So you’ve heard about cryptocurrencies and how they can earn you big ROI faster, and now you’re interested in them. You probably don’t know how volatile cryptocurrencies can be. Let me hint you: Bitcoin, being the biggest and most popular cryptocurrency, can do as much as -10% in a day, it has done it before. It can do over 20% loss in a week. But as much as the loss can be, the gains can also be, even bigger. There are already speculations of Bitcoin doing over 50% up by the end of Q1 2025. Now it seems to be worthy of the risk. The volatility is the downside and also the upside of cryptocurrencies.
You probably know that Bitcoin isn’t the only cryptocurrency, there are thousands of cryptocurrencies today, hundreds of them are tradable on popular exchanges (including tokens). The popular ones are Ethereum, Solana, TON, Dogecoin, and Ripple and each of them goes up and down in price. This article will teach you how you can invest in any of these coins as you like.
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Difference between Investing and trading
Before you move on, it’s important to understand the contrast between Investing and trading, mixing both together might make you bad at both.
The main difference between both is just the timeframe at which traders and investors execute their trades. Investors are long term traders, they usually set disciplined plan to meet specific financial targets over a long period of time, usually in months and years.
Traders on the other hand are speculative in nature. They often execute several trades within short period of time. There are different types of traders though, the ones that trade within hours, within a day, within a week or weeks, there are names for all but i won’t mention them. The focus of this article being investment.
Prepare your funds and decide risk tolerance
Normally, the first step into investing in anything should be to set aside the funds. Make sure any money you’re investing will not get in the way for your daily life. Decide your risk tolerance and always be sure you can be okay if you lose the money.
Pick an exchange or wallet
Once your set out your investment funds, the next thing to do is to research and pick a medium for which to hold your investments.
There are mainly two options for this, you could hold your investment in a self custody wallet or you could chose to hold them in an exchange. For the sake of the new comers in the market, we’ll focus on exchange.
There are a lot of options when it comes to cryptocurrency exchanges. Make sure that anyone you’re chosing is well regulated in your home country or country of residence, to enable ease of usage (deposit and withdrawal).
The popular ones include Binance, Bybit, and OKX.
Deposit on the exchange
On choosing your preferred exchange, the next thing to do is to deposit your money through a convenient option. There are many deposit options on most exchanges, you could chose P2P, bank deposit, debit card, and so on.
Are you interested in entering the space of crypto futures trading but do not know how or where to begin? This ebook is therefore not a best-selling book on the art of understanding and mastering the rules of trading in crypto futures; it is rather a book written basically for beginner, disintegrating into practical and straightforward steps, the complex concepts so as to allow you gain confidence to act like a professional trader. Check it out on selar[clike here]
Do Market research (fundamental analysis) and Fill your bag
If you are to invest in stock, the first thing you may want to do is a fundamental research on the company. What niche or industry are they focused on? How serious are they? You will check their products, their company and staff’s profiles, pitch, business plan, white paper, and so on. That’s exactly what you need to do for crypto assets.
You need to explore the crypto market and find high promising cryptocurrencies to invest your money in. There are a lot of influencers on social media who are not financial advisors, most of them do mention promising coins that’s worthy of consideration, while this is usually inadvisable, the best option is to learn fundamental analysis yourself to be able to identify really promising investment options.
Fundamental Analysis (“FA”) is the method of assessing the intrinsic value of a security and then comparing its current market price to help with investment decisions.
Major coins that are usually recommended or are recommendable include Ethereum, Solana, TON, Dogecoin, and SUI. A popular slang in the crypto market is “DYOR”, it mean to always “Do Your Own Research”.
Manage your risk and diversify your portfolio
When you are ready to invest, you will need to also consider how you want to invest. Popular cryptocurrency investing strategies include buying fractions of cryptocurrencies, volatility-based investment strategies, dollar cost average investing, buy and hold investing, profit-taking investing, and lump-sum investing.
One thing you can do but shouldn’t do is to put all your money in a single asset, you might regret it. Instead, have many options and spread out your money across various assets, this way you can maximize profit and mitigate loss. Who knows, the last asset in your portfolio might make up for the loss from all other assets.
Set a financial goal
Once you know what to buy, don’t just buy and watch, make sure you set a profit target so you can know when it’s time to take profit and leave the market.
Let’s say for example, you set a target of 100% gain on a particular asset, make sure you take profit once you hit, In many cases, staying greedy and ignoring your profit target might end up in losing it.
Take note
The cryptocurrency space is evolving rapidly, so it’s also important to pay attention to new developments that may affect your crypto holdings.
It’s also important to know that most cryptocurrencies are backed by nothing at all, not hard assets and not even cash flow of an underlying entity. In the case of Bitcoin, for example, investors exclusively rely on someone paying more for the asset than they paid for it. In other words, unlike stocks, where a company can grow its profits and drive returns for you that way, many crypto assets must rely on the market becoming more optimistic and bullish for you to profit.
Are you interested in entering the space of crypto futures trading but do not know how or where to begin? This ebook is therefore not a best-selling book on the art of understanding and mastering the rules of trading in crypto futures; it is rather a book written basically for beginner, disintegrating into practical and straightforward steps, the complex concepts so as to allow you gain confidence to act like a professional trader. Check it out on selar[clike here]