In recent years, one technology that has disrupted how people think about money and its control is cryptocurrency. Day by day, more and more people are getting involved in this field. Most of the tech innovators and economist consider cryptocurrency would be the primary coin for transactions in the near future. However, nobody knows what the future holds. But, if it gets going this way, you would not like not getting involved in it early. So, we have prepared this article to give a brief introduction on what is cryptocurrency and how to start investing in it. We have also tried to include some of the best ways to get involved in this hot area.
What is Cryptocurrency?
Cryptocurrency is an open-source technology that enables exchange of money without having to go through banks or other formal financial channels. Bitcoin is the first digital currency and is backed by a number of cryptography protocols. Many other cryptocurrencies followed Bitcoin as the oldest one. Some of these currencies include Ethereum, Litecoin, Darkcoin and others. These have many exchanges on where you can trade your cryptocurrency for dollars, euros and other fiat currencies. Some digital currency exchange websites that have introduced bitcoin and some other currency are Coinbase, BitPay, Poloniex, and Changelly. You may also visit crypto exchanges like Binance, Coinbase, and Gemini, to start investing in cryptocurrency.
How to invest in cryptocurrency?
You would be surprised to learn that it has been quite easy to get started. You will get the best opportunity to invest in this area from the sources you already know. Furthermore, you do not have to read a lot of books, and you will only have to select an easy platform to invest. So, here we have done the task for you and are providing you with some best cryptocurrency exchanges to get started. We have also listed out some good coins to help you to start your crypto investing journey. Also, a stepwise guide has been prepared to help you to understand each part to be followed to start investing in cryptocurrency.
Follow the steps below to start your crypto investing journey.
- Find a Good Crypto Exchange
- Create An Account
- Deposit/Transfer fund
- Choose the coin to invest
- Buy your first coin
- Check for updates
- Selling your coin
Let us discuss the steps in detail.
1.Find A Good Crypto Exchange
The most important thing to start investing in cryptocurrency is choosing a correct crypto exchange. A crypto exchange is a digital marketplace where crypto traders perform buying and selling of cryptocurrencies. It acts as a brokerage firm for digital coins, which connects the buyers to sellers. Buying and selling of cryptocurrencies can be done with fiat money or altcoins.
There are various crypto exchanges available in the form of app and websites. Many such websites come and go. So, selecting one of them is a crucial task and requires a bit of research. Certainly, there are trusted exchanges who have been there in the market since long and perform millions and billions worth of transactions daily.
Below is a list of 10 most popular crypto exchanges who you can trust as a beginner.
Later on, you can research further and select other exchanges that fit better to your style of trading.
2.Create An Account
After choosing an exchange, the next step is to create an account. Each of the exchange has its own policies and process for account opening, depending on the level of security they provide. You may also need to provide certain documents or have a video conversation, or verify your identity with your credit or debit card transaction.
On certain exchange, the level of security or authentication also depends on the amount of money you want to start with. The higher the money you choose, the more complex the verification policy is.
Anyway, you must complete all the steps to start investing. But, still try to read the terms and conditions and the policies related to deposited money and their brokerage charges.
After creating an account in your chosen crypto exchange, you have to deposit the money you would like to start with. You can do that by linking your bank account to your crypto account or directly via debit card / credit Card or via Net Banking.
We recommend you to start with a limited amount of money till you are confident enough to go on your own. Always keep in mind, the crypto market is very volatile. Unlike the stock market, the crypto market fluctuates very frequently and there are high probability of losing your invested money within a short time.
But once you get the grip on the market and understand the factors affecting the market, you can achieve great.
First time depositing can take a longer time than usual (sometimes more than a day). In case your money gets deducted from your bank account, but didn’t get deposited in the exchange, contact or mail the support of the respective crypto exchange.
Once, your money is available in the exchange, you are ready to start trading. Remember, there could be a waiting period after your fund is deposited.
4.Choose the coin to invest
There are various coins available in the market to start your trading. As a beginner, choose the more popular coin that have been doing great in the market since long. Don’t go for the penny coins expecting a high return.
Remember, this is your starting. So, seeing the high fluctuation of your coin, you might get scared. But, you don’t lose everything so suddenly.
And if the coins are right, there are high chances that it will definitely go up.
Before investing, check for the background of the coin. Factors such as, the base company, the time when the coin came to the market, the market capital etc plays a very important role.
To start with, we are providing below a list of 10 of the most popular coins which have been doing great for a long time.
- Bitcoin (BTC)
- Binance Coin (BNB)
- Cardano (ADA)
- Ripple (XRP)
- Chainlink (LINK)
- Ethereum (ETH)
- Tether (USDT)
- Polkadot (DOT)
- Litecoin (LTC)
- Stellar (XLM)
You can also choose the coins that your exchange provides. The above coins are for example only.
5.Buy your first coin
Once you have finalized the coin you want to invest in, select it and choose the amount you want to buy and click buy.
Depending on the exchange, the buying options might vary, but should not be much complex.
The exchanges also gives options to set a limit to buy a coin when it reaches a certain value.
The total value you want to buy cannot be greater than the total fund available in your account. It must be equal or lower than that.
You can also choose to invest in multiple coins with the total fund.
6.Check for updates
After purchasing, the main task is to decide when to sell the coins.
You can choose to sell the coins when the value goes up, and you are at profit. Or, sometimes you might need to sell the coins when its value goes down to prevent future loss.
These decisions totally depend on your sense of trading, your risk taking capacity and knowledge of the crypto market.
For a beginner, we recommend following the news and popular crypto blogging platforms that might give a predictive nature of the coins you invested or intend to do so in the future.
Some options for regular updates on crypto market are provided below.
- Follow crypto news on Google News
- Read articles and news on the official site of the coins you have invested or want to invest.
- Read articles and news on various crypto exchange sites.
- Follow eminent personalities who can impact the crypto market.
- Follow YouTube channels and websites related to cryptocurrency.
7.Selling your coin
So once the value of your coins goes up, and you are at a profit, you can sell your coins.
You can also choose to sell part of your coin and keep the remaining to get more profit in case the value goes up further.
You can set a limit so that the coins get sold automatically once it reaches a certain value. This is an important option so that you need not have to be active on the platform each and every moment. The exchange will automatically act on your behalf.
As cryptocurrencies were coming in, the talk around was that they were filled with fraudsters and thieves. So, when they appeared in the market, they were always under a huge wave of scepticism. Now, over the last few years, the standards of safety for cryptocurrencies have greatly improved. So, you can place your money in these new promising currencies.
However, you need to be careful. You will need to know how to deal with the shady part of the cryptocurrency world.
This article is just a beginner level guide to start investing in cryptocurrency. As you go further and spend time with various coins and news of the market, your skills will improve, and you can be a successful crypto trader in the long run.
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