World’s billionaires and tech minds are providing their constant support to increase the popularity of crypto investments. Nowadays, investors can use cryptocurrency exchanges like Wazirx to buy and sell crypto. It is the most trusted bitcoin and cryptocurrency exchange.
But before planning to invest in currencies, you must know that crypto is a high-risk investment. If you start investing without proper knowledge, you can also face substantial monetary losses because cryptocurrencies are volatile. Here we will discuss some beginner’s tips that can help you stay away from harm or loss.
How Can a Beginner Invest in Crypto?
The first and foremost step for investing in cryptocurrency is choosing your cryptocurrency exchange platform. And the next is creating an account and depositing fiat currency. After that, you have to place the order and select a storage method. It is straightforward to do. Let us learn about these steps briefly so that you can get a clear idea regarding how and where to begin to invest in cryptocurrency.
- You need to select your broker or a cryptocurrency exchange. Both of them allow you to buy cryptocurrencies. But there is a slight difference. A crypto exchange is a platform that will enable you to trade cryptocurrencies with other sellers and buyers. Some of the leading and popular crypto exchanges are Wazirx, ByBit, etc. It would be best if you chose an exchange that allows you to purchase with a fiat currency.
Because some exchanges accept only crypto, that means the user will need one cryptocurrency to buy another. And as you are a beginner, you will not have any cryptocurrency with you, so to purchase crypto, you must go for a cryptocurrency exchange that accepts fiat currency.
While a cryptocurrency broker offers a much more straightforward and effortless trade than a cryptocurrency exchange, the fees here may be higher, but it is easy to use. Robinhood and SoFi are examples of popular cryptocurrency brokers.
- As you have chosen exchange or broker, the next step is signing up on the platform. After that, the platform demands verification of the client through different methods. This process is critical to avoid fraudulent activities. In this process, you will have to submit a scanned image of your driving license or passport. Then to match the face with the scanned image, the platform will also ask you to upload your selfie.
- After the verification, you will have to deposit cash. Because to buy crypto from brokers or exchanges, you will require fiat currency. For depositing money, you can use either credit or debit cards or make through wire transfer. After this, you will have to wait for a few days to buy crypto using that money. Some platforms offer instant delivery, and some take time.
- Once you can use the money you deposited, choose the cryptocurrency you wish to buy. The cryptocurrency exchange will offer you a variety of popular cryptos, such as bitcoin and Ethereum. Cryptocurrencies have ticker symbols for their identification. Some of the popular cryptocurrencies are listed below with their ticker symbols:
- Cardano (ADA)
- Bitcoin (BTC)
- Ethereum (ETH)
- Tether (USDT)
- Cryptocurrency exchanges have a potential risk of hacking, so there are chances to lose your money if you do not secure them. If you buy crypto from brokers, you will have to keep the money in your account, but you can transfer it to a cold or hot wallet if you buy cryptos from a cryptocurrency exchange.
Now, what is a hot or cold wallet? Hot wallets operate in devices connected to the internet, such as computers, phones, tablets, and other devices. Though this storage method is convenient, your fund is at risk of theft because the money is stored online in the hot wallet and has a constant internet connection.
While on the other hand, a cold wallet is not connected to the internet, so there is no risk of hacking. You can carry your wallet along with you in the form of a USB. But the drawback is that if you lose it or the device breaks or malfunctions, you will not regain your cryptocurrency.
Things to keep in mind while investing in cryptocurrency
It would be best if you were very careful while investing in preventing significant monetary losses. Some of the tips or points to remember are:
Research before committing:
Before any investment, you must be clear about it. So for that, you can read the white paper. The white paper of the crypto project will allow you to know everything about that currency. Reading the white paper will let you get familiar with the details of that particular currency and decide whether it is worth investing in or not.
Create a trading plan:
It is crucial in crypto investing and is the best beginner’s tip. Your trading plan will tell about how you sell and buy cryptocurrencies. It should include analytics, market focus, and risk map. Once you have a trading plan with you, stick to it. It will help you in targeting those trade that fits your guidelines. Change the plan only in case if you get a better one.
Losing money while trading is an unwanted thing but not an avoidable one at some points. But you can set some limits on the loss. A beginner must know when to cut losses using stop-loss.
Avoid waiting for a particular time:
Entering and exiting the market without any losses is not a practical thing. So stop timing the market because it will require a lot of time to go through long reports and financial statements. Instead, enter the market and make an investment and exit when it gets too uneasy.
Educate yourself about crypto scams:
While entering the crypto world, you must be aware of cryptocurrency scams. It is crucial to avoid the loss. If you are unaware of it, then you become an easy target of scammers.
Invest what you can afford to lose:
One of the best tips for a beginner is investing what you can afford to lose. Don’t get driven by sensational tweets and headlines. Or else you will end up losing your money because of your emotions. Likewise, don’t invest because people around you are investing; instead, stick to your trading plan and do your research to decide how much to invest.
Choose one or two cryptos initially:
It is the best idea to choose only one crypto in the beginning. Because as you are new to this world, all the slang and terminologies will be hard to learn initially, and if you invest in more coins together, it will not be easy for you. So, first of all, conduct a fundamental analysis of one crypto. Then you can further make investments according to your progress.
Take the help of reliable sources:
You will get an endless amount of information regarding cryptocurrency these days on WhatsApp and YouTube. But do not trust them unless they are from a trusted source. Do your research and analysis from a reliable source.
The article was all about the basics of cryptocurrencies for beginners. In short, you have to conduct a well-research and stick to your trading plans. Do not let your emotions carry away your decisions. Trust only credible sources and invest confidently. Do not stress yourself, and try not to lose your crypto key. Otherwise, you can lose your access to cryptocurrency. Safeguard it and make investments carefully.