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Grow your digital assets with these crypto investment tips!

Cryptocurrency is one of the most exciting inventions in the 21st century. With its seamless, cost-effective, and efficient nature, it can be said that it’s the solution to man’s never-ending issues with traditional banking systems.

Now that digital assets are gaining traction and attention in the community, a lot of people are attracted to venture in the crypto sphere. So, if you’re one of the people who are interested in dipping your hand in the digital realm of investments, here are a few tips to help you get started!

Crypto Investment 101: What is cryptocurrency investment?

Just like with regular investments, putting money into cryptocurrencies should be planned carefully. After all, buying them isn’t cheap. While they are different from traditional investment options such as bonds, stocks, and fiat, one wrong move and you can end up losing your precious funds.

That being said, if you grow your investment well, you can reap rewarding benefits from your crypto. Here are a few tips to get started with crypto investments:

Look for the perfect coin

There are a lot of digital assets available in the market. However, not all of them will make the cut. Before getting started in crypto investments, look for a coin that you will invest in the long run. You can read blogs, news, or ask tips from experts.

Check if your purpose is aligned with the coin’s utility and functionality. Don’t opt for cryptocurrency just because it’s famous or has a good endorsement from a popular person.

Read the whitepaper

Once you’ve found the perfect coin for you, it’s time to do your research and get to know the crypto you want to invest in. When learning what is cryptocurrency, one of the things you can do to expand your knowledge on a certain coin’s function and framework is by reading the whitepaper.

It may seem a little boring at first, but the whitepaper contains all the information you need to know about a certain digital asset. You can learn about its utility, strengths, and limitations by reading the whitepaper. Additionally, it also indicates if a coin is worth investing in or not. If the asset you chose has a poorly executed whitepaper, then it tells you a lot of what you can expect from that cryptocurrency.

Check the coin’s functionality and use

When choosing a crypto to invest in, you should also consider the services it can bring to the market. It’s not enough that cryptocurrencies can be used for payments. They should also be able to deliver something useful to the market.

One example of a crypto that surpasses expectations is Ethereum. Introduced in 2015, Vitalik Buterin’s brainchild is not only used for payments, but it can also be used by developers from all over the world to create Decentralized Applications (dApps) on the Ethereum blockchain.

Cryptocurrencies are invented to improve privacy, scalability, and eliminate the presence of middlemen. When choosing a crypto, make sure that it ticks all the boxes to ensure that you can use it to its fullest potential.

Keep track of the market capitalization

Market capitalization is an important factor to consider when choosing a cryptocurrency. It shows the popularity and strength of cryptos in the market.

More often than not, this is the most popular metric used when checking out a digital asset’s current and future performance. Currently, Bitcoin has the highest market capitalization in the world while Ethereum comes as second.

Here is the formula used to calculate the market capitalization:

Market Cap = Price (X times) Circulating Supply

While market caps are relevant metrics to mull about, it won’t hurt to consider other features that cryptos have.

Use a reliable exchange site

Delving into cryptocurrencies means that you need to look for a reliable exchange site. Check if they offer different altcoins and fiat currencies. If you want to trade and sell, exchange sites are the place to do it. Some of the places you can try are Kraken, Coinbase, Coinmama, and Binance.

There are three different types of exchanges in the market. There centralized, decentralised, and hybrid exchanges.

Depending on your preference, you select which exchange suits your needs. If you want a site that doesn’t rely on a company or service, you should opt for decentralised exchanges. Meanwhile, if you want to do your crypto trading with high liquidity and regulation, you should opt for centralized exchanges.

However, if you want the best of both worlds, you can opt for hybrid exchanges. These sites use smart contracts to execute their services.

Decide if you want to short or long term investing

Before venturing into crypto investments, you have to first determine if you want to do short or long term investment. Whichever time frame you choose, knowing what investment road you want to take can help you make informed decisions. Read about basic crypto investment 101 tips to help you get started!

Manage your expectations

Cryptocurrencies are volatile in nature. Unlike fiat and other investments, their value can dip and rise at a drop of a hat. Before buying cryptocurrencies, start with small amounts then work your way up. Doing this can help you track the market and save you from unexpected losses.

Choose your wallet

A wallet is one of the most important factors you need to consider when investing in crypto. Think of it this way: your crypto wallet is the counterpart of banks. This where you will manage your virtual coins. Additionally, it also enables you to purchase, pay bills, and send cryptos in different wallets. A crypto wallet falls into two different categories: hot and cold.

Contrary to popular belief, a crypto wallet doesn’t necessarily ‘store’ your assets. Instead, it’s powered by a technology that connects you to the blockchain. In short, these ‘wallets’ are just gateways that transfer information from one wallet to another through the use of private keys.

A hot wallet is something that you can connect to the internet and download on your gadget. If you’re planning to invest in big amounts of cryptos, don’t opt for this wallet. It’s only good if you want to instantly access your funds for payments and purchasing.

Meanwhile, cold wallets come in the form of a USb that you can plug on your laptop or phone. People who have huge crypto funds opt for cold wallets because it offers unparalleled protection. Since it’s not connected to the internet 24/7, it’s not prone to cyber-attacks and fraud.

Getting started in digital assets can be a bit tricky, but doing your homework and learning about what is cryptocurrency investment can help you grow your funds. If you want to read more crypto investment 101 tips, read articles at CryptoShimbun.

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