Buying Cryptocurrency

2017 was most certainly the year of the cryptocurrency, and this has continued into 2018. The global market cap for all cryptocurrencies skyrocketed in late 2017/early 2018 and the industry was making headlines around the world.

With the publicity came thousands and thousands of new people interested in investing and becoming involved in the crypto market. However, there are some important things to know before you buy Bitcoin or any other cryptocurrency, and this article will take a look at a few of them.

Invest Only What You Can Afford to Lose

This is arguably the most important rule in investing (crypto or otherwise). Investments are never a sure thing, so you should only invest what you are okay with losing. This is especially true in the cryptocurrency world as the coins are very volatile and can go to zero just as easy as they can skyrocket. The amount that you can afford to lose will change on a person to person basis depending on your savings, income and risk tolerance.

While the amount you will be comfortable investing will depend on your risk tolerance and how much you have, most people should start out investing 10% of their total in cryptocurrency. As you get more comfortable in the industry and know the ins and outs, upping that number is okay.

Do Your Research

Because of the explosion of the cryptocurrency industry, there have been a ton of platforms and coins released over the last 12 months. This can make investing tough, as you need to weed through the bad ones to find the good ones. While many people will post their views or opinions online, you need to conduct your own research to see which are good and which should be avoided.

You should invest in cryptocurrencies that you believe will succeed and solve a problem the society currently faces. Also, you would want the teams behind these cryptocurrencies to have a plan and a detailed look at what they are doing and how they are doing it. Also, preferably, you would like them to have a working product of some kind, as many ideas die in the concept stage.

Beware of Scams

Unfortunately, while the popularity of the industry has helped spurn unique and innovative new cryptocurrencies, it has also given way to a large number of scams. In fact, experts believe that as much as 80% of ICOs (Initial Coin Offerings) are scams. As a result, you need to tread lightly when investing.

While it is impossible to know if an ICO or coin is a scam or not, there are some things to look out for. An inexperienced team, little to no detail in their whitepaper or an inactive social media presence can all be signs of a scam. Also, if something seems too good to be true, it generally is.

Set Up Your Wallet and Exchange Account

Once you have figured out how much you can afford to lose, watched out for scams and done a sufficient amount of research, it is time to set up your wallet and exchange account. Your cryptocurrency wallet is where you will store your coins, and you will use your exchange account to buy, sell and trade the coins. There are many different exchanges and wallets to choose from, each with their own unique steps and conditions to set them up.

If you want your investments to be safer, you should definitely keep most of your funds in a wallet, preferably a physical wallet. If you keep everything on an exchange, it simply isn’t as safe and secure as it could be.

Know the Terminology

If you have read some crypto-related articles or ratings/reviews, there is a chance that you have run into some words, terms or acronyms you are unfamiliar with. This terminology is not often used in official documents but is still incredibly important to know for research and other purposes, as you will see it frequently. For example, you should know what a hard fork is and what Proof of Work is (along with many other important terms) before ever investing in crypto. It is important to always understand what you are investing in, and this includes the industry lingo.

Think Long-Term

When it comes to cryptocurrency, you need to be thinking over the long term. We are at the very early development stages of cryptocurrency and blockchain technology, and there is still a lot of growth to be experienced in the space. The industry is sure to go through some major ups and major downs. As a result, it can be incredibly hard to predict, so if you try trading for a short-term gain, you could be in for a tough road ahead. However, your investment decision is ultimately up to you, so if you feel you want to try making some quick money, go ahead, but just know it may not be easy.

Be Sure to Diversify

While cryptocurrency is this new, exciting and mysterious investment, putting money in it isn’t all that different than in a traditional investment. Sure, there are more scams and they are far more volatile, but just like standard investments, you should be sure to diversify. If you hold all of your investment in one cryptocurrency, and that currency fails or has a serious drop in price, you will be in for a huge loss.

Keep Calm

With how volatile these cryptocurrencies can be, it is incredibly important to always remember to stay calm and level-headed. While sometimes the volatility allows us to see 100x gains on our investments, it can just as easily cause us to lose 75%. Before investing, know that you are going to gain and lose money quite frequently, in amounts you have never dealt with before. But instead of panicking and selling or buying more, try and keep calm. Don’t let fear and panic dictate your investment strategies.

In conclusion, the cryptocurrency market is growing, and we sincerely hope that the tips and guidelines set out in this article help you get started with investing.

Follow us on Instagram | Twitter | Facebook

This information should not be interpreted as an endorsement of cryptocurrencies or a recommendation to invest. Historic performance is no guarantee of future returns. As an investment class, cryptocurrencies are speculative investments and investing in cryptocurrencies involves significant risks – they are highly volatile, vulnerable to hacking and capital loss and sensitive to secondary activity. Before investing you should obtain advice and decide whether the potential return outweighs the risks.


To Get Updates and Exclusive Report, Enter Your E-mail Below.