You’ve probably heard of cryptocurrency by now, and you may have heard about people getting rich by investing in it. There are plenty of people out there that are giving up on traditional investments like stocks and shares and opting to put their money into crypto instead. Many people use them to diversify their portfolio too.
If you think that crypto investing might be right for you, it’s important to be aware that it is not the same as other investments. There are distinct challenges to overcome and if you don’t take time to do your research, you could lose a lot of money. This quick guide will help you get started and help you avoid any big mistakes.
Understand Crypto
You might think you understand crypto, but you need to do more research. Do you know what a blockchain is? Are you aware of exactly how cryptocurrencies work and why people are interested in them? You should never invest in something that you don’t fully understand, and crypto is no exception.
Check out this guide to the blockchain and this article on the benefits of crypto to help you understand the industry better.
Make a Crypto Brokerage Account
Once you understand cryptocurrencies, you can make a brokerage account that allows you to trade them. There are a lot of brokerages out there, but you need to watch out for scams. This is a new industry and there are plenty of criminals ripping off new investors that don’t know what they’re doing. Stick to well-known brokerages like Coinbase and eToro to be safe. These have the best security features, and they offer a good selection of coins to invest in.
When you open your account, you’ll be asked for similar information as you would when opening a bank account. Have your address, social security number, and some identification ready. When you have set up your account, you can link a credit card or bank account to add some funds.
Choose a Cryptocurrency to Invest In
It’s tempting to dive straight in once you have your account set up, but you need to take your time. New coins are being released all of the time and there is a lot to choose from. Do you go for one of the original currencies like Bitcoin, or a newer but still well-established coin like Dogecoin? The best place to start is by checking the value. Look at the Dogecoin stock price and the Bitcoin stock price and see how the performance compares. Remember to look at the long-term performance to get a real sense of how they move. Look at the websites of each crypto project and check social media to learn more about the growth of the coin over time.
When choosing coins, put some of your money into smaller coins and a portion into a large, well-established coin. Spreading your money in this way helps you manage risk more effectively.
Crypto investing is a steep learning curve, but if you follow these basic steps, you can start growing your money today.
