With the crypto market growing at such a fast rate, it is important to do your research before investing in cryptocurrency. Here are a few things we think you need to know…
1. First, consider why you are thinking about investing in cryptocurrency. Is it because people around you are doing it? Do you have a savings goal to reach? Do you want to explore and understand the crypto market better? Having sensible reasoning for choosing to invest in crypto is key. It is a very volatile and tricky market to stay up-to-date with, it is not for everyone.
2. Gain a good foundation of knowledge on what cryptocurrency is and how trading works before you take any steps to open an account or put any money into crypto.
3. Research the different cryptocurrency exchanges and wallet platforms to ensure you choose the right one for you. This could be one of the top trusted exchanges such as Coinbase, Crypto.com, Binance, or others. Compare them all as they all have different cryptos listed, different fees, and different levels of user-friendliness. Only open an account once you are content with your choice.
4. Choose a portfolio of cryptos that you want to invest in after completing research. If you are new to cryptocurrency investing, it would be better to stick to cryptos that are well-established in comparison to small altcoins as the risk will be much higher with those.
5. Plan out your budget. Have a good look at your financials and have a think about how much you can safely invest without affecting your payment commitments and without compromising your savings too much. In other words, only invest what you are prepared to lose, similarly to the stock market. With cryptocurrency being so volatile it is essential that you do not invest money that you cannot afford to lose.
6. Next, and possibly most importantly, is when you are investing in cryptocurrency, you need to know the risks, and how to keep yourself safe from them. This includes setting strong passwords, being aware of hackers, recognising scam coins. We have a full blog piece on Keeping Your Crypto Safe.
7. Finally, timing is everything! As we have mentioned, the cryptocurrency market is full of risk and volatility. Being able to stay on top of the changes, knowing when to buy and when to sell takes good knowledge and keen attention to the market. Buying the dip and selling in the peaks is the most ideal situation.