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A beginner’s stepwise guide to investing in cryptocurrency
If you are taking your first steps in the cryptocurrency world, you might be looking for a reliable guide that helps you in starting your journey. Becoming a good crypto trader at the very beginning is not everyone’s cup of tea. So, to help you make the most out of your trading journey, we have come up with this guide explaining the core aspects of crypto trading.
Here, we’re going to explain the basics of crypto, how it works, and the tactics to invest safely. I am sure, by the end, you will have a really clear picture of how everything works.
What is cryptocurrency investment?
In short, cryptocurrency (crypto) is a form of digital money that works very unlikely to how your cash or bank balance works. Crypto assets do exist online and are secured by cryptography. However, unlike traditional cash, your digital assets are not controlled by a bank or government. So, if you’re someone who is looking forward to stepping outside of the traditional financial systems, then this crypto investment is your way out. Each crypto uses blockchain technology where every transaction is recorded (which is impossible to alter), and this record is kept transparent. Nowadays, cryptocurrency investment has become a significant aspect of investment dynamics, and this is the reason why you should also learn more about it.
Step-by-step guidelines to invest in crypto
If you are ready to take your first steps into the cryptocurrency investment world, make sure that you go through the given details very carefully so that you can enjoy the associated investment benefits. Here’s a stepwise guide for your assistance:
Step 1- Choose a reliable cryptocurrency exchange
If you’re interested to buy crypto assets, you will need to have your account on a good crypto exchange. There are many popular crypto exchanges you can choose to start trading your digital assets. You can check out the details of the best crypto exchanges on https://coinmarketcap.com/rankings/exchanges/ and create an account on one of them.
Step 2- Decide which crypto you’d like to invest in
This is the next crucial step where you need to decide which crypto you’re interested to invest in. As a beginner, you can go ahead with some popular crypto assets such as Bitcoin, Ethereum, etc. These assets are more stable and are considered a safer option to invest in.
Step 3- Set up a secure wallet
After you have made up your mind regarding the crypto you’ll invest in and have created an exchange account as well, then the next step is to secure your investments. All you need to do is choose a secure cryptocurrency wallet (which can be hot or cold), and then you’re ready to make your first purchase.
Step 4- Buy your first crypto asset
Since your wallet has been set up now, you can make your first purchase. For this, you simply need to sign into the account you’ve created on the exchange and then choose the “Buy” option. Thereafter, fill out the buying details and enter the amount you’d like to invest. Once your transaction is complete, you can transfer those assets to your wallet.
Step 5- Set up a trading strategy
A successful investment journey doesn’t end with just buying the crypto; it is more about having a plan and using some strategies to make your crypto work for you. Some strategies that you can follow as a beginner involve long-term holding (a.k.a. HODLing). On the other hand, you can also take up an active trading approach. However, it is important that you stay aware of the potential risks.
What are the risks of investing in crypto?
Being a beginner, make sure that you are well-aware of the potential crypto trading risks so that you do not lose your assets in the wrong hands. Here are some known risks to that:
- High volatility: Cryptocurrency prices can change dramatically in a short time. For example, Bitcoin has experienced sharp rises and sudden drops, creating the potential for both high returns and significant losses.
- Lack of regulation: Crypto markets are less regulated than traditional financial systems, increasing the risk of fraud, market manipulation, and unreliable exchanges.
- Security risks: While blockchain technology is secure, wallets and exchanges can be hacked. Phishing attacks, weak passwords, or poor storage practices can lead to stolen or lost funds.
- Scams and fraud: Fake exchanges, phishing schemes, and pump-and-dump scams are common, especially targeting beginners.
- Regulatory changes: Government actions, such as new tax rules or restrictions, can impact cryptocurrency prices and affect your investments.
Conclusion:
In this guide, we have talked about all the basics of crypto investment that you must follow as a beginner. While choosing your crypto exchange and wallet, ensure that you DYOR (Do Your Own Research) and choose a secure platform to avoid falling prey to a scam. Once you’re sure about that, I am sure nobody can stop you from becoming a professional crypto trader.
FAQs:
What is the best crypto to buy for beginners?
Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Binance Coin (BNB), and Cardano (ADA) are some popular crypto assets that you can consider investing in as a beginner.
Is it too late to invest in cryptocurrency?
No, it isn’t too late to enter the crypto market. However, it is important to be extra cautious and disciplined. This means you need to do thorough research and be considerate about the crypto you’re investing in.
Is it better to buy crypto at night?
Though the prices of crypto are lower when the market isn’t busy, it is not guaranteed that you’ll be able to buy it at the best or lower price.
What is the best crypto to buy right now?
Some of the best cryptos you can invest in right now are Tether (USDT), USD Coin (USDC), Binance Coin (BNB), Ripple (XRP), Cardano (ADA), Binance USD (BUSD), Solana (SOL), and Polkadot (DOT).
