Guide to consider when investing in Cryptocurrency
Many individuals wonder how they can invest in Cryptocurrency without the emotional strain that comes with trading. Here are a few guides to consider before investing in Cryptocurrency:
1. Understand the cryptocurrency use cases
2. Market capitalization
3. Don’t put all your fiat in one crypto-coins.
4. Know the risk in Cryptocurrency
5. Keep your asset in a trusted wallet
1. Understand the cryptocurrency use cases — cryptocurrency use cases differ, and they are created to solve different problems. Most cryptocurrencies are used as a means of payment, while others are used for developing applications such as gaming, ecommerce, exchange platforms, etc. For example, Ethereum is used to create smart contracts. The Ethereum blockchain can be used in building other cryptocurrencies.
2. Market Capitalization –This is popularly referred to as a Market cap. It is the circulating supply of a cryptocurrency. It reflects the popularity of a cryptocurrency over the long term. Crypto with a high market cap is generally considered safe. It is essential to consider this when investing in a cryptocurrency
3. Don’t put all your money in one crypto-coins — when investing or trading in bitcoin, it is safer to spread your intended amount for investment across various currencies; a minimum of three currencies are advised. It provides a safer ground for profit and backing in situations of loss.
4. Know the risk in Cryptocurrency — cryptocurrencies are known for their volatile state. The possibilities of sharp dumps are highly possible and as such, be mentally prepared for such cases. Knowing the level of risk you can sustain is a good determinant of the amount you can risk.
5. Keep your asset in a trusted wallet — as you store cash at hand in your wallet or purse, likewise your crypto assets. All crypto assets are stored in a digital wallet. Do your research about secured digital wallets to use, Exchange platforms like Valor Exchange have wallets to store your coins when you trade and channels to move them to other wallets of your choice.