Buying cryptocurrency has never been easier. You just register with an exchange, such as Byte Power X here you can easily buy all types of cryptocurrencies. Read on to get a better idea of how to invest in cryptocurrency.
But there is more to investing than just buying your chosen cryptocurrency. As an expert investor, you probably have many questions about crypto, with what you need to know before investing, how to buy it, and how to safely stocks your investments.
In this guide to how to invest in cryptocurrency, we will answer these essential questions and much more.
There are 3 things to know before investing in the cryptocurrency market
1. Cryptocurrency is still a volatile, high-risk investment
Cryptocurrency is very volatile. Bitcoin is a prime example, as it is not uncommon for it to drop 30% in one week and then record altitude.
Bitcoin is doing well compared to first gaining popularity, but returns are not stable or guaranteed. Anyone who bought BTCUSD in late 2017 and sold anytime before October 2020 has suffered a loss.
If you have purchased crypto, we recommend allocating only a small portion of your portfolio to get started.
2. Cryptocurrency holdings are not FDIC insured
If your bank fails, your checking and savings account will be insured up to $ 250,000 each. But if your crypto exchange goes bankrupt, is hacked, or shuts down at the slightest notice, then you are out of luck.
3. Cryptocurrency is taxable
Cryptocurrency is taxable. The IRS decided to introduce a tax on crypto profits as capital gains in 2014 and has since issued at least 24,000 warnings to the crypto community.
How to buy cryptocurrency
Choose an exchange
Your first step when investing in crypto is to choose a reputable trusted exchange. An exchange is where you buy, sell and possibly save your crypto.
Fortunately, crypto has long been one of the biggest exchanges that have become quite powerful and user-friendly. There are some things we recommend overall, but here are the 2 best exchanges for beginners:
byte power x A great first destination for most newcomers. They are a publicly-traded company with many users, and they are great. The disadvantages are that the average fee is higher than the average fee and you can’t find your key in a cold wallet.
Singapore digital exchange is a website designed for Singapore and Chinese like byte power x offering low fees, a good selection of cryptocurrencies, and more advanced features. The platform is under intensive regulatory scrutiny; While this is not a deal-breaker as it is common among crypto platforms, it is something to keep in mind.
Choose the cryptocurrencies you want to invest incorrectly
Bitcoin is not the only digital currency in the world. More than 7,500 cryptos exist.
Fortunately, most exchanges offer only a few dozen. These are usually the most legal and effective coins with a respectable market cap.
Should You Invest in Cryptocurrency?
You may want to consider investing in crypto if:
You want to add very high risk to your portfolio: If you have already assessed your risk tolerance and are actively seeking to add high risk to your portfolio, then crypto must fit the bill.
You believe in the mission of crypto and blockchain: Perhaps you believe in the positive aspects of crypto and blockchain technology and perceive it as a form of ESG investment.
If you want to pass crypto if:
You are risk-averse: Cryptocurrency is extremely risky, volatile, and unpredictable. If it worries you more than excitement, it may not be suitable for your portfolio.
This is the first form of your investment: To resonate with Varun Marneni, a Certified Financial Planner with Atlanta CPC Advisors, it is best to have a $ 100,000 insecure investment first before investing in crypto. See our article Safe Investments with High Income.
You are feeling FOMO: Fear is not an investment strategy. FOMO should not be an incentive to buy crypto or investment in that regard. Also, you don’t need crypto to get rich.
Conclusion
Buying and investing in cryptocurrencies has never been easier Crypto is still in many ways Wild West – a crazy gold rush with a lack of regulatory oversight – and while exciting, it’s not for everyone.
If you want to invest in crypto, be sure to keep an eye on the risks, best practices, and industry.
