How to invest in cryptocurrency for beginners

Purchasing cryptocurrency is one of the most discussed ways of investing lately. This article will break down how to invest in cryptocurrency, acquisition strategies, which cryptocurrencies are worth investing in, as well as ways to buy and safely store digital currency.

Worth investing in cryptocurrency?

The creation of cryptocurrencies was driven by the increasing limitations of the fiat system, but in the process, crypto began to be seen as an investment tool.

Investing in cryptocurrency is a complex and multifaceted issue. But the growing popularity of such investments shows the promise of such a move.

Investing in cryptocurrencies is a complex and multifaceted issue.

The benefits of cryptocurrency

Investing in cryptocurrency is directly related to the benefits of its use, among which we can name the following:

1. Decentralization - cryptocurrencies are not controlled by the state;
2. Easy to use - no need to make any extra movements to buy or sell cryptocurrency. All you need is an internet connection and the necessary app, for example a crypto wallet;
3. Availability - anyone can mine virtual coins, for example via mining or pharming;
4. Independence - nobody but the user can control the flow of funds in the account.

The list does not include all the benefits of digital assets, but only general and basic ones. Each particular cryptocurrency can have its own advantages.

The increased interest in crypto-assets as well as their clear advantages give us an opportunity to call cryptocurrency the investment of the year in 2021.

Cryptocurrency investment strategies

When deciding to start investing in a digital currency, you should determine the most appropriate investment strategy. For a new investor, it is usually hard to figure out your own strategy on how to invest in cryptocurrency right away. Therefore, we suggest considering three basic ways to get started.

Investing for the long term

The “buy and forget” (Hodl) way. In this case, the investor buys the cryptocurrency and expects its price to grow in the following years.

For long-term investing it is better to invest funds, which the investor does not need for life in the nearest future.

Short-term investments

This method is suitable for those who are not ready to wait a long time for profits from investments.

The strategy looks something like this: the investor splits his existing capital and uses it to buy cryptocurrencies over a period of time. If its price declines, then the decline should be used to buy new coins. In this way, the price of the investment is averaged out and the average purchase price decreases.

Trading

This is probably not really a classic way of investing. Trading is more like working than investing. However, a description of how to invest in cryptocurrency for beginners cannot be complete without this method.

Trading is cryptocurrency trading, the main objective of which comes down to the classic resale scheme: buy cheaper, sell dearer. In contrast to the above two ways, trading requires constant monitoring of the rate of cryptocurrency, the market situation, as well as the economy and IT in general.

In order to successfully trade cryptoassets, you should develop certain knowledge and skills, in particular:

1. Analyze the fundamentals of the asset;
2. Monitor the sales volumes of the asset;
3. learn how to use charts and quotes;
4. Track your trading history;
5. Clear Buying and Selling deals.

Unlike investing where profits need to wait a long time, trading allows you to speed up the process of earning, but in turn, it requires expertise and time.

What cryptocurrencies are worth investing in 2021

How to choose a currency to invest in

The question of how to choose the right cryptocurrency for a successful investment is complex. Everyone involved in this industry will have a different opinion on this matter. We suggest to pay attention to the following four indicators for investing:

1. capitalization;
2. profitability;
3. sphere of application;
4. expert opinion.

The indicators noted are not exclusive and may represent a broader list. Each investor is guided by their own preferences.

Where to invest in cryptocurrency is safer

There are different services for buying and storing cryptocurrency. But it's worth to understand where to invest in cryptocurrency better and which service to use.

In general, all such services can be divided into two categories: centralized and decentralized. The difference between them is that centralized services are, in fact, intermediaries who make transactions on behalf of users. These include exchanges and cryptocurrencies.

While decentralized ones allow the user to make transactions and store cryptocurrency independently. For example, cryptocurrency wallets.

The choice of which service you choose depends on your investment strategy. For example, for trading, decentralized services are best suited. In turn, for long-term investing cryptocurrencies are used.

Since the long-term investment strategy of all of the above is associated with the least risk, let's consider it further as a step-by-step guide to investing. Let's do it with the example of Trustee cryptocurrency wallet. We'll do it as a step-by-step guide for investing.

Step-by-step plan: How to start investing in cryptocurrency

1. Pick a cryptocurrency to invest in;
2. Download and install a great app to invest, like Trustee Wallet;
3. Write a recovery phrase;
4. Select the desired currency and amount;
5. Select the exchange provider;
6. Add bankcard;
7. Check transaction information and confirm.

Risks of investing in cryptocurrency 2021

It's worth remembering that investing in cryptocurrencies, like any other, comes with certain risks and setbacks. Beginner investors should be especially aware of this when analyzing the cryptocurrency market and choosing which coins to invest in.

Let's look at the main risks of investing:

1. Theft or loss of private keys or Recovery Phrases.
2. Hacking or fraud by the exchange staff.
3. Danger that the cryptocurrency in which the user has invested funds will cease to exist or be listed on the market.
4. Volatility of crypto-assets.

Despite this, investing in cryptocurrencies can be a good way to make money for those users who are willing to take risks and think carefully about their investment strategy.

Details on investing in cryptocurrencies:

Tips on Investing in Cryptocurrency for Beginners

In summary, the following tips for a beginning investor can be given for starting out:

1. Considerate the choice of assets to invest in. For example, buy proven digital currencies (such as bitcoin). Or choose new and promising cryptocurrencies.
2. Beginning your investment journey with low-cost cryptocurrencies.
3. Clearly decide on an investment strategy.
4. Choose a convenient, reliable and affordable way to buy, sell and hold coins.
5. Analyze the cryptocurrency market, paying attention to any changes.
6. Be aware of the risks involved and think carefully about investing.

This article is written for informational purposes and is not intended as an investment guide.

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