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Everything You Need To Know on How to Invest in Crypto-Currencies

By Christy Bella | August 4, 2020

Table of Contents

What do I need to know before investing in Cryptocurrency?

If you have been thinking about investing in cryptocurrencies, it is not too late. You just need the proper set-up and some basic knowledge to get started.

So we are here to help you start investing in what is being called the currency of the future.

Know your Market

You must have heard those incredible stories about people making millions almost overnight by trading bitcoins.

And you also know those horror stories. About investors who lost everything they had, by buying-in on a bubble just before it bursts!

So what separates the winners from the losers? Just like the stock exchange, the pivotal point in cryptocurrency investing is timing. You have to speculate the market trend of a particular cryptocurrency. If you can time your investment right, then you can get the maximum profit margin.

Before you start investing, take some time to observe and analyse the market fluctuations. Choose the currency you want to trade-in. If you are just starting out, then it is better to invest in only one currency for simplicity’s sake. But if you have someone experienced guiding you, then you can invest across several cryptocurrencies to spread out and minimise the risks.

Plan your investments, so you do not suddenly go in over your head on a sudden impulse. You will need thorough research to win big in cryptocurrency investments.

The Set-Up

So you have decided what cryptocurrency to invest in, and how much to buy. Now all you need are the right tools.

To start investing, you will need a digital cryptocurrency wallet. A secure connection to the Internet is mandatory. You will also need an account in a cryptocurrency exchange and a method of payment. In some countries, you might need your personal identification documents as well.

Getting a Cryptocurrency Wallet

The first step to investing in cryptocurrencies is to get a digital wallet. It is a software app that will turn your money into digital currency and store it for future use.

These wallets will give you quick and easy access to streamline all transactions. But on the downside, all your assets are in the hands of a third party. So you must do a thorough background check of the wallet you chose, before transferring any funds into it. You need to pick a trustworthy and secure option to store your holdings.

If you are planning to invest a large amount of money, then security is of paramount importance. Offline hardware wallets offer maximum safety. You can store your private key on these physical hardware devices, which can not be hacked. Ledger and Trezor are the leading hardware wallet manufacturers.

Connect Your Bank Account

Before you start buying and selling cryptocurrencies, you need to connect your bank account, credit card, or debit card. They will all function the same way. But the rates might vary depending on your preferred mode of exchange.

If you link your bank account, the transactions take longer. But on the upside, you can deposit the money from selling your cryptocurrencies, directly into the account. This is ideal if you are moving around a large sum.

Debit and credit cards will let you make transactions almost instantaneously. But in most exchanges, there is a cap as to how much you can buy with a credit card. In some of the leading exchanges like Coinbase, you can use a debit card only to buy, but not sell cryptocurrencies. You can check out the crypto exchange rates at Crypto Head.

Join a Cryptocurrency Exchange

A cryptocurrency exchange is a virtual marketplace. Here you can buy and sell cryptocurrencies for money. Though they all function the same way, different exchanges have different rates, security protocols, reputation, and reliability. You can also sign up Bitcoin Profit and give a try.

Research your options well before selecting an exchange.

Risks and Cautions

Congratulations! You are now ready to place your first order. Before you start buying the cryptocurrency in earnest, take a moment to step back, and review your safety measures. Any digital currency is susceptible to hacking.

It is best to prepare for the worst. So you will want to put in as many layers of protection as you can to safeguard your investments. There are some simple ways to minimise the risks.

Secure your internet connection – This is a no brainer. If you are moving assets digitally, then you have to secure your connections. Use firewalls and a trusted antivirus. You can also opt for a high end paid VPN.
Use a Cold Wallet – A cold wallet is a hardware wallet. It can store your private keys and is offline. So a hacker cannot get into it and steal your coins. But if you lose the wallet, there is no way to get your cryptocurrencies back.
Spread your holdings – If you have a large cryptocurrency holding, then do not keep it in one place. Spread it out over multiple wallets. If one of them is hacked or lost, you will still have the others intact.
Avoid simple passwords – This is a common mistake. Do not use the passwords you are already using on other sites. Most people reuse the same password everywhere. This poses a security risk. A hacker can retrieve that password from a less secure website, and then use it with impunity. Always use a two-factor authentication with unique passwords.
Use backups – Backup both your cryptocurrencies and your private keys after every transaction. If your hard drive fails, you will still have access to your investment.
Do not talk about your investments – The less attention you draw to your investment, the better. Do not share your investment details or volumes with anyone. Such information has a way of finding itself into the wrong hands. If scammers or hackers realise that you have a sizable stake, then you will become a prime target.
Small trades – Do you not start off by trading massive amounts. Smaller transactions make sure that you stay under the radar. The less undue attention you draw to yourself, the better.

If you keep these points in mind, you can start investing in cryptocurrencies. Remember to do your research on the market before you commit your capital.