yourself
It should go without saying that any new investment should always be preceded by no small amount of research, so that you can get to grips with how the sector works and arm yourself with the knowledge necessary to distinguish sound investments from poor ones. With cryptocurrencies, that’s even more pertinent, since the market is still so new and subject to change.
For example, you can find all the crypto questions answered on this page, which can help you to understand how crypto works, the concerns behind it and the reasons why those are unfounded or exaggerated. Learning more about your chosen crypto will help to put your mind at ease and endow you with the confidence and acumen you need to make smart business decisions.
Source an authentic exchange
The next step to investing in cryptocurrencies is to find a reputable and responsible exchange platform. These entities work a little like investment brokers, pairing up buyers and sellers and making sure the transaction goes smoothly. They also normally dictate the rate of exchange and take a percentage of the sum being transferred.
While exchanges are a highly convenient tool for finding a seller for the commodity you wish to purchase, not all of them operate on principles of integrity and transparency. Fortunately, it’s fairly easy to find a reliable service provider, since established names like Coinbase or Gemini have been around for some time and have built up a reputation for trustworthiness. If in doubt, check the company’s credentials and read reviews of their services by existing users.
Buy and store your cryptocurrency of choice
After taking the time to learn everything you can about the cryptocurrency you favour and locating an exchange which offers it, it’s now time for the exciting part – the purchase. Analyse the past performance of the currency to determine whether you’re obtaining it at a peak, trough or somewhere in between, then strike once you’re sure the iron is hot.
Most exchanges will offer a digital wallet in which you can store your assets, though these could potentially be susceptible to cyber-attacks. It’s sensible to set up an external wallet which is only accessible through your own unique key, since that will maximise the security around your funds. Just don’t forget your login credentials or you may lose access to your money for good.
Do you want to take your first steps in the world of cryptocurrency investment? Just follow these three steps and you’ll be wheeling and dealing in no time at all.