Best Ways to Invest in Cryptocurrency (Newbie Guide)

We all have heard of cryptocurrency ever since 2017 when it starts to boom and the price of bitcoin skyrocketed close to $20,000. Regardless of the price, risks are inherently related to investments in cryptocurrency but still, but the best ways to invest in cryptocurrency are still there.

You guys probably know the story of how bitcoin made people rich overnight as well as making people seriously in debt. The question will be, did they do their studies before investing in any sort of scheme, especially the Ponzi scheme. Don't ever fall for those tempting traps and don't hesitate to ask a lot of questions before taking a step into the crypto world.

Here are some of the best ways how you can invest in cryptocurrency effectively.

1. Do in-depth research before investing in your cryptocurrency

Before you even think of making money with cryptocurrency, it is wise to do some research on each of the individual coins. You will then know the function of each cryptocurrency and the utility benefits that it brings to the crypto world.

Don't fall into scams like those High Yield Investment Programs like cloud mining or investment which promises high returns with no risk. There is no such thing as no risks in any type of investment in this world and that includes cryptocurrency.

We have seen a lot of people make a huge loss due to the abrupt decrease in the price of the cryptocurrency in 2017 where some people were too hyped about others making millions of dollars off selling bitcoin. Don't simply just gamble with your money because cryptocurrency is very volatile in which you can either gain a huge win in one day or a total loss.

2. Find the best exchanges to sell your cryptocurrency

The place where you can buy and sell cryptocurrency will be the exchanges. There are a lot of popular exchanges out there like Coinbase, Binance, Bitfinex, Luno, GDAx, and many more. It is up to you to do some studies on which one gives you the best rate for cryptocurrency conversion from fiat and vice versa.

In addition to that, there will be a fee to incur like conversion fees and mining fees. This is how the exchanges make a lot of money from these fees. If you want to deal with a person either face to face or online, LocalBitcoins is one of the examples. However, this is slightly riskier since you don't know who the person is and it is based on the trust of both parties.

Therefore, I highly recommend using the exchanges stated above since you are dealing with the company itself rather than an individual.

Not just that, but in some countries, companies also provide crypto atm where you can simply buy and sell bitcoin through the ATM. Be sure to have a proper wallet to store all your cryptocurrency.

3. Invest only the amount you are willing to lose

Risks are highly related to any investments that you can think of and cryptocurrency are no exception. This is something you have to do on your own by weighing the gain and your own risk tolerance. If you are someone who is risk-averse and are not willing to build your wealth in the long term, then cryptocurrency probably isn't meant for you.

However, if you're all in for the risks and understand how the market works then go for it. But bear in mind that the crypto market is very volatile and always invest the amount that you are willing to lose, in case things go sour.

If you see your friends invested $10,000, it does not mean that you have to do the same. It might be that your friends have more money than you and they are risk-takers. If you are still new to this, then it is advisable that you start low, let's say around 5% of your income.

Once, you have started to understand deeply how the market works and the risks involved, you can start to go higher with the investment. But at the end of the day, it's your money and it is going to be your decision. Don't put yourself in a situation where you lose it all and are unable to get back up.

4. Don't put all eggs into one basket

One of the best ways to reduce the risks is to diversify your investments in different types of cryptocurrencies, By doing this you can be sure to not lose it all and at least gain some profits. Since we know that the price of cryptocurrency is very volatile but despite that, all of them failing at the same time will be rather unlikely.

There is numerous crypto for you to explore aside from Bitcoin like Ethereum, Ripple, Bitcoin Cash, Litecoin, Monero and so many more. Each individual crypto will have its own unique characteristics and be sure to not fall for Initial Coin Offerings(ICO) scams that are quite famous these days.

What they do is they give investors an opportunity to buy their crypto at a very low price and when the price goes up, they will simply sell all their crypto leaving all the investors at a total loss.

Study First and Tips for Investing

Having a good financial advisor can sometimes help you in making real-life decisions regarding which crypto is the best to invest in. The idea of spreading out your investments is to avoid you from being in those high-risk situations of losing all your capital.

Make sure that you do all the calculations regarding how much you need to invest and where you should invest your cryptocurrency. Because at the end of the day we don't want you to have all your money burnt without gaining anything.

Have you guys taken the opportunity to invest in cryptocurrency?

Source :