At the start of the year, Bitcoin’s price surpassed its previous all-time high and is now at US$34,000. This event positively impacted the entire crypto community as more users looked into altcoins for more investment options.
Many experts believe that there will be a growing demand for cryptocurrency and its price will continue to increase within the year. With the undeniable potential of cryptocurrency, it’s obvious that there’s no perfect time to invest than now.
Get to more about cryptocurrency first before delving into the world of digital investments.
What is cryptocurrency?
Even though cryptocurrency is just now on its way to mainstream finance, it began way back in the 1980s when American cryptographer David Chaum created a blinding algorithm that is now known as the basis of web-based encryption.
The first decentralized cryptocurrency emerged in 2008 when a pseudonymous creator or group of developers named Satoshi Nakamoto published a white-paper entitled ‘Bitcoin: A Peer-to-Peer Electronic Cash System’.
Since then, numerous cryptocurrencies have been developed with crypto exchanges emerging to provide a wide range of services in crypto trading and other transactions. Today, cryptocurrency is used as a digital or virtual electronic cash payment system. It is mainly used and traded over the internet outside banking and governmental institutions.
Additionally, most cryptocurrencies are decentralized networks built on blockchains—an open-source ledger where transaction data are stored. Transactions are grouped into blocks, which are then validated and uploaded to the blockchain. Once data is stored in the blockchain, they cannot be altered, making fraud and tampering impossible.
How to invest in cryptocurrency?
As cryptocurrency became widespread, more people started looking into investment opportunities in it. To do that, you have to find a place where you can buy and store cryptocurrency. One of the best places to purchase cryptocurrencies is on cryptocurrency exchange sites.
These exchanges are platforms that allow you to buy and sell cryptocurrency in exchange for another cryptocurrency or fiat currency. There’s a wide selection of crypto exchanges you can choose from. Here are some of the most known exchanges:
Founded in 2012, Coinbase is one of the most popular and trusted crypto exchanges in the world. It offers exchanging, buying, and selling of Bitcoin, Ethereum, Litecoin, and other cryptocurrencies.
Binance is another type of crypto exchange that supports trading of more than 45 cryptocurrencies. It also provides its users with a crypto wallet where they can store their tokens. Many crypto users prefer Binance because of its low transaction fees and high liquidity.
Gemini was founded in 2014. It’s a crypto exchange that can be accessed through your web browser and mobile application. It accepts a wide range of cryptocurrencies and fiat currency.
Developed in 2013, Coinmama is an exchange that’s based in Israel. You can buy and sell cryptocurrency on this platform using your credit card, debit card, or bank transfer.
How to store your cryptocurrency
Once you know which crypto exchange to use, it’s time to figure out what type of wallet to for your crypto tokens. There are different types of crypto wallets to choose from and each one has features that are beneficial for the users.
Here are the following wallets you can use:
This is also known as a cold wallet where you can store your cryptocurrencies. It can be in the form of a USB flash drive that can be connected to the desktop computer. This wallet allows you to store your tokens offline.
A software wallet is also known as a hot wallet that you can access online. To use a hot wallet, you’ll need to create an account. Software wallets allow you to log into your account in any device as long as you have an internet connection.
A paper wallet is a type of crypto wallet where the keys and QR codes are printed on a piece of paper. You’ll also find wallets that allow its users to download the code to create new addresses offline.
This type of wallet can be installed on your desktop computer. Due to the risk of viruses, an antivirus is recommended before using this wallet for extra precaution.
Similar to a desktop wallet, this is a type of wallet that can be installed on your mobile phone. This wallet is convenient especially when you are on the go because it’s already on your phone.
Cryptocurrency investment options
Once you’ve purchased a token from an exchange site, it’s time to decide what kind of crypto investment you can do. Here are the two cryptocurrency investment options you can choose from:
If you’re aiming for a short term investment, then Day Trading is the best option. This involves keeping your tokens for a short period of time—spanning from just a few minutes or by the end of the day.
This investment option is ideal for those who have knowledge of how the market works. Begin day trading by purchasing cryptocurrencies on an exchange site.
Here are the different techniques in Day Trading:
- Scalping – This involves earning profits from small changes in prices.
- Range Trading – This involves checking the support and resistance levels of the price ranges of cryptocurrency before deciding on trading the tokens.
- High-frequency trading – This uses algorithms and bots to create plenty of trades in a short period of time.
HODLing pertains to the act of investing in cryptocurrency for a long time. This investment option means ‘Hold On for Dear Life’ which refers to investors who hold on to their coin regardless of the cryptocurrency’s price.
When HODLing, investors purchase cryptocurrency while the price is still low and once the price increases, they will sell the tokens.
Choose your cryptocurrency and invest today!
Now that you know how to invest in cryptocurrency, it’s time to purchase your tokens and decide how you want to invest them. Discover your skills in cryptocurrency investment and find out how much you can earn!