Since the crypto craze in the 2010s, many people and groups have been trying their hand at investing in virtual assets. The crypto market is continuously growing and attracting investors from beginners to veterans.
Are you looking to expand your fiscal portfolio to digital assets? Expertly build your crypto investment with a comprehensive beginner’s guide, complete with trading tips and trends here at BTC Post!
Learn all you need to know and more about crypto and trading in BTC Post’s Crypto Investment 101 guide.
Back to basics: How cryptocurrency works
Before you invest in crypto tokens and altcoins, it is always better to know what you are getting into. Here is a quick refresher on what cryptocurrency is and how it works!
A cryptocurrency is a digital asset that can be traded from person to person on the web without any third party like a bank or government. It is a decentralized currency that can be used as a mode of online payment for any goods and services.
As a result, the value of a crypto coin is highly volatile, depending on whatever users are willing to pay or exchange for them. It runs on blockchain tech that records all of the transactions made with a crypto coin.
To get cryptocurrencies, there are two ways you can choose from:
- Mining – It allows you to earn crypto without having to put down money for it. Miners complete the blocks on a blockchain to be rewarded with a specific amount of crypto coins.
- Trading – It allows you to obtain crypto with another asset which can either be a different virtual coin or fiat money. It involves taking a risk on price movements via a contract for difference (CFD) trading account or buying and selling crypto coins on an exchange platform.
As of the moment, there are more than 6,700 different crypto tokens and altcoins that are publicly traded. Some of the top crypto you can invest in include:
- Bitcoin (BTC) – It is the most widely used token that brought the crypto movement into mainstream finance. Its supply limit is about 20 million units.
- Litecoin (LTC) – It is the second most popular crypto with a supply limit of 84 million units.
- Ripple (XRP) – It is one of the most easily convertible tokens and one of the fastest transaction confirmation and blockchain creation times.
- Ethereum (ETH) – It fuels smart contracts meant for peer-to-peer trading. Its supply is not capped but is determined by the members of its community.
What is cryptocurrency investment?
In the most basic sense, a crypto investment is an act of buying and selling of digital assets through an exchange platform. Crypto investors trade one crypto coin for another in hopes that the value of the acquired coin will increase.
Moreover, all of the transfers done in a crypto investment are not handled by financial institutions such as banks. This has brought upon changes in the wider financial landscape compared to more traditional markets like stocks and Forex.
For novice investors, the most common and convenient way to get started with crypto investing is on an exchange site. There are also crypto wallets that enable users to buy and sell a range of tokens and altcoins. These platforms also allow you to send assets to an exchange site for trade.
Basic crypto investment essentials: How to do it
Before you start investing in crypto, you will also need a few investment essentials aside from your crypto knowledge. Find out if you have all the crypto trading must-haves in BTC Post’s Crypto Investment 101.
The first thing you will need is a trading account on a crypto exchange. It is an online platform where you can buy and/or sell digital currencies for other assets such as fiat or vice versa. There is a wide range of crypto exchanges you can choose from depending on the transaction fees and rates, as well as the crypto laws of your country.
Here are some of the top crypto exchanges you can check out:
- Coinbase – It is the biggest Bitcoin broker that supports the purchase of other crypto coins such as Ethereum and Litecoin. It boasts high liquidity and buying limits that are perfect for novice investors due to its simplicity.
- Binance – It supports a wide range of virtual assets you can trade with at the lowest transaction fees. It also allows users to buy and sell crypto tokens and altcoins using more than 40 fiat currencies.
- Bisq – It is a highly secure and decentralized platform that allows peer-to-peer trade for both crypto and fiat-crypto deals.
- Gemini – It is the first licensed Ether exchange that also supports other crypto coins such as BTC and XRP, as well as fiat money.
After setting up your crypto trading account, you will need a fund to start trading. This can be acquired using your credit/debit card or through a bank transfer. Exchange platforms offer a huge selection of payment options to choose from.
Cryptocurrencies are stored in a crypto wallet which can be hot or cold storage. It can either be online (software wallet), on your computer (web or mobile phone wallet), on a piece of special equipment (hardware wallet), or even on a piece of paper (paper wallet).
Crypto investment 101: Things to keep in mind
Investing in crypto is a volatile venture, especially since the coin prices go through extreme ups and downs. Make sure you manage your expectations and think of whether you want to invest short or long-term.
From there, do your research. You can do so by reading the whitepaper and keeping track of the market capitalization. Stay up to date with the latest news and updates on everything crypto here at BTC Post!
Bitcoin (BTC) $ 47,667.00 1.66%
Ethereum (ETH) $ 3,371.16 3.21%
Cardano (ADA) $ 2.36 1.56%
Tether (USDT) $ 1.00 0.13%
Binance Coin (BNB) $ 411.57 1.21%
XRP (XRP) $ 1.07 1.62%
Solana (SOL) $ 160.75 0.77%
Polkadot (DOT) $ 33.97 4.29%
Dogecoin (DOGE) $ 0.239014 1.66%
USD Coin (USDC) $ 1.00 0.46%