We are currently experiencing the next big thing in the world of digital currency- the cryptocurrency age. The BITCOIN created an absolute revolution when it was introduced. It has opened a completely new market where people could buy or trade crypto currency. With major players like ETHER, LITECOIN, XRM etc., all competing to overturn the BITCOIN as the leader in the market, it’s safe to say that we are not short of options to choose from.
Websites like Cryptocoinjudge.com help you decide which is the right type of cryptocurrency for you. With detailed comparisons, a user can come to a concrete conclusion on which type of currency to deal with.
Despite the appealing nature of the market, it is very uncertain in nature and does not follow a fixed pattern of sorts. Before investing in any cryptocurrency, one must do thorough research about the entire process and about the risks involved.
Before investing, one must choose the right platform to make the investment. There are hundreds of platforms and choosing the right one can sometimes be a tedious task.
Some of the platforms which are safe to use, as well are reliable, are as follows:
- It gives the user the capacity to trade cryptocurrency
- It is very friendly when it comes to beginners’
- It also has tons of giveaways and bonuses on offer
- It gives the user the power to both buy or trade cryptocurrency.
- It is very friendly to beginners
- The user is able to make immediate purchases at prices desired by them
- It holds a very reputed name in the market in terms of safety, reliability, etc.
- The user must already hold possession of purchased cryptocurrency in order to use the platform for trading.
- The platform gives the user to trade currency pairs which cannot be traded elsewhere
- It is a very user-friendly platform. One of its notable features is that it searches the best rates for you from its database of websites. You get what you want at the very best price.
- It is a platform which acts as a hard wallet, with very high security.
- A user can store coins purchased on any external cryptocurrency exchange.
- It is safer to keep coins in this wallet rather than keeping the coins on an exchange.
Here we will discuss ten such things that everyone must keep in mind before investing in crypto currency for the first time.
How does one start to invest? Before you think of investing your money in cryptocurrency, make sure you are aware of the laws of your country of residence. There are many countries where trading of cryptocurrency is considered as illegal.
Next comes the risk factor.
It’s safe to say that investments don’t come without risks and with the amount of uncertainty in the market, it involves a lot of risks. Invest about 3-5 % of your income, after tax, in crypto currency so that even if a loss is incurred, it doesn’t drill a deep hole into your bank account.
The market is more like a roller coaster ride owing to its volatile nature. There may be times when the returns are 1000x. There are even times when you lose 90% of the money invested. Hence, keeping calm is key to investing in such a market. Only then you will be able to yield a return. Experts say that long term investments are a better way to yield long term returns. And most important of all, you will be freed from the day to day stress involved in trading. Invest once, and just forget about it for a short duration of time. Sell the cryptocurrency only when you feel the time is right.
When is the right time to invest? The answer is simple. There is no right time as such. The market is unpredictable; hence, an approximate forecast is difficult. However, there are times when prices drop drastically and that’s the time when you must go out and invest. Hence, you’re never too early or you’re never too late!
Figure out what kind of investment time frame you are aiming for. Is it a long-term investment strategy or is it a long-term investment strategy? Every country has a different tax rate on cryptocurrency exchanges. These taxes depend on the time frame of the investment. Long term investments invite lower tax rates, whereas, when it comes to short term investments, you must pay tax as and when you reap the profits.
One must be extra careful with the type of platform on which they make the investments on. It’s always advised to invest using an exchange platform and not using brokers. This way you will be saving a lot of money on the fee levied. Brokers charge fees suitable to them, whereas, exchange platform follow a market rate which is uniform to everybody.
Read, read and read! Keep yourself involved with the current happenings in the market. This way you have a better idea on what type of currency to invest in. Study something innovative about blockchains and cryptocurrency on a daily basis. This keeps your mind active and engrossed in the field. If you do not update yourself daily on the current happenings in the market, there are chances that you might end up making an ill-informed investment decision leading to a possible loss of the money you have put in.
As a new trader, one must have a thorough knowledge of each type of cryptocurrency on offer. Before any fresh investment, the question arises “What type of cryptocurrency should I invest in?”.
A useful resource for every new trader is https://www.icotokennews.com/. It acts as a detailed guide when it comes to crypto currency investment. It also helps you choose which ICO to invest in.
As of today, the BITCOIN is operating in a near saturation level whereas the market has seen the influx of new types of cryptocurrencies like Litecoin, Ether, etc. These currencies are cheaper, faster and more reliable than the BITCOIN.
Hence, research on which type of cryptocurrency is best suited to the type of investment you wish to make.
Media houses today are focused only on the surprising rise of BITCOIN from absolutely nothing to what it is worth today. This is enough to pull an avalanche of investors who want to invest everything they have into BITCOINS. This is a very risky process. There could be times when you make a tidy profit and there will be times when you will have to face a potential downfall in the value. To fight this volatility, one must avoid investing everything into one form of cryptocurrency all at once. Think of diversifying your investment. There may be instances when one crypto currency is experiencing a mega growth in its value while at the same time, another one is experiencing a downfall. At least this way, your net investment won’t be a complete loss.
A diverse investment doesn’t mean investing in cryptocurrencies alone. It could also involve a person to trade in stocks along with an investment in cryptocurrency.
Make sure that you choose reputable platforms where you will be trading your cryptocurrency. There are many cases where third party exchanges with fancy names appear to be genuine. Yes, you can carry out transactions but you end up paying a higher than usual transaction fees for every transaction. Make sure that you secure yourself with a safe wallet software such as Coin Base and Warp Wallet. Punch in strong passwords. Also use two-pin authorization wherever feasible.
Always proceed with caution! The market is still in its early years and is not well established like stock markets. Hence, invest carefully. Keep in mind that you must never money you can’t afford to lose. There are high chances that you might lose all of it, thereby, putting you in a very difficult situation to deal with. Try to begin small. Makes small investments, but time to time. This makes it a gradual investment process. Experts say that investing on cryptocurrency all in one go is a bad practice. Instead they should “Stage in and Stage out”, which means that they should invest step by step. Invest a little first, wait for a small duration of time, and then invest again.
It’s good to purchase cryptocurrency on an exchange platform, but it is a rather silly and risky thing to store your purchases on the exchange platform itself. There have been multiple instances where exchanges have got hacked and all the purchases were reported stolen. To avoid such an event, one must purchase a digital wallet and store their cryptocurrency there. Mobile wallets such as Jaxx or Coinomi are a good pick to store your investments online.
They are safe, reliable, and most important of all, protected from malware and hackers.
The above points are just some of the do’s and don’ts when it comes to trading in the cryptocurrency market. This is still a new market with an unlimited potential. Equip yourself with vast information about every cryptocurrency in the market today.
However, if implemented properly, cryptocurrency trading could be the solution to many of the financial problems we face in the world today.