Cryptocurrency: A Simple Guide to Investment

2023-12-01 10:58:12

By : JSB Market Research

In : BLOG

Since cryptocurrency prices are known for their extreme volatility, it is crucial for investors to do in-depth research before considering participation.

Introduction

Around the world, cryptocurrency is becoming more and more popular as a trading and investment tool. Even though the cryptocurrency industry as a whole has seen significant volatility—according to CoinMarketCap, it now has a $934.32 billion worldwide market cap—investing in cryptocurrencies necessitates careful analysis of price variations. Altcoins such as MetaversePay and Squid Game 2.0, for example, might witness a 1,000% surge in value one day and a similar or even higher decrease the next. Well-known cryptocurrencies like Ethereum and Bitcoin have also seen significant highs and lows. Consequently, treating cryptocurrency investing as a long-term project necessitates careful study and wise choice-making.

What Is Cryptocurrency?

Cryptocurrencies are digital goods that carry out, verify, and record transactions across an encrypted system. They function apart from centralized authority, such as banks or governments.

Can Cryptocurrency Be Considered A Form of Currency?

Although cryptocurrency is categorised as “digital currency”, which should imply it is cash, it is still not used commonly in the market as means of transaction between business and customers. Simply stated, many retailers refuse to use cryptocurrency payments nowadays.

A possible exception may be Bitcoin, which some companies accept as a form of payment for their products or services. Why would people purchase virtual items when they cannot be used as regular currency?

Cryptocurrency as an alternative asset class. Some people expect that crypto-currencies will finally be a conventional method of money, others consider crypto-currencies as a different asset that may grow.

It also acts as a way to make indirect investments in blockchain technology. Some people purchase cryptocurrencies in order to invest in the blockchain technology that powers them.

Steps On How to Invest In Cryptocurrency

Explore these simple steps to get started if investing in cryptocurrencies is still something you're interested in doing:

1. Choose a cryptocurrency for investment

To conduct intensive research, visit sites like CoinMarketCap and study the price variations of various cryptocurrencies. Seek assistance from credible experts who will act as guides in your selection process. This eases out other subsequent processes like choosing which currency to use and so forth.

2. Select a cryptocurrency exchange

Cryptocurrency exchanges are virtual platforms wherein crypto can be traded among buyers and sellers. For beginners, it would be safer to choose a trading floor rather than buying from one trader. For example, there are many Indian cryptocurrency exchanges like CoinSwitch Kuber and WazirX that offer multiple benefits such as reduced minimum amount for investing, a huge variety of cryptocurrencies, and low maker-taker transaction costs. Now, you will need to select an appropriate exchange and then receive a deposit address from the site. Once you have it, you are ready for your own investing adventure.

3. Select a payment method

You must first put money into your account and can then purchase cryptocurrencies in order for such transactions to occur. Additions can be made to funds through bank transfers, online banking, UPI, or cryptocurrency wallets. Note also that different means of payment attract different transaction fees on various cryptocurrency exchanges. Be sure you conduct extensive research before proceeding any further.

4. Purchase cryptocurrency

The procedure is actually very straightforward. Once you log in, a click will give you access to every available cryptocurrency. Your trading interface must show every coin’s Buy button on your screen. Just click on your order to complete it.

5. Securely Store

This is one of the steps you need to take to make sure that your cryptocurrency holdings remain secure. Some customers do not trust their safety in the case of using internet wallets, since they could be compromised due to the openness of communication channels and result in a hacker’s attack.

It would be wise to use cold storage, a means through which you can keep your assets offline, for safe storage of money. However, it is important to note that some amount of withdrawal charge would apply every time you transfer your crypto coins to any other wallet if you opt for third-party cold storage.

Conclusion

These are the simple steps of investment in cryptocurrency. If you intend to sell off your coins, go back to the cryptocurrency exchange and click “Sell”. You may decide to dispose of all your assets, or a portion of it as a whole. One should check what’s going on within the market thoroughly before deciding whether one is to sell or hold.