Cryptocurrencies have made it possible for people across to globe to invest their money. Though between the fog of hacks, scams and conflicting news that circulates the web, what is a good strategy to invest in these digital currencies? Let’s find out.
Make sure that your country allows the trade of cryptocurrencies, otherwise, you might be looking for legal trouble. To know about the status of cryptocurrencies and exchanges, you can check my article here.
Choosing an Exchange
There has been an explosion of cryptocurrency exchanges in the market. Due to the nature of these digital assets, if you lose your currencies on an exchange, there is no way to recover it. Although platforms such as Incodium offers a solution, your exchange of choice should support it.
Setting up your Wallet
Digital wallets can take up many forms. It can be a wallet stored on your hard drive or a ‘cold’ wallet which comes in the form of a USB stick. It’s fairly safe to store small amounts of crypto on an exchange. However, if you have put in a significant investment, it’s always better to store your currency in a dedicated wallet. You will have access to the wallet key, making it more secure.
Invest only what you are willing to lose
This is investing 101, whether you are putting your money into stocks, bonds, mutual funds or digital assets, there is no guarantee that your investment is secure. Especially considering the cryptocurrency market, where the volatility is extreme, you need to mentally prepare yourself in a case where your investments can drop to zero.
Google is your Friend
It’s incredibly important that you carry out your own research. There are plenty of people out there who are giving out free advice on investments. In case you lose your money, you cannot hold them accountable. So its always better to make a well-informed decision.
Follow the News
It is important that you keep in touch with all the latest news and events happening around the crypto-space. This will allow you to take timely action to increase your profit and save yourself from loss.
Withdraw Profits Regularly
I cannot stress this point enough. It can be easy to get carried away and fall into the trap of being overly greedy. If you withdraw your profits regularly, you would have redeemed your initial investment over time, making you less prone to risk and reducing your overall loss. Also, exchanges give you an option of stop-loss which can further save you from sudden market movements.