How to Invest in Cryptocurrency

Fortunes have been made and lost on cryptocurrency. 

From turning a few bucks into millions to losing an encryption key that would unlock life-changing money, it seems everyone has a story.

The world has gone crypto crazy. 

This guide will educate you on how to invest in cryptocurrency. 

We’ll give you a few key considerations to ponder before diving into crypto investing. 

In the end, we simply hope to help you make an informed decision. 

Let’s get started. 

What is Cryptocurrency?  

Cryptocurrency is a form of digital currency used as a medium of exchange and speculative investing. 

Crypto is designed to work through the blockchain and needs no intermediary or central authority—such as a financial institution or government—to function. 

Cryptocurrency is considered virtually counterfeit-proof. Each block of information that makes the chain must be approved by every member of a transaction. 

Cryptos also offer near-complete anonymity, as they include no information leading to a user’s offline identity. 

Each crypto owner stores their cryptocurrency in a “wallet” and is the sole owner of the key that unlocks that wallet. Unfortunately, losing that key also means losing the wallet’s contents. 

Cryptocurrency as an Investment Tool  

Bitcoin is, by far, the best-known cryptocurrency, but there are thousands on the market. 

Originally designed as a method of payment, cryptos have become one of the favorite investments for those with a taste for speculation. 

As cryptocurrencies have become more mainstream amid rising demand, the price of some coins has skyrocketed. Some prices have remained high, and some have plummeted. 

The wild stories of success and failure floating online are sometimes all that people use to guide their investing in crypto. This can put the investor at risk of catastrophic loss. 

Timing is everything for successful investing. Do your research, learn your cryptocurrency, and stick to a plan. 

Ignore the hyperbole and invest in a manner that makes you comfortable. 

As with all investments, proper timing and discipline can lead to profits. 

How to Invest in Cryptocurrency: Step by Step 

Investing in cryptocurrency is fairly easy. Successful cryptocurrency investing takes much more time and effort. 

Some steps to follow when considering how to invest in crypto include:

  • Doing proper research.
  • Creating a plan of attack.
  • Choosing a reputable crypto exchange.
  • Securing your investment from loss or theft.

Research and Education

Each crypto was created differently and for different purposes. They have their own story. 

Read the origin story of the cryptocurrency you’re considering and understand it thoroughly before risking your hard earned cash. You can find information on:

  • Who created the coin
  • Why they created the coin
  • The market cap of the coin
  • How many coins were and will be created
  • The trading activity and volume of the coin
  • The highs and lows of the coin’s value

The more you know about your potential investment, the better decision you can make. 

If a crypto seems created by a fly-by-night source, it might be wise to stay away. 

As with anything, use common sense. If something sounds too easy or too good to be true, it probably is. 

Create an Investment Plan 

Great investors tend to do several things once they’ve settled on making an investment:

  • They decide how much to invest.
  • They determine the price point to enter the investment.
  • They know the maximum loss they’re willing to take.
  • They establish the profit mark to sell.

Whether you choose to follow these or other rules, fix your rules and stick to them. 

Great investing takes time and discipline. It sometimes means leaving a bit of profit on the table or taking a bit of loss. 

The key is to survive the investment—good or bad—and live to see the next one.  

Don’t worry about the could’ve, would’ve, should’ve. You can’t change the past, and you can’t see the future.

Choose a Cryptocurrency Exchange

The advent of crypto trading has led to the establishment of cryptocurrency trading exchanges.

A crypto exchange offers a platform to buy and sell cryptocurrency.   

Due diligence is important when choosing your exchange. You will have to transfer your crypto holdings into the exchange to trade them. 

You must be as sure as you can be that you will be able to:

  • Keep accurate reporting of your trading.
  • Buy and sell freely.
  • Adhere to the rules of your country.
  • Liquidate and return your assets into your control.

There are many reputable exchanges. There are also some exchanges that toe the line of legality. Remember that governments are still catching up with creating regulation, and what may seem OK today may be scrutinized tomorrow. 

Make sure you choose wisely.

Securing Your Investments 

Keeping your wallet key safe may be the most important factor in crypto investing. 

It doesn’t matter if you know how to invest in crypto if you cannot access your account and holdings.

Create a series of accessible redundancies. Know the breadcrumbs that will lead you back to that password or that key. 

Keep it to yourself. Anyone with access to your key has access to your crypto. 

The Importance of Managing Risk  

A wise person once said, “Don’t put all your eggs in one basket”. 

Crypto investing may seem like a way to get rich quick, but the sometimes extreme volatility of crypto prices makes it far less than a sure thing.  

Investing everything in crypto may not be the wisest choice.

Many shrewd investors choose digital money such as bitcoin but also own tangible assets to anchor their portfolios. 

One preferred way to convert digital assets to physical assets is the Gold IRA or Silver IRA

The precious metals IRA is a self-directed retirement account. You choose what you want to invest in, including physical assets such as eligible gold and silver, bars and coins. 

A Gold IRA may give you:

  • A tangible asset that you can hold in your hand.
  • A hedge against inflation.
  • Purchasing power protection.
  • True portfolio diversification.

If you are 59 ½ or have a 401(k) from a previous employer, you can roll over that plan into a Gold IRA. 

The IRA rollover is tax-free and penalty-free. Seasoned precious metals firms such as Advantage Gold have been walking people through this process for almost a decade. 

Our highly trained team will show you how easy it is to diversify your portfolio with physical precious metals that you own in your IRA. 

Tracking and Evaluating Your Investments 

One truism is that you can’t go broke by taking a profit. You can certainly go broke by letting a small loss become a catastrophic loss. 

Crypto prices can move very quickly. You must stay aware of where you are in a trade and adhere to the strategies and benchmarks you set before entering the market. 

The numbers don’t lie. They will tell you everything you need to know. 

Pay attention to the trends and patterns of price fluctuations. 

Stay steadfast in executing your plan, and stick to it. 

Staying Updated and Evolving 

Investing in cryptocurrency can be lucrative and fun.

One key to success is having your finger on the pulse of the market. 

There are volumes and volumes of accessible information on cryptocurrencies. Find sources that you trust and that prove themselves as accurate. 

As the nature of crypto changes, change with it. Stay updated with the latest news, and by all means, find the answers that you are looking for. 

Enjoy your crypto ride, but stay diversified! 

Advantage Gold is happy to be your source for physical gold, silver, platinum and palladium—whether in an IRA or for direct delivery to your doorstep. No matter which you choose, we will be with you every step of the way. 

Call us today or click the link and tell us how to contact you. We look forward to helping you truly diversify your portfolio. 

Speak with you soon!

Tags: , , ,

Category |