How To Invest In Cryptocurrencies

Cryptocurrencies have made early investors crazy rich; Bitcoin in particular. Bitcoin used to be worth pennies on the dollar and then recently exploded with popularity, with pricing soaring up to nearly $20,000. If you had invested $1000 in Bitcoin when it was worth, say, one cent, and sold it all when it was worth $20,000, you would’ve made almost 2 billion dollars. That’s an insane amount of profit.

Cryptocurrencies are digital currencies that use encryption techniques to regulate their units and transfer them from person to person. Bitcoin was the first of these currencies, invented in 2009, and since exploded in popularity. A whole new subculture formed with cryptocurrency fanatics who collect and even design their own currencies.

Before you throw money at these currencies, it’s important to note that the prices are very volatile and they do trading on a 24-hour basis. You can go to sleep at night and wake up the next morning with your portfolio up or down thousands of dollars. That’s just the name of the game. Therefore, don’t spend money on cryptocurrencies that you aren’t willing to lose.

As you can see, Bitcoin is the most dominant player in the game but, as of recent, other cryptocurrencies are getting strong footholds in the market.

How to invest

To invest in a cryptocurrency, you first need to get a specialized wallet. These wallets use a personal address to send and receive the cryptocurrency. If someone had a copy of your address, they’d be able to send you cryptocurrency from their wallet to yours.

One of the most popular cryptocurrency wallets is Coinbase. You can make an account on their website or use their free mobile app to get started. They allow you to buy and sell Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. Like most investments, there’s a small transaction fee for each purpose.

The first cryptocurrency most people buy is Bitcoin, since it’s the most well-known one out there. Nowadays Bitcoin has a pretty steep price but, don’t worry, you don’t have to buy a whole Bitcoin when starting out. Most cryptocurrencies can be bought in pieces.

Here is a chart, by CoinMarketCap, of the market cap dominance of the top coins (as of February 17, 2021):

Buying obscure cryptocurrencies

Dabbling in the more obscure cryptocurrencies may require you to use a special wallet. For example, you can use Toast Wallet to store Ripple or Lobstr to store Stellar Lumens. To make things more complicated, most of these smaller currencies don’t allow you to purchase them with money.

You must first buy a more established currency, such as Bitcoin, and then use a cryptocurrency exchange such as Evercoin to trade one currency to another. This is a very confusing process for the average person. You’ll need to do some independent research to learn how to do this properly.

Another great cryptocurrency exchange is Binance, which can trade a wide variety of currencies. Buying smaller currencies is a risky process, but if who knows, you might get lucky and buy then bitcoin.

Keep track of your portfolio

If you have many cryptocurrencies in many wallets, it can become really difficult to keep track of how your portfolio is doing as a whole. It’s helping to use an app called CoinCap. This service gives you the most up-to-date prices for most of the different cryptocurrencies out there. You can use this app to make an atlfolio. This is a portfolio where you can enter how much of each currency you own and watch how much money you’re making (or losing) in real-time. Altfolios are very useful to stay up to date with cryptocurrencies relevant to you.

Now you have all the tools you need to begin your venture into the world of cryptocurrency. Remember to only spend as much money as you’re willing to lose and do your research before you purchase anything. If the cryptocurrency you’re invested in drops a thousand dollars in a few days, don’t panic. This is a normal occurrence, and it’s likely that the price will go back up in the future.

Which cryptocurrencies do you own or want to buy? Which ones do you think are going to be big in the future? Let me know in the comment section down below!