Cryptocurrencies

Investing In Cryptocurrencies [2022]

Cryptocurrencies are one of the best and most profitable investments of the 21st century. Due to high vitality, it can also be risky. To build a cryptocurrency fortune, you must understand the basic intricacies of cryptocurrencies, how to invest in promising cryptocurrencies, and how the Blockchain system works.  

This article will explore what cryptocurrencies are, the basics of investing in Bitcoins and altcoins, how to get started in cryptocurrency as a beginner, and the ten best promising coins to build long-term investment.

What are cryptocurrencies?

Cryptocurrencies are digital currencies that use cryptography to secure transactions and control the creation of new units. They are designed to work as a medium of exchange, just like the fiat currency, which operates through a computer network. It isn’t controlled or dependent on a central authority, just like the bank or government authority to regulate and maintain it.

They are built on the Blockchain system, which makes the process of dealing with cryptocurrencies transparent and accountable. The blockchain system makes it hard for you to cheat the system, so the cases of fraud and miscalculation are brought to the lowest basis.

cryptocurrencies

Bitcoin, the first decentralized cryptocurrency, was created in 2009 by an unknown person or group of people under Satoshi Nakamoto. Bitcoin has grown in popularity worldwide, with over 2 million merchants accepting it as a payment method. As of March 2022, there are over 9,000 cryptocurrencies worldwide, of which 70% have a market capitalization of over 1$ billion. Undoubtedly, cryptocurrencies are regarded as the future of fiat money.

The Basics of Investing in Bitcoin and Altcoins

Bitcoin is the first decentralized digital currency. It was introduced in 2009 by an unknown person or group of people under the name Satoshi Nakamoto. Bitcoin has become one of the world’s most valuable currencies, with a total value exceeding $100 billion.

Altcoins refers to other cryptocurrencies existing in the marketplace other than Bitcoin. The most popular and valuable altcoins are Ethereum, followed by other altcoins like Binance Coin (BNB), Cardano (ADA), Dogecoin, Ripple XRP, Solana, Shiba Inu, and so many more.

To build a wealth system from Bitcoins and Altcoins, you must understand the basics of investing as it will help reduce your risks, knowing that cryptocurrency is a volatile asset.

Investing in bitcoin and altcoins can be a great way to make money, but there are many things to consider before you put your money into these volatile markets. With that said, here are some tips for investing in bitcoin and altcoins

  • Learn about the coins you want to invest in   
  • Do not invest large sums of money that you cannot afford to lose
  • Watch out for scams and fraudsters.
  • Keep track

1.     Learn about the coins you want to invest in 

One of the ways to know a promising coin is to understand its functionality of the coin. The use cases of the coin point to whether the coin is a stable one or not. Some altcoins are called meme coins because they don’t have concrete use cases. Dogecoin is known to be the head of the meme coin because it has no real functional use case; this is one it isn’t very stable. Let’s look at Ethereum.

Ethereum has a smart contract and is the mother of Defi coins; in addition is used for various innovative applications in web browsing, gaming, finance, identity management, supply chain management, and advertising. The more diverse and functional the use cases, the more valuable a stable the coin is.

2. Do not invest large sums of money that you cannot afford to lose

Financial experts advise that you only invest 10% of your risky assets in cryptocurrencies. The rule of the thumb depicts that you only invest what you can lose. Cryptocurrencies are the most volatile assets on earth. It is easier to lose all your investment in cryptocurrencies than in other assets like stocks, mutual funds, or real estate. A centralized authority doesn’t control cryptocurrencies. As such, it is derived from complex market situations in which you don’t have control over some parts.

3. Watch out for scams and fraudsters 

In 2021, 14$ billion has been lost to crypto scammers. In February 2020, Wormhole, a cryptocurrency exchange platform, lost $320 to a cyber-attack. These scams usually come in the form of Bitcoin investment schemes, rug pull scams (this entails where scammers pumping up a new project, be it coin or NFT to get funding, they get eh funding, and disappear), romance/dating sites scams, phishing scams, social media, cryptocurrencies giveaway scams, Ponzi schemes, and fake cryptocurrency exchanges.

4. Keep track

It is essential you know how to track your digital investments. You can use a cryptocurrency portfolio tracker to do this. Some of the best cryptocurrency tracker apps include Altpocket, CoinTracking, Personal Capital, Coinstats, Blockfolio, and many more.

New to Investing in Cryptocurrencies? 5 Tips to Get Started

If you are new to investing in cryptocurrencies, here are some tips to help you get started.

1) Understand the risks involved

Cryptocurrencies are volatile and speculative, so it is essential to understand the risks involved before investing. Other cryptocurrency risks you need to understand are that:

  • Cryptocurrency is unregulated
  • Cryptocurrency is susceptible to hacking and error
  • Cryptocurrency is affected by discontinuation or hard forks
  • You have little control over your asset

2) Do your research

You need to research the cryptocurrency and find out its use cases, who is developing it, how the project is funded, and more. This pointer tells you the coin’s usefulness and degree of value in the market. A coin with no known founder or concrete use cases can easily crash anytime. So before investing in any coin, ensure you go through the white paper and dig into the legal status of the coin.

The Everything Guide to Investing in Cryptocurrency: From Bitcoin to Ripple, the Safe and Secure Way to Buy, Trade, and Mine Digital Currencies

  • ASIN ‏ : ‎ B07GNTLHZN
  • Publisher ‏ : ‎ Everything (March 5, 2019)
  • Publication date ‏ : ‎ March 5, 2019
  • Language ‏ : ‎ English
  • File size ‏ : ‎ 1015 KB
  • Text-to-Speech ‏ : ‎ Enabled
  • Screen Reader ‏ : ‎ Supported
  • Enhanced typesetting ‏ : ‎ Enabled
  • X-Ray ‏ : ‎ Enabled
  • Word Wise ‏ : ‎ Not Enabled
  • Print length ‏ : ‎ 289 pages
  • Lending ‏ : ‎ Not Enabled

3) Monitor your portfolio  

It is important to monitor your portfolio so that you can make changes as needed. This includes checking prices, reading articles about cryptocurrencies, and watching for news about your investments. It’s also good to set up alerts for price changes or other relevant information about your investments. You can also be acquitted with crypto monitoring apps such as SigFig Wealth, Yahoo Finance, Personal Capital Sharesight, and Personal Capital.

4) Search and follow reputable news sources

To be a successful cryptocurrency trader or investor, you must know how to stick with reliable facts. The cryptocurrency market is influenced by news and facts. You can do all your fundamental analysis, but if you are being aligned with the current news or fact at that money, you may fall into a loss or miss out on something huge. Find reputable crypto new sources, follow them on social media, and always keep a table on any notifications from these news sources.

5) Learn to diversify your portfolio

Bitcoin is only a part of the story when it comes to cryptocurrency. Learn how to spread your investment. In cryptocurrency, it is usually advised not to put your eggs into one basket; anything can happen. If a particular coin faces a downsizing, you lose. But when you diversify, it allows you to spread your risks.

Finding the Top Ten Crypto Coins with the Future Potential for Maximum Gains

Cryptocurrencies are one of the hottest topics in the world right now. Many believe that cryptocurrencies will be the future of currency and will eventually replace traditional fiat currencies. Others believe that it is a bubble and that cryptocurrencies will ultimately crash. If you are considering investing in cryptocurrencies, you need to know your goals and the type of investment strategy you want to follow. This section will help you determine which long-term crypto investments work best for you, your goals, and your risk appetite.

One of the ways to build a fortune in cryptocurrencies is through long-term investment. What does a long-term cryptocurrency investment entail?

A long-term cryptocurrency investment is an investment that has a time horizon of at least six months. It is also one that is not geared towards short-term gains. Instead, the investor will be looking for a long-term appreciation of the value of their crypto asset.

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The best cryptocurrency for long-term Investments that has maximum benefits are:

  1. Bitcoin (BTC) – is the most valuable cryptocurrency on earth, with a market cap of $441 billion
  2. Ethereum (ETH) – the most valuable altcoin with a market cap of $600 billion
  3. Tether (USDT) – a stable coin backed by fiat currencies like the US dollar and Euro keep an equal value. It is $66 billion.
  4. U.S Dollar Coin (USDC) – a stablecoin backed by the US dollars and powdered by Ethereum with a market cap of $54 billion
  5. Binance Coin (BNB) – The largest cryptocurrency exchange, the Binance native coin with a market cap of $45 billion
  6. XRP (XRP) = market cap of $18 billion
  7. Carano (ADA) – market cap of $17 billion
  8. Binance USD (BUSD) – market cap of 17 billion
  9. Solano (SOL) = market cap of $14 billion
  10.  Dogecoin (DOGE) – Market cap of $9 billion

Note: It is important to note that there are two types of cryptocurrencies: utility tokens and securities tokens. Utility tokens are not investments and are used as a means of payment for goods and services on a certain blockchain platform. On the other hand, securities tokens represent shares in a company or fund that has been established with the help of blockchain technology. In this case, they can be considered an investment because they have an underlying value – such as equity shares or dividends.

It is also worth noting that many fraudulent ICOs (Initial Coin Offerings) have been created just to steal money from unsuspecting investors.

Frequently Asked Questions (FAQs)

Can you get rich by crypto?

It is possible to get rich by crypto, but it demands hard work and consistency. If you get rich by crypto, you must learn to invest in promising coins over the long term. Basically, there are three ways you can get rich by crypto. You just have to master any or more than one of them. These are trading, investing, and mining.

Is cryptocurrency a good investment?

Cryptocurrencies are a good investment that is marked by high profits. You can make high returns overnight or within seconds. However, there is a downsize to cryptocurrency which is its volatility. The degree b you make a profit easily is the same degree by which you lose money quickly. Both are the two sides of the coin. So for you to considerably benefit from cryptocurrency investment, you must understand investment in promising coins with real use cases and the liquidity requirements of these coins.

How much should I invest in cryptocurrency as a beginner

Financial experts advise that you don’t invest above 10% of your risk assets. The rule of thumb states that you invest only what you are capable of losing. Cryptocurrency is a good investment, but not without risk. So there is no specified amount you can begin investing with.

Can you convert Bitcoin to cash?

You can convert your Bitcoin to fiat currency anytime you want. You can go through exchanges such as Binance, Coinbase, Kraken, or Gemini to convert your Bitcoin to cash. In countries where Bitcoin is legalized, you can sell your assets to a third party and get paid in cash via your specified payment option.

Conclusion: How to Invest Safely in Crypto Assets

There are a few things to remember when deciding to invest in cryptocurrencies. First, it is essential to know what you are investing in. You should always research and ensure that the coin or token is legitimate and has a real-world application. Second, it is essential to know the risks involved with investing in cryptocurrencies is essential. Third, you should have an investment strategy before investing.

Researching the cryptocurrency: Before investing in any cryptocurrency, it is essential to research the company behind it and see if they have a product or service they are trying to create or improve upon with their currency. You should also look at how much of the currency has been issued so far and what their total market capitalization is, as this will give you an idea of how many coins are

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