Crypto investments are a good way to generate income taking advantage of crypto piece volatility and catching the wave of its fluctuations. Successful investors have made many mistakes before becoming rich, and the main, of course, is the ability to learn lessons. In this article, we will tell you four main things to know before making your first step in crypto investments.
What Cryptocurrency to Invest in?
First of all, you need to understand what crypto you will buy and for what purpose. If you want to trade crypto, pick the assets with middle and small market capitalization because they are more sensitive to market trends and can bring higher profits. If you want to invest long-term, consider buying the market leader and hold them for a long period of time and then sell cryptocurrency when the new all-time high is reached.
When picking a crypto asset to buy, pay attention to:
- market capitalization;
- trade volume;
- real use cases;
How Much to Invest in Cryptocurrency?
That is another important question before you start. Better to allocate 10% of your monthly budget and no more than that. The crypto market is highly volatile, so asset prices may change dramatically and not in your favor. So if you invest all the money you have, you risk losing them all. Invest as much as you can ford to lose.
What Strategy to Pick?
You should determine trading methodology and strategy. For that purpose, you should try all the options with a small amount of money and understand which of them fits your character. For some people, for example, long-term buying assets is impossible because they need a dynamic strategy, while other people do not like to take a risk and prefer to buy and hold coins, having more time for analysis and reflection.
What Platform to Choose?
Many beginners wonder, “How can I invest in cryptocurrency if I have only fiat money?”. You can buy digital coins with cash on centralized crypto exchanges such as Binance, KuCoin, and WhiteBIT. They allow adding your bank card and support fiat-crypto pairs, so you can easily deposit and withdraw cash.
If you are looking to purchase cryptocurrency with traditional money, the first step is creating an account on a crypto exchange and completing any necessary verification processes. Then, head to their “Buy” or “Trade” page and select the desired cryptocurrency. Follow that up by identifying what fiat money (USD or EUR) will be used for this transaction – enter your chosen amount of fiat currency and watch as it translates into its equivalent sum of cryptocurrency. Before confirming your purchase, check the transaction details thoroughly, including any applicable fees and current exchange rate. To complete the order, you must send a designated amount of fiat currency to the appropriate account; once this is done, your purchased cryptocurrency will be transferred directly into your wallet.