Some of you might have been hearing and reading a lot about cryptocurrency, but have not really stepped foot into this industry yet. Perhaps it’s because you’re not confident on your knowledge about trading or investing in crypto. Like anything in life, one does not simply invest in anything without having thorough knowledge about the industry. But that doesn’t mean you get so anxious or afraid of losing that you are not able to make informed decisions and just back off from the whole idea.
That’s why today I want to write about how to invest in cryptocurrencies. Even if you have already started trading crypto, you’ll be able to pick up on and benefit from some of the tips I mention here.
Study the crypto space
The first step is to study the crypto space, and understand what cryptocurrency is, especially if you’re still getting familiar with the basic crypto-related terminologies. Learn about the different cryptocurrencies available, such as bitcoin, ethereum, litecoin and others. Read about blockchain technology. Take your time and spend a couple of months reading about blockchain and cryptocurrency, until you become an expert on the subject.
Deposit some fiat currency
Once you understand the industry, the underlying technology, and the different cryptocurrencies, you can open an account at any exchange rate. You can go to Kraken or Coinbase. Those two are simple and “easy” to prepare. Deposit some money, and remember to start small. Don’t start big. People think they will get rich by investing in crypto. Well, that’s not the case. Nobody can become a millionaire overnight doing anything. There is a process, a strategy; you have to know the risk, and there are so many variables for this. Thus the best thing is to start with little bit of money. Put about 500 dollars first and experience the volatility of this space. Volatility is crazy in the crypto space.
Get some crypto
Connect your bank account with Coinbase or Kraken, or whichever exchange you choose to use. Deposit 500 dollars of fiat currency, and get one of the two big crypto for now: bitcoin or ethereum. It is safer to invest in bitcoin and ethereum than in any other crypto to begin with. With 500 dollars, you may want to invest $250 in bitcoin and $250 in ethereum.
Join crypto communities
The next thing you want to do is continue researching and educating yourself about the other cryptocurrencies. There are millions of them out there. I will not name them here and leave you to do your own research and due diligence. Find out why different cryptocurrencies exist in the first place, find out the equipment behind each, what problems they solved, and why you should put money in it. Like any other market, cryptocurrency also has speculators. There are variables, teams and different individuals or institutions manipulating the prices. So the next thing to do is talk to people who are involved in the crypto space. Send them an email or talk to the team, and decipher what happens internally. Join Facebook groups and Youtube channels that discuss and report about crypto. You must join the community and see what those individuals are doing.
Move your assets
Let’s say now you notice that bitcoin went up a bit and ethereum went down a bit. It’s time to reallocate your assets. Review your possessions every week or month and move them around a little, based on your market observations. These may sound like little baby steps, but these little steps will gradually grow to be huge steps. Maybe you go from $500 to $1,000 the next year, then to 25,000 and eventually to $100,000.
Don’t get greedy
There are people who lose millions in the cryptocurrency space out of greed. Greed is very dangerous to apply in this kind of markets. You definitely don’t want to be greedy. You want to be smart, have risk aversion, and minimize risk as much as possible.
Remember that for most people, crypto trading is not like daily business. It’s more like a long-term investment. Hope the simple steps mentioned above will help you to start trading cryptocurrency, if you are interested in this industry and plan to step foot in it soon.