Tips for Investing in Cryptocurrency
Create an account on a cryptocurrency exchange to purchase Bitcoin or Ethereum.
Bitcoin and Ethereum are the fundamental coins in all of cryptocurrency. In addition to being used as forms of investment themselves, both Bitcoin and Ethereum are universally accepted as payment for altcoins on exchanges. These altcoins, while extremely volatile, offer some of the highest ROI if you invest properly. There are a few exchanges that let you purchase Bitcoin or Ethereum using fiat currency (i.e., USD), Coinbase is the most popular of these exchanges, but there are others you can find that might offer a cheaper rate. It’s also important to note that you don’t have to buy a whole Bitcoin or Ethereum token, you can purchase them in fractions as well (i.e., .005 BTC), saving you thousands of dollars.
Create an account with a new cryptocurrency exchange.
You can use some of the bigger exchanges such as Binance or Bittrex if you’d like, but you would be missing out on a lot of the benefits new exchanges have to offer. In my opinion, finding new exchanges for your altcoins is vital to investing. Often these exchanges have a lot of promotions, including free coins, low trading fees, and fewer barriers to register. Just be sure that that the exchange you pick is one you feel comfortable trusting with your funds.
One new exchange I love right now is BitMart. They have started to list more coins and I suspect they will continue to do so at a steady rate. They currently offer XLM/ETH, MOBI/ETH, and BMX/ETH trading pairs. BMX is their own utility token which can be used as payment for transaction fees (similar to Binance’s BNB token). They have a ton of promotions to earn free BMX right now too, which you can find on their twitter. They also offer 0% transaction fees until April 15th, meaning you can save all the BMX you get early on and use it on the exchange later when they have more trading pairs.
Purchase altcoins and plan when to sell.
There are hundreds and thousands of altcoins in the crypto world so I’m not going to tell you which coins you should invest in. However, I will give you some general tips on how to select the right coins to invest in:
1. Search for altcoins on CoinMarketCap. CoinMarketCap is easily the most popular website to research altcoins. You should only consider investing in coins within the top 100 by market capitalization.
2. Don’t invest in a coin just because its value has grown recently. It may be nearing its peak value, in which case you won’t be able to maximize your ROI. In some cases, you may even lose money. However, there are exceptions where some external factor points to continued growth, which is why the next step is important…
3. Research as much as you can about newer coins and think to yourself why the coin may grow in value based on its applications. Things that you should look for include project whitepapers, blogs, and community subreddits.
· Blogs: Bitcointalk, Coindesk, Cointelegraph, Bitcoin.com, Coincentral, NewsBTC, Blockgeeks, CCN.
· Subreddits: r/Bitcoin, r/CryptoCurrency, r/Ethereum.
4. Diversify your portfolio. By investing a small amount in multiple coins rather than a large amount in one specific coin you protect yourself from sustaining larger losses due to any unforeseen circumstances arising with one particular coin.
5. Set goals for your investments for when you want to sell (i.e., +10%, +25%, etc.). Even though it may be hard to watch a coin’s value increase after you’ve sold, it’s better than losing money. Be sure that you set a goal worth the risk of investment as well. You wouldn’t sell at a 10% gain if the investment was only for $100.
Disclaimer: These are my opinions, as such, they do not constitute financial advice. While some people have made a fortune by investing in altcoins, others have lost money. You should never invest more than you are willing to lose and if you wish to be one of the few people who succeed then you have to be smart about it.
