Investing in Cryptocurrency
Should I invest in crypto?
Cryptocurrencies seem to be one of the best investment decisions right now.
A few of the reasons:
- Increasing net worth. The depreciation of many currencies encourages people to find a better investment vehicle. As a result, people are turning to cryptocurrencies believing they are a better alternative.
- Technology. The technology underlying cryptocurrencies is simply amazing.. Thanks to this technology, you can use your currency wherever you are in the world.. Unless the government interferes, of course.
- History of success. Bitcoin, the first cryptocurrency, has experienced a huge price increase since it was created in 2009, became popular with the masses, and above all else. began to be accepted by states.. Investors who invested in Bitcoin when it first came out made very high profits.. So investing in cryptocurrencies can increase your financial standing over time.
What are the risks?
There are a few questions you may want to know before investing.
- Balloon accusations. Some economists think cryptocurrencies are bubbles and will burst over time.. An example of these people is Jamie Dimon, CEO of JPMorgan.. Because cryptocurrencies are not backed by any government or authority and have high volatility, some traditional investors believe that cryptocurrencies will never replace government money.
- Variability. As we mentioned in the article above, variability is a factor that intimidates people.. Cryptocurrency prices are highly volatile. When there is a positive change, you can make huge profits. But in case of a negative change, you can suffer losses of the same magnitude.. As an example, you can take a look at the price chart of Bitcoin over the last 3 months:
- Legal aspects. Some countries Although recognized by the world, digital currencies are not yet accepted by every country in the world.. So in some countries, you may have trouble creating your crypto wallet or you may not be able to go and pay with digital money at the mall.. In addition, if a part of your income is cryptocurrencies; You may have trouble with tax because some countries still haven’t made a clear decision on taxation of cryptocurrencies.
Which cryptocurrency should I invest in?
Tough question.
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There are many factors that should be considered before investing.. To list the most important ones:
- Acceptance. Before investing in a cryptocurrency, research how many countries legally recognize it and allow it to be traded legally. .
- Portability. One of the most important points of digital currencies is their easy portability.. See if you can move it from one place to another, say from one digital exchange to another without any problems.
- Security. It needs to be secure. This is the biggest feature of all legal currencies.. The most important feature of all kinds of currencies, ranging from the American Dollar to the British Pound, from the Turkish Lira to the Chinese Yuan, is that they are reliable.. So a good digital currency needs to be secure.
Many digital currencies have been created over the years with the promise of “becoming the most valuable cryptocurrency”.. Let’s list the most common ones:
- Bitcoin. Bitcoin is currently, and has been for a long time, the most valuable cryptocurrency to invest in.. We would not be wrong if we say that the most attractive feature of Bitcoin is that it promises huge profits.. However, due to its high volatility, it can also cause huge losses.
- Ethereum. Ethereum is currently the second largest digital currency in the world in terms of market cap and price.. It has a different technology compared to Bitcoin.
- Litecoin. Litecoin has been one of the most stable cryptocurrencies ever. We can even refer to it as a “safe harbor”.. However, Litecoin was also hit when China decided to ban ICOs.
There are too many and completely different cryptocurrencies.. Since we could not describe them all in detail, we only mentioned the most well-known ones.. It will be more beneficial for you to find the most suitable crypto currency with a more detailed research.
How to start investing in cryptocurrencies?
You can follow the steps below.
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- Decide which cryptocurrency you want to invest in. This step comes first. Since the total number of cryptocurrencies is more than 1000, the stage of deciding which one to invest in is quite critical.
- Set aside some money to invest. When starting any business, you have to have a certain plan and you need to have a goal. So, in the second step, decide how much you want to deposit in cryptocurrencies weekly or monthly (you can only deposit once if you want).. Once you have decided on the amount, put your money aside and wait for the right time to start investing.
- Register with a cryptocurrency wallet. You will need a wallet address to store the cryptocurrency you purchase.. There are all kinds of wallets such as Bitcoin wallet, Ethereum wallet, etc.
- Join an exchange. You now have a cryptocurrency wallet, but you still need to join an exchange because you will be handling your trades there.. There are all kinds of exchanges such as Bitfinex, Bittrex, Coinbase, Poloniex.
- Buy your crypto money. After you create an account on an exchange, you can start buying. If you do not have the slightest idea how to do it, they will guide you when you contact the support team of the exchange you have registered with.
- Keep your crypto money. Offline hardware wallets will help you protect your cryptocurrencies from internet servers. So you won’t be hacked.
Please keep in mind that investing in cryptocurrencies is risky. Please don’t forget to do your own research on the subject before making an investment decision.
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