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How to Start Investing in Cryptocurrencies?
Written by: PaxForex analytics dept - Tuesday, 14 May 2019 0 comments
Investing in cryptocurrencies is a new and exciting way to invest a part of your capital or diversify your traditional investment portfolio. It’s currently the best performing asset class. That’s right, it is consistently outperforming stocks, bonds, funds and even real estate! If you are getting into the crypto world, be prepared for a roller-coaster ride because it is a wildly volatile asset class. After all, it is a new sector in the financial industry and that means things are changing all the time. You have so much information to understand, it can seem like learning a new language.
If something has consistently gotten better and easier over the years in the crypto space, then that’s the user experience of buying cryptocurrency. What used to be a daunting task that leads users to shady platforms, is now simple and intuitive and can even be done from one’s smartphone. Contrary to what you may have heard or think about cryptocurrency investing, it is just another asset class, not much unlike investing in stocks, bonds or options. But as a crypto investing beginner, you will have to put in some time to learn the basics. Once you have a good foundation, then you will surely become more comfortable in the space and gain more confidence.
As important as it is to decide how much to invest in cryptocurrency, it is also necessary to be strategic in understanding the fundamentals of a digital asset, as this can play a major role in the level of risk involved. Fundamental analyses are the best indicators for long-term investors, so you'll need an understanding of how a coin or Initial Coin Offering (ICO) functions, its history and what it brings to the table before choosing to participate in its development. It might be best to look
at the purpose of the cryptocurrency you’re interested in, how long it has been in the market, its market capitalization and its underlying tech solutions.
Once you understand the reason or reasons you want to invest in cryptocurrency, then the next step is learning how to invest. The first thing you will need to do is set up an account on an exchange. This will allow you to buy cryptocurrencies with fiat currencies. Popular exchanges include Coinbase, Kraken, and Binance. Once you are set up, you can choose from a plethora of cryptocurrencies including Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. If you are interested in growing and diversifying your portfolio, you may want to include more than just one type of crypto. To do this, you can either buy again with fiat currencies or set up another account on a different exchange where you can trade Bitcoin for other cryptos.
As interest in cryptocurrency grows, investing has become easier—even for beginners. First, you need to know how you want to invest. If you prefer to be in control, then direct investing is the way to go. But if you want to invest in the crypto industry using more familiar currencies, then indirect investing is probably right for you. It doesn't matter if you choose to invest cryptocurrency like it's a retirement fund, or you want to day trade, it will be many a month before the first thing you do in the morning is something other than check the charts to see where the market is at. From the moment you learn how to buy cryptocurrency until you sell them all and move to the moon, you never stop learning.