This guide to investing in cryptocurrencies and other digital assets will help you successfully enter the crypto space and progressively develop the ability to understand this growing global market better.
The first thing we must say is that cryptocurrencies are the new form of money. Digital money entered the scene in 2009 with the launch of Bitcoin (BTC). This was the first cryptocurrency created by someone under the pseudonym Satoshi Nakamoto.
Since the dawn of the crypto age, the price of cryptos, despite the characteristic ups and downs due to their volatility, have gone up substantially over a 10-year horizon. Cryptos, at this point, represent an unavoidable investment option.
Among the well-known cryptocurrencies of the almost 1700 projects that currently exist are Bitcoin (BTC), Ethereum (ETH), Binance Coin (BNB), Tether (USDT), Cardano (ADA), Solana (SOL), Ripple (XRP), Terra, Dogecoin (DOGE) and Shiba Inu.
Cryptocurrencies are currently considered an essential asset in the investment portfolios of many investors. Big and small investors are betting on the success of blockchain technology. Its multiple uses are entirely changing the financial system of the countries.
For about three years, investments in cryptocurrencies have grown at the level of oil, gold and any other stock market asset. Today, the crypto market is already well over $3 trillion, according to data from Statista. This puts digital assets on a par with Apple, Google, Meta, Amazon, and every other tech giant.
So now is the time to jump on this fast-moving bandwagon of progress. But, to invest, you need first to learn how to do it to avoid costly mistakes.
Basic Crypto Investment Methods
To start investing in Crypto, you first need to adopt one of the four investment methods.
1. Buy cryptocurrencies
Through centralized cryptocurrency exchanges, P2P shopping sites, decentralized exchanges, and ATMs, you can do this. You will need to get your KYC done, then you will need to link your bank account to your crypto exchange, and you can get started. This is the easiest and most recommended method to invest in cryptocurrencies as long as you take the proper precautions since the purchase is direct.
To do this, you must create an account with a crypto exchange. These are some of the biggest in the world: Binance, Coinbase, Gemini & Kraken . In India, you can look at WazirX & CoinDCX Although there are many more that offer excellent services, security and important returns for your investments.
2. Invest as you would in a SIP
The crypto asset space is more volatile compared to the stock market and the mutual fund space. Therefore, it makes a lot of sense to make monthly purchases of your favourite basket of your Crypto digital assets. This would allow you to average out your price and ride out the volatilities in the short run, which could significantly help you improve your long term returns.
3. Invest via a fund
Investing in a fund is good if you want a nuanced entry into the crypto asset space. Funds perform their due diligence work, filter assets, and have early access to deals that others may not have. These can help in generating good returns for your capital. A fund allows you to be hands-off and allows experts to focus on their expertise in generating returns via their understanding of the crypto space and fund management insights. /
Crypto is here to stay and your consistency and thoughtfulness of choices will play a very important role in the returns you will generate. With over 17,000 cryptocurrencies available, it is imperative to both know which ones to buy, when to buy and also how to buy and secure these assets. Start with a small amount to build your confidence in the space and you could be on your way to generating generational wealth