The appearance of bitcoin in 2009 did not bode well for anything unusual. It considered an interesting phenomenon, but no one interested in how to invest in cryptocurrency. Soon the situation changed radically, the unremarkable creation of Satoshi Nakamoto gave impetus to the emergence and rapid development of a fundamentally new market – the digital asset market.
Respectable investors and ordinary speculators rushed into a new niche. Some invest in digital assets, others strive to make money quickly and create excitement.
If you are planning to invest in cryptocurrency, you should familiarize yourself with the key features of the market and develop your own strategy. So, the order of actions of a novice investor.
Allocate Cryptocurrencies a Small Percentage of Portfolio
Any market driven by fear and greed. Observing the meteoric rise of popular cryptocurrencies, it is extremely difficult to resist the temptation. However, what is growing rapidly is often falling just as rapidly.
That is why investing a lot of money in cryptocurrency is not worth it. Experts agree that it is undesirable to allocate more than 5-10% of the portfolio to digital assets. The future of cryptocurrencies is still uncertain, so investing in them should be very careful.
Choose Your Cryptocurrency
It is even more difficult to do this than to determine the amount of investment. More than 7,000 cryptocurrencies now known, and some of them have already ceased to exist.
Bitcoin is the leader in the cryptocurrency market. It is he who attracts the greatest attention of all market players. It has no serious competitors yet, and even the second most popular Ethereum occupies less than 20% of the market.
This is quite logical that most of the funds should be invested in Bitcoin. Although there are other promising cryptocurrencies on the market. However, it is worth remembering that all digital assets are speculative by definition. Before investing some of the funds in the coins you are interested in, study what is Polkadot coin and other assets from the TOP-10 are.
Digital assets are not bank deposits, precious metals, or stocks. They do not charge interest and do not pay dividends, but there is always a non-zero probability of losing everything.
Select a Marketplace to Buy Cryptocurrency
Decentralized assets cannot be purchased from a bank or investment brokerage firm. They can only be bought, sold and exchanged on cryptocurrency exchanges like Kracken, Gemini, e-Toro. In addition to the actual operations with digital coins, such sites often provide storage services.
How to Store Cryptocurrency
To store digital funds, there are special storage programs or wallets. Your coins as such will not be in them, they remain in the blockchain. And the wallet needed to confirm your rights to a specific amount and the ability to dispose of it. The wallet stores your keys and generates a signature when making expense transactions.
There are several types of wallets:
- Hardware wallets. Small physical devices that connect to the Internet as needed.
- Desktop wallets. This software is for computers and laptops.
- Mobile applications. They installed on a smartphone and access to your assets will be possible from anywhere in the world.
- Online wallets. They hosted in the cloud and accessible from any device. Objectively, this is the most vulnerable storage possible.
- Paper wallet. Just a sheet of paper with printed keys or a QR code.
Choosing a wallet is your personal balance of ease of access and security of your funds.
Take Сare of Cybersecurity
You have chosen a cryptocurrency, created a wallet for it and purchased several coins. For more security when making transactions, it is better to use a VPN. VPN encrypts your data, making it much more difficult to hack your accounts. This is especially true for owners of large sums.
Buckle Your Seat Belts and Get Ready to Fly to the Moon
Digital currencies are highly volatile and poorly predictable. Just keep this in mind and be prepared for mind-blowing ups and downs. And never invest in cryptocurrency more in high-risk assets than you are willing to lose.