How to Become a Cryptocurrency Investor in 4 Easy Steps – 2020 Guide
The 21st century is an amazing period because of the rapid development of advanced technology. That especially counts when we talk about the online world. People are tired of their “9-5” jobs because it brings many stressful situations to their life. That especially counts for people that have a job they do not like. The Internet opened many doors to people that are willing to look for alternative ways to ensure financial stability.
Despite that, the Internet also brought to the world some new industries. One of the most popular and controversial at the same time is the cryptocurrency field. Digital currencies were a taboo subject when they appeared. Many people believed they are nothing more than a scam. Only a few years later, many people are willing to invest their savings into Bitcoin and other altcoins.
Still, becoming a cryptocurrency investor is not as easy as it seems. Let’s compare that with starting a business in any other industry. You can’t get an idea, invest your money in it, and expect to become rich in a couple of days. The same rule counts when we talk about digital currency investors. Fortunately, you came to the right place to discover how to become a cryptocurrency investor in a few easy steps.
1. Everything Starts with Knowledge Improvement
It doesn’t matter if you have $200 or $200 000 to invest in different digital currencies. You won’t manage to achieve success if you do not work on your knowledge and skill improvement. Before everything, you should start working on the improvement of your theoretical knowledge. You should get familiar with different phrases such as crypto wallets, private keys, mining, etc. We recommend you check techround.co.uk and find out more about the terms we mentioned. That is the possible way to make the first steps and start your journey more effectively.
2. Try to Determine Your Strategy
We know how excited all the beginners are when they start improving their theoretical knowledge. Everything around digital currencies will look perspective and profitable. Unfortunately, you will have to be patient because pulling your money out immediately won’t bring the best results.
Let’s once again compare cryptocurrency investing with starting a regular business. You are not going to start a business without a good business plan. Because of that, we believe you understand why defining your investment strategy should be one of the main priorities.
There are two types of investments that you can make. Some people would decide on short-term investments. For instance, they would want to make a profit out of digital currencies within a few weeks of months. Because of that, they would invest money in particular digital currency and sell their coins only a few months after that. Logically, these investments require bigger investments. You will invest in digital currency that already has a strong value on the market.
On the other hand, more patient investors will decide on making long-term investments. They will chase those “projects” that require time to reach their value. Indeed, these investments require less money. However, they also require an in-depth analysis of different variables. Do not make long-term investments if you do not know how to recognize a good opportunity.
3. Determine What You Will Invest In
These two steps are almost similar, although they both require an in-depth analysis. The beginners have two options. One of the options they have is investing in stable currencies. For instance, Bitcoin, Etherum, and other popular digital currencies are a good example of that. They are not willing to take bigger risks. Because of that, they will invest their fiat money into cryptocurrencies with a stable history and big market cap.
There are two things you should know about stable digital currencies. First of all, they require bigger investments. Despite that, their price can’t go up a lot because it is already high. However, the good thing here is that they come with an increased transactional volume. That “feature” allows people to exit anytime they want.
On the other hand, you can also decide on investing your money in less popular digital currencies. Logically, the investment of that type is riskier because you no one guarantees you will make a profit out of it. Despite that, they also require more experience. The beginners usually do not know how to predict certain things on the market. That type of skill is going to come over time. However, investing in riskier currencies also allows you to gain the necessary experience quicker.
In the end, you can also decide on investing your money in the upcoming initial coin offerings. The good thing here is that you will get a huge discount on participation. Indeed, the risk here is huge, but the money you will have to invest is usually affordable to most people. That is another way to get the necessary experience that will allow you to invest in stable digital currencies later.
4. Determine How You Can Make the First Investment
The last step you will have to make is choosing the best possible tool for investing. Fortunately, there are four different ways of how you can do that.
Digital currency platforms like Coinbase are the first option that you have. The verification process on these platforms is usually a piece of cake. After that, you will easily buy the strongest digital currency with no additional effort.
Despite that, some investors decide on purchasing digital currencies from an exchange. The number of crypto exchanges is huge, and it will be tough to decide on one that meets your requirements. These exchanges will allow people to invest in a wide range of cryptocurrencies. It is a better option for people that want to avoid some bigger fees.
Another way is to participate in the Initial Coin Offering. Yet, there are some things that you should know here. Before everything, each project will need to determine the particular digital currency they will accept. The same rule counts when we talk about wallets. Read the instructions that you get for each project, and try not to miss some of the essential details.