"The future of money is digital currency." -Bill Gates
If Bill said it, it must be true; digital currency is on its way to conquering the financial world and changing the way we use money. As we make our way deeper into the digital age, paper money and government regulated currencies are on their way out the door. Should the changes to the way we use money sadden us? Not! Instead of being a stickler for how things used to be, it would be extremely wise to follow the trends of virtual currency to invest in their success and make some cash before the popularity of cryptocurrencies blows up and it's too expensive to invest. But, maybe you're asking yourself, how does one invest in cryptocurrency? Have no fear; Superprof is here to save the day and instruct all interested ones about safely investing in different cryptocurrencies. Let's get investing!
The Rise of Cryptocurrency
The Best Steps to Take to Invest in Cryptocurrency
- Decide the Amount You Want to Invest: if you've had experience playing around on the stock market or investing in other ventures, you probably know that you should decide upon a specific amount you wish to allocate to cryptocurrency investments. It is highly recommended to allocate a small account of your investment portfolio in cryptocurrency since it is volatile and doesn't offer dividends and interest like other stocks and resources. However, your decision of setting aside a specific amount of money for cryptocurrency investments depends solely on you.
- Pick a Cryptocurrency Platform: after you've run the numbers and decide how much of your portfolio you wish to set aside for crypto investments, the next step is selecting a platform that trades cryptocurrency. What is that? A cryptocurrency platform acts as a "wallet" for some and is essentially an app used to hold your currency. Coinbase and Wealthsimple have frequently used platforms that help you use real money/currency to buy cryptocurrencies such as Ethereum and Bitcoin. Other types of wallets include tangible things that look like USB sticks; however, having your cryptocurrencies on an exchange app is the most common.
- Choose Your Cryptocurrency of Choice: after your account or "wallet" has been set up, and you've transferred the desired amount from your portfolio onto the exchange app, the next thing you need to do is select the cryptocurrencies that you would like to invest in. There are thousands of cryptocurrency currently in circulation, making selecting a few to invest in quite difficult. Throughout the years, Bitcoin and Ether have proven to be the most reliable cryptocurrencies to invest in. However, we recommend that you do extensive research before investing in a new cryptocurrency since many new ones that were created in the past decade have disappeared over the years and lead investors to a profit of zero!
- Keep Your Cryptocurrency Safe: whether you choose to use your cryptocurrency gains for future investments or to make purchases at participating retailers, you must do your utmost to keep your cryptocurrencies secure. Take a look to ensure that all the movements of your cryptocurrency are secured and encrypted. Some use VPNs to guarantee that there will be no theft or scams when transferring their cryptocurrency.
- Sit Back and Enjoy the Show: since cryptocurrency is extremely volatile and unpredictable after you've invested some cash in a virtual platform, the next thing you can do is sit back and see what happens to your Bitcoin! Investors must remember that though cryptocurrencies have been going up rapidly, they can quickly plummet. If you haven't invested much and are unattached to the money you've allotted, as you should be, the experience can be quite thrilling to watch.
The previously mentioned tips, along with extensive reading and research on the topic, should prepare you for your first investments in cryptocurrencies. However, do not doubt to consult the expertise of a professional cryptocurrency investor that offers informative classes on Superprof! Find good cryptocurrency course here on Superprof.
Tips on How to Successfully Invest in Cryptocurrency
- Have a Diverse Portfolio: as is the case with most investments, the strategy of putting all your eggs, or cash, in one basket is flawed. A diverse cryptocurrency portfolio is more healthy and contributes to more equitable wealth. By doing effective research, you'll see that investing across different coins will draw in more profits.
- Use Another Email: since cryptocurrencies are virtual, they might threaten online theft and scams. Therefore, to keep things safe and secure at all times, it might be a good idea to create a mobile wallet and accounts on trading platforms with an alternative email that isn't your personal one. Creating a unique email account with two-factor authentication password security ensures security and makes you feel more comfortable investing.
- Hope for the Best, Plan for the Worst: when investing in cryptocurrency, you cannot ignore the fact that it is volatile and unpredictable; most platforms warn investors before putting their money in! So, it is essential to enter the cryptocurrency game with an open mind and realistic expectations that you can easily lose it all, although you could earn a lot of cash.
By heeding the previously mentioned tips whilst investing in cryptocurrency, you'll be more prepared to make a profit. In conclusion, like all investments, cryptocurrency is risky, but the chances of making a little extra cash should implore you to consider how it all works.
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