Cryptocurrency seems to be all the rage these days. I’m sure you must have heard stories of people making it big with just a few investments in cryptocurrency. And then there are the people who have also lost their money in the same cryptocurrency.
So what’s the real truth? Should you be investing in cryptocurrency?
Well, cryptocurrency is just like stock, only a little more volatile. You can earn good money from investment, and you can even lose your money. The secret lies in understanding how to minimize your risk to maximize your earnings.
How to Invest in Cryptocurrency
If you are looking to invest in cryptocurrency, here is what you should know:
Your Investment Amount
The first thing you should consider when considering investing in cryptocurrency is how much do you want to invest? The answer to that is to invest the amount is are okay with losing.
We don’t recommend investing all your savings into cryptocurrency. A good idea is to invest only 5% of your savings into cryptocurrency. So, even if you lose, it doesn’t turn into a crisis.
Once the money starts rolling it, you can put back the profits into more investments.
The rule of thumb for investments is to maintain a diverse portfolio. Look for the best brokers for trading stocks if you want to put your money into both funds and cryptocurrencies.
Research Cryptocurrency experts
There are quite a few cryptocurrency experts out there who have made millions through their cryptocurrency investments. Do a little internet research on them. Follow them on social media.
This will give you a good idea of how much to invest and what to expect. If you can, arrange an interview with them to discuss the best approach.
Look up Roger Vers. He is known to be the Bitcoin Jesus. Vers was able to grow his financial worth to more than 52 million dollars through bitcoin investments.
Decide your cryptocurrency
Right now there are over 1600 cryptocurrencies in the market. Surprised? You should also know that the number is expected to rise in the near future. Bitcoin is the market leader followed by Ripple, Ethereum and Tether.
Which one do you wish to invest in?
Some factors to take into consideration are its functions, history and how it developed. You should also look into its market capitalization, how long it has been in the market and the problems it solves. Bitcoin is usually the most preferred choice because it has been the market for the longest and it is the most popular of all cryptocurrencies. You can start investing today with Bitcoin Loophole, a trusted platform for those new to the crypto market.
Do Your Analysis
Before investing in cryptocurrency, you need to do two kinds of analysis: fundamental analysis and technical analysis.
Fundamental analysis is a general background of the company. It involves researching the currency, its company, the people in the company, the problems the currency is solving and what they have achieved so far.
Technical analysis is a little more complex. It’s a study of the currency’s performance. You will have to read charts to understand the behavior and trends of the cryptocurrency. In cryptocurrency, technical analysis doesn’t give you a very clear picture because there are a lot of ups and downs with this investment.
You might have to talk to an expert when it comes to analysis. Talk to a friend or a relative who has made some decent amount of money in cryptocurrency.
Your Investment Type
When most people invest in cryptocurrency, they are looking for fast results. This means they are investing for the short-term. There are three kinds of investments: long term, medium and short-term investments. Shorter-term investments are higher risk but often result in high yields if you continue to aggressively follow the market and trends.
Consider the Risks
Right now cryptocurrency is still in its evolving stages. This means there are risks involved, maybe higher than other kinds of stocks and investments. Some countries, like India and China, have even gone as far as banning cryptocurrency trade. Some banks are also blocking trade in cryptocurrency.
Cryptocurrency is a very volatile market. Some lose their value in just a single day. Since there is little regulation for cryptocurrency, chances of hacking are also high. If you don’t know how to invest in cryptocurrency, there is a chance you might be hacked and lose your money. There is also no liquidity for cryptocurrency. This means you won’t be able to sell them conventionally.
Most people shy away from cryptocurrency because there seems to be a lot of risk with this investment. Whether you should invest or not depends is really your call, but I believe that the rapid growth of this form of investment hints on something with great potential.
I recommend investing a small amount of your savings in cryptocurrency. See how it goes. Who knows you could be the next Roger Ver.