5 Steps to Start Your Crypto Investment
And enter the cryptosphere
For those of you who have researched enough into crypto and are ready to put some money aside, getting started can seem like a complicated process. Once you’ve decided a few major points, however, actually getting into crypto is pretty simple. In this article I’ll outline five basic steps to help you get started on your investment.
Choose Your Coin
The first thing you need to decide is what coins you want to invest in. Do you want to buy big-name coins like Bitcoin and Ethereum, or do you want to invest in altcoins? Some people swear a diversified portfolio of altcoins will give you the greatest returns, while others promise that the only worthwhile investments are in the big market cap coins. There are pros and cons to both types of investments, so it might be a good idea to diversify your portfolio, and get a mixture of big-name coins in addition to some altcoins that interest you. If you want to invest in an ICO, make sure you do extra research into the project to make sure you choose a legitimate coin.
The next step is to decide where you want to buy your coins. Coinbase (and their exchange platform Coinbase Pro) is probably the easiest and most trusted way to convert fiat currency to basic cryptocurrency like bitcoin, ethereum, litecoin, and bitcoin cash. If you’re interested in altcoins, exchanges like Binance, Poloniex, or Shapeshift offer hundreds of different coin options. Pay attention to fee rates and the reputation of the exchange you use (click here to learn more about popular exchanges)
How Much Should I Invest?
Closely associated with the choice of coin is the decision of how much money to invest. Crypto is a high risk, high return world, so while you can make an amazing return on investment with crypto, you can also suffer major losses. Let common sense be your guide. Only you can decide how much money you want to put into crypto, but a moderate way to get into the high risk/high return world of crypto is to contribute a small portion of your net worth that you can afford to lose.
Determine Your Strategy
HODL
There are a variety of ways to invest in cryptocurrency, and you should choose a method that works best for you. The most popular way to invest is probably the buy and hold approach, or “hodl” (reddit-speak for hold on for dear life, and refers to not selling your crypto even if the market takes a turn for the worse). This might be the best approach for someone who wants crypto but doesn’t want to stress over trends or trading.
Trading
Another approach to investing is trading. A variety of exchanges also allow crypto users to easily trade coins. Exchanges like Coinbase Pro, Binance, and Bitfinex are popular platforms to trade cryptocurrencies, from bitcoin to the most obscure altcoins. With trading, the mentality is buy low, sell high, and some traders have made incredible gains on their coins. Trading has the highest possibility for returns for crypto investors, and accordingly has the highest potential for risk. If you’re attracted to the thrill of making a good return on your investment and can embrace the very real possibility of loss, trading might be a good fit for you.
Mining
Another approach to investing in crypto is mining, where you buy computers and other crypto mining equipment to mine a coin for a lower price than buying it. Mining is an important part of the crypto economy, and can be very profitable, and appeals to the mentality of those who want to strike gold. Mining also appeals to the technologically savvy, as setting up a mining rig is a complicated and difficult project. Since dealing with equipment can be a major headache, cloud mining and hosted mining are popular alternatives to at-home mining.
How Do You Store Crypto?
Once you’ve investing in crypto, you’ll want a place to store them. You can’t send crypto to a bank to stay safe, and there are a lot of crypto hacking schemes out there, so consider keeping large amounts of currency stored offline. Whether you decide to invest in a hardware wallet or use a paper wallet, your currency is likely much safer if you keep it in what the industry calls “cold storage,” which just means it’s offline. Only keep the amount you want to trade in a “hot storage,” or an online wallet or exchange. Think of cold storage like a savings account, and hot storage like the wallet your carry around everyday. It’s normally a smart move to only keep money in your hot wallet that you’re actively trading with. You might want to seriously consider creating backups of all your wallets as well, in case something happens.
Wallets come in many different shapes and sizes. Some, like paper wallets, just store your public and private keys. Other wallets (like software and hardware wallets) are more complex. These wallets can show you your balance, help you send transactions, and create a recovery seed for your private key (a random phrase of 12 words or so to help you recover your private key if you lose it). (click here for a more detailed explanation of private and public keys)
Looking to the Future
As you look forward to increasing your crypto investment, you might want to consider ways you can easily see and manage your portfolio to help you use your crypto in the smartest way you can. Your chances of maximizing returns increase if you stay on top of trends and major price changes. As you become comfortable with one strategy of crypto strategy, you might consider branching out into another.
Neuryx Club
Cryptocurrency investment is an exciting world of opportunity, growth, and potential, and represents the future. Entering the cryptosphere is as much about learning as it is investing, and the important thing is not to invest more, but to invest smarter.
Neuryx Club is an AI-powered crypto trading assistant that offers exclusive analytics and advanced trading tools to help you stay on top of your crypto game and trade smarter.
The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
