When you know more about cryptocurrency, the gray areas that have been casting doubts will become clear. This is probably simple yet often overlooked by hundreds of investors who failed to do substantial research. As a result, they fell short in generating the target investment returns, and the overall experience may be discouraging.
It’s something to learn from for the prospective cryptocurrency traders – doing better would mean going extra in research and studying the market. The white paper of a crypto project may not be enough to start with. There are certain indicators that should be accessed in other resources, such as the company’s website and online articles.
At first, it could be very enticing to join the industry without having sufficient knowledge. This is a common pitfall that’s emphasised in various guides that you might come across. The rule of thumb is to never invest yet until you are 99% sure that the outcomes would run in your favor. It requires time and patience to do an in-depth analysis, but it’s better than being sorry later on.
Basically, knowledge gives you an advantage. But still, bear in mind that the cryptocurrency market does not offer a guarantee of success to everybody. This is highly speculative and unpredictable, and the best way to deal with it is learning more facts, as discussed in the following paragraphs. To make a good start in the world of crypto trading you can take a look at the Bitcoin Era platform for 24/7 support and beginner-friendly software.
How to Buy Cryptocurrency?
The first and most essential step in cryptocurrency investing is how to buy the asset. It does not require technical knowledge, but you have to study your choices. There are multiple options for this purpose, and they are briefly explained in the following.
Traditional Finance Apps
For traders who are looking for the easiest way to buy cryptocurrency, traditional finance apps might be the best choice yet. They are service providers that have recently adopted the technology. One example is PayPal that allows users to purchase four different cryptocurrencies. There are other choices that have their own protocols, too. Essentially, the practical advantage of buying crypto through these apps is the ability to trade or invest for profit in US dollars.
Traditional finance apps are a good way to start buying crypto, but they offer limited choices. This limitation is addressed by centralised exchanges that provide more options and better functionality. These platforms are managed by a single company, and they generally offer certain protections that many investors are glad to welcome. Some of those perks include insurance for cybersecurity breaches and regulatory safeguards. Likewise, centralised exchanges usually guarantee intuitive user interfaces for the benefit of new crypto investors.
There are investors who prefer using exchanges that match their decentralised beliefs and aspirations. This goal is served accordingly by the decentralised exchanges that allow peer-to-peer crypto transactions without intermediaries. However, there are pros and cons to using this platform. Since there is no central authority, hackers may attack the system and could result in losing funds. The lack of a strict onboarding process also exposes users to other security threats. Likewise, decentralised exchanges have more complex user interfaces that may not be ideal for traders who are used to traditional finance applications.
Non-fungible tokens (NFTs) have become popular in recent years. They are commonly used for a wide variety of applications, including digital asset access and ownership. For traders who want to try something new, there are several marketplaces that allow purchasing NFT collections and artwork. One best example is OpenSea, where users can buy Ethereum wallets to buy NFTs.
What is the Best Cryptocurrency to Invest in?
After knowing how and where to buy a cryptocurrency, the next important task is determining which among the thousands of choices would you go for. This is a personal question that’s based on the investor’s interest, financial goals, and risk appetite. Given that this investment platform is relatively new, there is no single formula to evaluate its profitability. However, there are several methods to analyse whether a project would earn returns in the long run. You can start by investigating the team behind the project and the community working on its protocols.
Once you have gathered relevant information, you might consider those choices with proven stability. Bitcoin is by far the longest-standing and most secure cryptocurrency today. This crypto started the digital finance revolution and now has the highest market cap of over $1 trillion as of mid-October 2021. It has a healthy developer ecosystem that is constantly upgrading the network to better serve the users. Bear in mind, however, that most cryptocurrencies and tokens experience price volatility, and this can be a risky choice for retail investors.
After Buying Cryptocurrency, What’s Next?
Upon joining the crypto market, make sure that you never give out your private key or recovery phase that’s created when you open a wallet. This device is used to store your digital holdings, and other variations allow users to buy, sell, and transfer such assets. The private key usually consists of an alphanumeric string that secures cryptocurrency and proves ownership. While the recovery phase is the human-readable version of a private key that can help in reclaiming custody over crypto accounts when the wallet passwords are lost or forgotten.
Another essential matter on security is setting up a two-factor authentication within crypto wallets and apps. This feature would provide an additional layer of protection to your log-ins. Likewise, if you have purchased large amounts of cryptocurrency that you plan to hold long term, the best idea is to have hardware wallets that guarantee the safest storage solutions. Such devices remain offline, thus reducing the vulnerability of assets to possible hacking attacks.
As the crypto industry continues to flourish, investing in cryptocurrency becomes more convenient and secure. This new technology offers various opportunities that are driving the economy forward and benefiting individual and institutional investors. However, before joining this market, you should recognise the risks associated with such an investment. Doing enough research and consistently monitoring the market would always prove advantageous.