You may have heard people talking about making money with cryptocurrency and wonder, how it can be done.
Cryptocurrency is a hot ticket to the financial market in modern times. Everyone is looking to buy a digital currency that they cannot only use as a liquid asset but as a storage of value too.
But before rushing into cryptocurrency there are certain things that you should understand. Cryptocurrency may be attractive, but it is a new currency as compared to fiat and has its challenges.
So, let us find out what crypto is all about and how you can safely invest in it.
What is Cryptocurrency?
You must be aware of making online payments through fiat which gives you relief from physically visiting a bank. But there are times when you are not even able to make these online transactions in fiat.
Here comes cryptocurrency.
Cryptocurrency is a digital currency that you can use for online purchases and investments. Cryptocurrencies exist online on blockchain technology and run on a peer-to-peer network.
The transactions of cryptocurrency are stored online on a public distributed ledger. You can buy cryptocurrency through a crypto exchange using fiat or exchanging your existing cryptocurrency, for instance – Ethereum for Bitcoin.
Carl Runefelt, alias, The Moon, is a global crypto leader who has invested in more than 350 crypto startups.
He says, “Cryptocurrency is recognized across the world and is not affected by exchange or interest rates. It would also provide individuals living in economically fragile nations more stability and predictability.”
Why You Should Invest in Cryptocurrency?
The world is gradually moving toward the mass adoption of digital currencies. Cryptocurrency is becoming part of people’s lives as multiple corporations are accepting payments in cryptocurrency.
At present, Bitcoin is the world’s largest cryptocurrency by market capitalization among the existing over 18,000 cryptocurrencies. The protocols of Bitcoin are designed in a way to limit its supply and provide inflation control.
Would not it be cool if you hold a currency that offers an inflation hedge?
On the other hand, you can see many people making a lot of money with cryptocurrency. You can use cryptocurrency as an asset in which you can invest and earn profits.
According to Carl, “Crypto is a game of patience. You cannot look at the daily chart and put too much significance to it. Holding long term will make you money in Bitcoin and crypto in general.”
Benefits Offered by Cryptocurrency
Cryptocurrency is not all about making payments or investing money. It offers multiple benefits including:
- Since cryptocurrency is a decentralized currency, it operates free from the influence of a bank or government.
- You can make crypto transactions at any time anywhere in the world.
- Cryptocurrency is available 24/7.
- You can hold your cryptocurrency investment as long as you want.
- Crypto transactions are quick and have extremely low fees as compared to fiat transactions.
- You run your cryptocurrency yourself making you the sole owner of everything you have.
- You can invest in as many cryptocurrencies as you want to diversify your crypto portfolio.
Important Tips to Remember
Regardless of all the benefits offered by cryptocurrency, there are a few things that you should remember before investing in cryptocurrency.
If there is one word that is often associated with cryptocurrency, it is extreme volatility.
Cryptocurrencies are extremely volatile, and you can lose all your money within hours.
Carl, on his YouTube channel, The Moon, says, “To make huge profits from investing in cryptocurrencies, one must carry rigorous market study and notice the factors which affect a particular cryptocurrency.”
Here are a few things you should know:
- Never invest all your money in cryptocurrency.
- Invest what you can easily afford to lose.
- Try to diversify your crypto portfolio. Avoid investing only in one cryptocurrency.
- You should never make decisions in crypto based on short-term changes because cryptocurrency is a game of patience.
- Always do market research to know the facts about a particular cryptocurrency in which you want to invest.
- Never believe in the market hype about a cryptocurrency as this will not be beneficial.
- Keep your cryptocurrency stored in an offline wallet and never share its key with anyone.
Some Popular Cryptocurrencies
Here are some popular cryptocurrencies that you can invest in:
- USD Coin
The road to building wealth in cryptocurrency is slow and steady. You would be going through many ups and downs in this journey.
If there is only one thing that can help you, it is patience with cryptocurrency.
Cryptocurrency is gradually becoming popular worldwide, and its adoption is inevitable. People are buying cryptocurrencies quickly for safe investments and making money.
So, as a beginner, you can follow all these above-mentioned tips when investing in cryptocurrency to stay safe.