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Crypto Investment Guide

Crypto Investment Guide | What Beginners Need To Know

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Cryptocurrency investing includes the trade of Crypto against one another or against a particular currency while the Holders invest when the price is low and selling the stored Crypto when there is a sizable increase in value.

The recent attention to a new uprising digital world is no surprise following the recent surprising increase in Bitcoin. Now a series of questions like; how do I invest in Cryptocurrency? What is Cryptocurrency? Is it safe to invest in Cryptocurrency? And other related questions are being searched for at rising rates. 

 

What is Crypto Investing?

There are a lot of ways through which you can invest in Cryptocurrency.

Investing deals more with learning to keep your emotions in check,  knowledge of the Cryptocurrency, and preparation you have carried on beforehand.

So many people complain about how highly volatile the Cryptocurrency market is, yet Crypto traders love to join on these grounds. So, you have to understand what works for you and stick with it.

What is Crypto Investing? Crypto investing deals with numerous ways through which you can invest and make a profit from the Cryptocurrency market.

Crypto traders trade Cryptocurrencies at different rates, such as buying and selling in minutes, hours, or days depending on variables decided by the trader.

While Holders invest by buying Crypto and the plan to keep their Crypto securely stored for a more extended period until the desired growth is reached.

Investing in Cryptocurrency requires a sharp mind, and you can’t be emotion about your investment. The market can rapidly increase or decrease by 10+ percent a day. Without the proper preparation, you may emotionally make a decision that can cost you some of your investment or not collect the gains you could have from the trade.

crypto investor graph

 

What should I know before investing in Cryptocurrency?

In short, you should know as much as possible. This market is not friendly if you are not familiar with how to work your way through the market.

Let take a look at some thing you must do before you begin your journey.

 

Be prepared to take calculated risks

The Cryptocurrency market is a very volatile one. Unexpected market changes will inevitably occur, and it is essential that you research and understand these details, so you know what the market is capable of.

In 2017, the Bitcoin around mid-December moved from a per token value of $6,700 to $19,700 in just less than a month. 

A lot of people made a profit from this sharp increment, and some also invested at that point. Shortly after reaching this all-time high, it dropped its value to $13,800 per coin value; this was a huge disappointment and loss to investors that invested at that all-time high.

 

Understand which Cryptocurrency you want to invest in and why you want to get involved

What do you know about the Cryptocurrency marketplace? This is an honest question you have to ask yourself before you invest in Crypto.

So many people dive into the investment of Crypto just because they read about an article making a lot of money from it.

This should be a requirement for you to have a clear understanding of what and where you intend to put your money will save you a lot of future stress.

If you can answer the question “what do I know about the Cryptocurrency market,” then the next question is, Why do I want to Invest? And Which Crypto should I invest in? Once you can answer this question truthfully, then you are on the right path to Crypto investing.

 

Which Crypto Exchange do you intend to use?

There are a lot of Crypto exchanges, but they vary which what they offer. Cryptocurrency, like Binance, doesn’t allow U.S. citizens on their platform until their U.S. exchange is launched in 2019.

Some other Cryptocurrency exchanges like Gemini, and OKEx requires the KYC verification before you can conduct any transaction on their platform. This is not necessarily a negative as this fundamentally helps with the security of the platform.

You have to do proper research on the terms and conditions of each Cryptocurrency exchange before you invest your money on their platform. The security level, mode of payment, and the type of Cryptos available on the transaction are other factors you should consider.

 

How do I invest in Cryptocurrency?

There are various ways in which you can invest in Crypto; these ways include: 

 

Trading Cryptocurrency

You can trade Cryptocurrency against one another or against a currency.

There are so many techniques when it comes to trading Crypto. Some people deal with day trading, which involves the short-time trading of Cryptocurrency and taking your profit in bits.

Other traders deal with long -term trading of Crypto; this might, however, increase the risk, but your gain also increases.

Common techniques of trading include; news trading, range trading, scalping, and High-frequency trading.

 

Buying and Selling Cryptocurrency

These types of investors are commonly referred to as HOLDers.

They work with the strategy of buying when the price of the Cryptocurrency is low and selling after the Cryptocurrency hits an acceptable targeted price.

HOLDers can trade with short-term buying or selling or long-term based on your target price.

 

Investing in Mining

This is perhaps the most stressful and profitable way to invest in Crypto.What is Bitcoin Mining Actually Doing

It involves mining of the Cryptocurrency using specially built computers to solve advanced algorithms. 

The reward awarded to successful mining of Crypto depends on the Crypto, but the prize generally reduces as the volume of Crypto available increases.

If you want to learn more about mining check out our articles called, Best Mining Software and ‘What is Bitcoin Mining Actually Doing.’

 

Which is the Best Cryptocurrency to invest in?

There are a lot of Cryptocurrencies in the Blockchain. The best Cryptocurrency to invest in is dependent on you. But to invest in them, you should have a clear understanding of each of the Cryptocurrencies.

Let us take a look at the top five Cryptocurrency in which you can invest in.

 

Bitcoin

Bitcoin has gained tremendous recognition since its launch in 2009. It has an all-time high of $19,700 per token value. The Crypto coin was created by an unspecified individual or group under the name Satoshi Nakamoto.

Bitcoin offers faster, more secure, and a more natural way of handling financial transactions. Bitcoin is now used by many organizations as a valid means of payment.

Bitcoin works with an open-source code that allows any person on the server to download a part of the shredded details of transactions on the server.

Bitcoin is the Cryptocurrency that has drawn so much attention to the Cryptocurrency world due to its steady increase in price.

If it is accepted as a valid means of payment worldwide, then it has the potential of being the digital Gold.

 

Ethereum 

Ethereum is commonly referred to as the silver of Bitcoin. Ethereum has an all-time high of $1,402.57 reached in 2017.

Ethereum provides more comfortable and more secure ways of developing applications without the need for an intermediary. Ethereum is also the base technology for smart contracts, which has started to gain full recognition and usage.

Ethereum has fared considerably well in value since its launch in 2014. 

Ethereum shares close similarities with Bitcoin but differ significantly in its usage.

 

Cardano

Cardano was created in 2017 by Charles Hopkinson, who was also the former CEO of Ethereum.

Cardano has an all-time high of $1.18 per token as of 2017. Cardano was created to function as digital cash.

It is different from Bitcoin as it works with the Haskell programming language instead of Bitcoin’s open-source code.

Cardano has a maximum supply of 45 billion tokens. Cardano offers a more user-friendly interface and faster processing of a transaction.

 

Ripple

Since Bitcoin has reached lamplight, other similar coins have been developed; one of such coin is Ripple.

Ripple is another Cryptocurrency that deals with digital cash transactions.

Ripple has been proven to process transactions at a faster rate than Bitcoin. Ripple sells its services to financial institutions making it not as Decentralized as Bitcoin.

Ripple was designed so financial institutions can adopt its use in their cash transactions.

 

ICON

ICON is a Korean based technology. ICON allows independent base Blockchains to interact with each other. Icon has a community known as the Icon Republic, everyone in the community is joined by a loop chain.

These are just some of the Cryptocurrency you should watch out for.

There a lot of other Cryptocurrencies can possess more potential than the mentioned ones. Proper research into each Cryptocurrency will give you an appropriate insight into what they offer.

Recommended Crypto Tools

 

Is it safe to Invest in Cryptocurrency?

The choice to invest in Cryptocurrency is yours. A lot of people have invested, and they are grateful for it; today, while few that invested without the understanding of how the market works lose their money and generalize the whole process as a fraud.

If you plan to invest in Cryptocurrency, you will need to own storage where you will keep your Crypto. 

What is Storage? Storage, also called a Crypto wallet, is the place where you store all your acquired Crypto.

A Crypto wallet is similar to a bank, the only significant difference is that it works with the blockchain technology, and the Crypto wallet is a digital storage.

The Crypto wallet works with two essential keys; the public key and the private key.

The public key is also known as the wallet address, and it can be given out to receive a Crypto coin in your wallet. The private key, on the other hand, is a secure key that should remain secret and never shared.

If given out or lost, it can lead to forfeiting your Cryptocurrency. There are various types of storage, and each possesses its own unique advantage and risk. Types of storage include:

  • Mobile wallet: this is a wallet that is downloaded on your mobile phone. This wallet is readily available for use anytime you need it. It can be very risky if your phone is hacked or if you download a fraudulent third-party application.
  • Online wallet: online storage stores the user’s information in the cloud. You can log in to your wallet on any device with this type of wallet. Due to multiple login access, it can be hacked if extra precaution is not taken.
  • Hardware wallet: Hardware wallet keeps users private key on a USB. This is one of the safest wallets as it is offline most of the time and will only be connected if plugged into a system. This type of wallet is expensive; which is the weakness it possesses. See our recommended Trezor Hardware Wallet review.
  • Desktop wallet: this is similar and operates in the same manner as the mobile wallet. It is a wallet installed on a P.C., it can be risky if your system gets infected or in case of hacks.
  • Paper wallet: this is also known as the “cold storage.” A paper wallet is the most secure type of wallet. It is a physical reference to a public and private key, sometimes in a sheet of paper. It is not connected to the internet, which eliminates the risk of been hacked.

The need for a VPN is highly recommended to protect your identity while using some of these wallets. Proton VPN and Proton Mail is a very effective tool to apply for this purpose.

 

Can you still make Money Off Cryptocurrency?

There is no better time to make money off Cryptocurrency due to its growing awareness.

You can still make a living off Cryptocurrency if you have the desire and do your necessary due diligence.

Day traders make a considerable amount by threading on the volatility of the market, and a lot of them make a full-time income trading crypto.

There is no perfect time to start or invest in a business, if you feel you are ready and have the necessary and required skills and tools, then that is the right time.

The Cryptocurrency world will keep growing, and more people will continue to make a living and utilizing crypto to gain wealth!

 

How To Get Free Cryptocurrency?

Yes, there are ways to get Crypto for Free, but they do come with some considerable drawbacks if you choose incorrectly.  Some of the safest roads in which you can get free Cryptocurrency include:

  • Airdrops: this is a strategy most companies use to increase awareness of a new Cryptocurrency. It is more of a marketing campaign as you can earn more by sharing with your friends and getting them to apply for the Airdrop. Sometimes, Airdrop can be used as a decentralization method. If the developers feel a Cryptocurrency is too centralized, the organization will randomly drop Crypto coin in wallets, sometimes depending on how much of a particular coin you have in the wallet before.
  • Referrals: This is another way to get free Cryptocurrency. Companies put out campaigns where you gain Crypto coins by referring people. The more you refer, the more you earn.
  • Hard forks: this is perhaps the easiest way to get free Cryptocurrency. When a Cryptocurrency administration can agree on the same future, they often times split to create new ideas. If you own the Crypto coin at the moment of the split, then you will have two different Cryptocurrencies. A typical and common example is Bitcoin and Bitcoin Cash. For you to get Bitcoin Cash for free during the split, you have to own some of the original coins, which was Bitcoin, in this example. Remember that the coin that forks is an entirely separate entity. You should remember this if you decide to stay invested since the growth of each is wholly independent of the other.
  • Staking: Getting your investment to work for you by helping the network. All you need to participate is to deposit a certain amount in a staking wallet. A random selection is always made, once you are selected as a node, you get to confirm transactions and get paid a small fee for your service.  This method involves you investing your money in a staking wallet, and you get rewarded for doing so.

 

How to Earn Cryptocurrency?

This involves you putting in a bit of effort, and you get rewarded with Cryptocurrency. There are a few ways in which you can earn Cryptocurrency, these includes:

  • Mining: mining serves two purposes in the Cryptocurrency world. The first is to confirm transactions before it is added to the Blockchain, and the second is to mine new coins. Either way, you can earn Cryptocurrency, but the latter has more value than the first. Finding a new Bitcoin will get you a reward of 25 BTC. Until the (halving in 2020), then the reward will be cut in half to 12.5 BTC. All you need for mining is a stable system with a high processor and CPU plus constant electricity. The mining process is power-intensive and can, therefore, lead to high charges on the electricity bill. Nowadays, you have the option to Lend a Processor and CPU on platforms for mining, and you will get a percentage of the reward after successful mining.
  • Arbitrage: Arbitrage deals on trading with market security fluctuations. It involves purchasing the coin on one market and quickly selling in another market due to the inefficiencies and inconsistencies of the market. It deals with price deviations in different markets. Benefits of ArbitrageThere are specialized computers made for this purpose. These computers monitor any price deviation in different markets and quickly earn a quick profit using this method. For example, the value of Crypto A has a value of $10.00 on an exchange in the U.S. The same Crypto’s value has a value of $10.20 on an exchange in Asia. You can buy from the first market and sell on the secondary market to gain $0.20 per coin. This price multiplied by thousands can result in significant profits.
  • Trading: trading involves threading on the Cryptocurrency market volatility. Cryptocurrency is known to be highly volatile, which makes it a suitable currency for traders. Traders basically determine the change in price; they sell if the price is going to fall and buy if there would be an increase in price raking in their profit through this process. Technical AnalysisSome traders only deal with daily trading, this type of traders are known as Day traders. There are many strategies traders employ to analyze the market; some are very simple to understand while others require deep learning before you can learn to use them. 
  • Freelancing: This is another way to earn Cryptocurrency. Do you have any skills you can offer out to people or companies? If yes, this is for you. Freelancing has grown a lot in recent times due to the lack of suitable jobs in some nations. Freelancing involves offering a skill you have, such as programming, data entry, voice-over, video editing, etc.. to people that require the skill, and on completion of the job, you get paid. Request to be paid using Cryptocurrency for your work.
  • Earning programs: there are so many earning programs available online. We will take the Coinbase earning program as an example. Coinbase earning program encourages learning as it is an “earn as you learn” program. The program rewards you with Cryptos when you learn about specific cryptos by watching short educational videos and completing quizzes about them. Coinbase earning programs hope to bridge a limiting factor for the new digital age, which is the lack of knowledge about what the digital age offers. The earning program works to open up and encourage a new set of users to the blockchain network. 

You can sign up for Coinbase Earn Free here or to learn more about Coinbase and the Earn program see our Full Review.

 

 

How to buy a Cryptocurrency?

The first step to buying Cryptocurrency is to get a Crypto wallet where you can store the Cryptocurrency.

There are so many Cryptocurrency exchanges that give out a wallet once you sign up for their platforms.

The security level of the exchange to be used must be verified to avoid losing your Cryptocurrencies to hacks and scams.

Some of the exchanges you can check out include; Coinbase, Changelly, Trezor (works with the recommended Trezor Hardware Wallet), etc.. 

This article will discuss extensively how to buy Cryptocurrency on Changelly as an example. Changelly offers a very unique and user-friendly interface, someone new to the Crypto community would easily get-by using the platform.

How do I use Changelly to buy Crypto?

  • The first step is to visit Changelly.
  • If you own a wallet address already then, you don’t need to sign up at the start. But for people who don’t, Changelly offers free wallet on its platform. Getting a hardware wallet is highly reccomended. 
  • Once you have a wallet, you can proceed to buy any Crypto of your choice. The platform offers over 150 Cryptocurrencies. You are required to select the Cryptocurrency, the currency exchange, and provide your wallet address. For any platform, you only need to drop your public wallet address,  the private address should remain private.
  • Payment can be made using your credit card on this platform. In a few minutes after the purchase has been completed, you will receive confirmation of the transaction, and the coin will be visible in your wallet.

 

 

There are other Cryptocurrency exchanges you can check out for the purchase of your Cryptocurrency. Most also offer free wallets to new users, but make sure you confirm the credibility of the Cryptocurrency exchanges before you use them.

 

Why Trade Cryptocurrency

Cryptocurrency is a technology that works with a decentralized system and is secured by making use of Cryptography.

The base technology for all digital coin is the Blockchain. The Blockchain is perhaps the most secure system for cash transactions in the modern world.

This means that the use of Crypto will continue to increase as it is further adopted across the globe. If you make the correct decisions, you can profit from this growth. 

The market is still new, regardless investing is risky, and you could lose all of your investment.

Cryptocurrency offers many added advantages compared to the traditional mode of transactions; it is faster, more secure, always available, and most importantly, no single authority has the power over it. 

As long as you are abiding by regulations in your jurisdiction then you can freely trade and move funds as you please while maintaining full control of your crypto.

 

Why Cryptocurrency

Cryptocurrency spreads across all sectors, not just the financial industry.

Ethereum is a coin mainly built for developers. The currency is used to build decentralized applications that are readily available to anyone on the Blockchain server.

It eliminates the middlemen that control the marketing of the app; the developers take the application to the interested public directly. Also, the use of smart contracts cuts across all sectors.

If you own a business, the smart contract will allow the handling of your business transactions to be secure as all conditions on the smart contract must be fulfilled before funds are released.

For auditing, Blockchain will make auditing of records more accessible. All files of transactions are kept in the nodes of all servers, which can be easily retrieved anytime it is needed without the risk of manipulation.

Cryptocurrency is the future of the digital age. It will give us more control of our finances, we can send and recieve payments without intermediaries and also potentially profit from good investment decisions.

For further understanding of the crypto, we have an article called, How Cryptocurrency Works that will help you understand more about the benefits.

 

Final Thoughts on Trading Cryptocurrency

Cryptocurrency offers a much-added advantage than a lot of people know about, and only a few people utilize the full functionality of the technology.

This is where the opportunity lies. If you learn and begin to effectively trade Crypto, you are early to the market.

By capitalizing on the future investments of people learning about the space can prove to have an excellent ROI in the long term. Just take your time and know it is easy to lose your investment in this market. 

You must protect your crypto investments as well as your identity when maneuvering through the market. To help, we have laid out our Battle-Tested Recommended Crypto Tools that will keep your details safe and secure.

 

FAQ

Q: What is Cryptocurrency

A: Cryptocurrency is digital cash that is as easy to send as an email once you understand the process. Just like you store cash in your wallet to pay for goods with fiat, cryptocurrency also uses a wallet to store, send, and receive digital currencies.

Q: Why Do You Need a Crypto Wallet

A: Cryptocurrency wallets store public and private keys that interact with blockchain network to keep a record of all the transactions. If you use any cryptocurrencies, you’ll need to have a digital wallet.

Q: Can You Still make Money With Cryptocurrency

A: Yes, with effective execution of strategies mentioned such as Arbitrage, Holding, Trading, Mining, Staking, etc you can still make significant gains on your investment.

 

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