How to invest in cryptocurrency? 6 important points
Despite the periodic failures of the cryptocurrency market and gloomy forecasts for the rate of bitcoin and other altcoins, the number of those wishing to invest in digital assets in 2018 has not decreased at all, compared to the cryptoboom of last year.
Especially for the readers of Fortrader magazine, we have selected six important points for profitable investing in cryptocurrencies.
Moment #1: Don't forget about bitcoin
Despite the fact that bitcoin today looks like a "prehistoric dinosaur" against the background of other young cryptocurrencies - expensive, cumbersome, slow - it is still the means of measuring the success of altcoins.
If you have problems with buying any other cryptocurrency, you can buy bitcoin almost everywhere now, and then you can easily exchange it to the altcoin you need.
Moment #2: Use several proven exchanges
The number of cryptocurrency exchanges is growing like mushrooms after the rain, but we recommend only using proven trading platforms.
As we said before, you can buy any cryptocurrency for bitcoins - the altcoin to bitcoin exchange rate is called bitcoin pair. But the set of traded cryptocurrencies on each exchange is different, so for maximum coverage of investment instruments, it is best to register on 3-4 cryptocurrency exchanges from among the top ones.
After registration and verification, you can buy or sell any cryptocurrency, and belonging to the top exchange will serve as a guarantee of its reliability.
Moment #3: Don't forget about diversification
Most cryptoinvestors, especially beginners, prefer to invest their money in 2-3 assets and then sit and wait for their growth. Not to say that this tactic is bad, but it justifies itself if you understand very well the principles of price changes of these particular coins and know almost everything about these cryptocurrencies.
Small investments seem to be more optimal, for example in 10 or even better in 20 cryptocurrencies. After some time, you will learn more about them and have a better idea of their future prospects. After that, you can increase the volume of investments in promising coins.
Moment #4: Take the security of your account seriously
Your account on a cryptocurrency exchange is like a bank account. You don't shout about your bank account in every corner, and it's unlikely that your bank card pin code is a "tricky" combination of the numbers 1111. Each marketplace has a number of measures designed to protect the customer's account from unauthorized access.
Don't be lazy, use two-factor authentication and other means to keep yourself safe. Several layers of protection for your account will make it virtually inaccessible to fraudsters.
In addition, there are many copycat cryptocurrency exchanges on the web. Be careful not to give scammers your money. Read our article on this topic Cryptocurrency exchange or scam site?
Moment #5: Money loves silence
The first return on investment - the soul sings and urges you to share it with someone. If you do this on the Internet, you can easily become a target for hackers.
If you share this with acquaintances and friends, there are two whole negative things:
First, in their eyes you will immediately become an expert on cryptocurrencies who knows everything and can answer any question. So get ready for endless consultations and resentment of refusals to conduct them. Oh, and guess who will be to blame if the first experience of your friends and acquaintances, inspired by your example, turns out to be unsuccessful.
Second, it can make you a target not for hackers, but for the most real criminals. Remember the robberies of famous cryptobloggers, who publicly announced their profits.
Moment #6: Expect the best, but prepare for the worst
Underneath this phrase is classic advice, relevant for investing or trading in any, without exception, financial markets - invest or trade only money you can afford to lose.
Despite the fact that this rule is so old that it is "overgrown with moss," it has not stopped working. It's enough to remember many distressed investors who took out loans to buy bitcoin at the peak of its value at 20 thousand dollars.
And if in the foreign exchange market the risks are high enough, in the cryptocurrency market they are even greater.
Cryptocurrency rates are far from stable - they can increase the invested funds by several times, and you can lose them in a matter of minutes.
Oh, and don't start investing, as currency traders say, "the whole cutlet". Start with small amounts - if the investments turn out to be the right ones, gradually increase their volume, but never go over the limit you set for yourself.
It is always worth remembering that investing is not a game. It is a difficult and painstaking work, which requires not only material investments. If you are patient, cautious and follow our recommendations, the cryptocurrency market will surely share its profits with you.
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