Investment is the key to building wealth over the long term. But you need to choose the right asset that can offer you excellent returns for your investment. The contemporary market is bustling with a wide range of investment assets, ranging from bonds, stocks, currencies, and commodities. Then, you have the new emerging asset class, cryptocurrency, that has stirred both speculations and controversies all around. A major reason to invest in assets like cryptocurrencies is that crypto has shown to offer way higher returns in comparison to traditional investment assets.
Crypto market reached an inspiring peak of $3 trillion in 2021, leading to ATH for several cryptocurrencies. But, 2022 has been overall rough for the crypto industry; with 3 crashes in the same year, the crypto market is currently hovering around little over $700 billion. However, crypto experts have predicted that the crypto market is poised to touch $6 trillion by 2026. Thus, the current plummeting crypto prices offer a great opportunity for aspiring crypto investors to buy crypto now at low prices and sell them at high prices a few years later.
However, crypto is a highly volatile and complex world. Thus, you need to be extremely strategic when you aspire to invest in assets like cryptocurrencies. The post here offers a brief on the tips to keep in mind while you proceed to put your hard-earned money in crypto assets.
Study about the crypto market
The first thing to do here is to take a thorough study on the crypto market. You have to study about the history of the market, the technology behind it, and how things work in the crypto industry. You should also study the future predictions about the crypto market in general. The study will offer you better clarity on whether or not the crypto scape would be suitable for your investment goals. Also read how to buy bitcoin.
Find the right crypto
As of the 4th quarter of 2022, there are over 10,000 cryptocurrencies. It’s not humanly possible to study every one of them individually to find the most compatible crypto to invest in assets like cryptocurrencies.
You will find several articles or lists online about top cryptocurrencies. Make a shortlist of 5-6 cryptos from that list and carry your research. The top aspects to check while finding the right crypto for you are-
- Experienced and knowledgeable team
- Strong use case
- Ambitious roadmap
- Realistic vision and mission
- Easy-to-understand whitepaper
- High trading volume
- High ROI
- Listing on esteemed exchanges
It is suggested that you begin your crypto journey with Bitcoin. There is no denying the fact that Bitcoin is the most expensive crypto and you will find several altcoins at a fraction of price of 1 BTC. But, the key reason why you should put money in BTC is that the crypto fulfills all the major pointers mentioned above. Moreover, Bitcoin has always shown a faster recovery rate.
In regard to price, Bitcoin is the king of crypto, and hence the most expensive one. But, what’s amazing about investing in BTC is that you don’t always need to purchase 1 whole BTC to invest in Bitcoin. The coin is divisible into Satoshis or fractions and you can invest in a few Sats as well. The Sats are more affordable than investing in one whole BTC.
How much to put in?
This is an obvious question when you are about to invest in assets like cryptocurrencies, especially for the first time. There is a common saying in the crypto world – invest only the spare money in crypto.
The crypto world is rife with extreme volatility. While the volatility aspect is the key reason behind the astronomical returns as promised by the crypto market- it’s also the reason why crypto trading and investment can bring you to the streets. Thus, when you have plans to invest in assets like cryptocurrencies, you should only allot the money that would not affect your basic financial stability. Do not allot the money that you have kept aside for retirement or your child’s education or even your luxury needs.
The general rule is to put in 5% of the investment capital when you aspire to invest in assets like cryptocurrencies. However, when you are just starting out, stick to 2%. The first thing to see is whether the crypto investment world would be compatible for you or not. If you find it to be comfortable to invest in assets like cryptocurrencies, you can always increase the investment level.
Find a trustworthy exchange
This is extremely crucial when you are aspiring for a successful experience with crypto investment.
You need to sign up with a crypto exchange to purchase crypto. There are many exchanges that cater to foreign investors but not every such platform allows traders from all countries. Thus, you need to check the geographical restrictions of a crypto exchange before you sign up with the portal.
There are several other pointers to check as well while you are looking for credible exchange to invest in assets like cryptocurrencies –
- The coins listed’
- The security aspect
- Whether the platform accepts fiat
- Is it user-friendly
- 24/7 customer support
- Lower fees
The security part is particularly important as the current crypto industry is rife with rising crypto crimes. Your chosen crypto exchange should assure updated security features such as 2FA authentication, cold wallet storage, and so on.
HODLing
The most common investment strategy in the crypto world is HODLing. It’s all about buying crypto and keeping it on hold till the market reaches a grand price point. The current situation of the crypto market is only suitable for HODLing. As mentioned before, despite the decline, the crypto is predicted to reach new highs within 4-5 years. So, you can opt for HODLing and wait till the price rises so that you can sell at a stellar price.
Final words
Try to maintain a diversified portfolio when you want to invest in assets like cryptocurrencies. This way, you will always have your 2nd or 3rd crypto investment back even if the first one encounters a red candle.