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How To Start Investing In Cryptocurrency: A Beginner’s Guide

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How To Start Investing In Cryptocurrency: A Beginner’s Guide

Cryptocurrency Investing For Beginners: A Comprehensive Guide

how to start investing in cryptocurrency

Key Takeaways

  • What is cryptocurrency?
  • How to invest in cryptocurrency
  • Types of cryptocurrency
  • Investing in Blockchain
  • Tips to know before investing in cryptocurrency

Are you ready to start investing in cryptocurrency? 

“Cryptocurrency” is such a mysterious concept, isn’t it? Many people have difficulty understanding the technology that operates cryptocurrency, or how it works as an investment vehicle. 

Since the emergence of Bitcoin, the worth of cryptocurrency has skyrocketed beyond many investors’ expectations. We intend to shed light on this concept.

Cryptocurrency is absolutely on fire these days with 2021 being a favorable year and many investors are looking to profit on its white-hot rise.

Experienced traders have been speculating on crypto for years, but what if you’re new to the market and looking to get a piece of the action?

A little more than a decade after the first cryptocurrency, Bitcoin, was launched, the industry that’s developed around the new technology has seen explosive growth.

Today, there aren’t just cryptocurrencies available, but a few blockchain-based digital assets, including crypto tokens and NFTs. 

There are several methods for Start Investing in Cryptocurrency. Each strategy will be dependent on whether you want help managing your investment or if you want to align with the ethos of the ecosystem and “be your own bank,” there are opportunities for those just starting out. 

Have it in mind that investing in cryptocurrency is still risky, though it can be potentially extremely profitable — you stand a chance to lose the entire value of your investments —so make sure you’re in a financially sound position and take the time to assess your risk appetite before putting money towards the asset class.

Financial due diligence should be implemented also to assist in informing your cryptocurrency investment decisions 

This beginner’s guide will serve as an instruction manual to teach you how to invest in cryptocurrency and how crypto works, should you decide it’s right for you.

What Is Cryptocurrency?

A cryptocurrency is a virtual currency that’s held and distributed online. In reality, it’s a digital asset that may gain or lose value in a similar fashion to stocks and bonds.

It is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend.

Whereas a cash currency incorporates paper bills and metal coins, a cryptocurrency uses a virtual “coin,” “token,” or “unit.” You can purchase a coin/token/unit from any company that facilitates cryptocurrency exchanges, and you can trade, buy, or sell with other people who own crypto—not unlike stock trading in corporate America.

What makes cryptocurrency different from standard currency (besides the fact there’s no physical cash) is that cryptocurrency is “decentralized.” There’s no central authority that governs the currency.

For example, the Federal Reserve or Central Bank of any nation manages the national currency of the United States, influencing prices, interest rates, and the overall supply of money being circulated in the economy. Cryptocurrency functionality is in direct contradiction to that…

However, a cryptocurrency is generally maintained by a “system.” The system—which is managed by a cryptocurrency company—tracks all the units of cryptocurrency and their owners. The system will also determine when new crypto units can be created. 

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But cryptocurrency systems have no central location or server where units are stored. There are no virtual banks.

Further, each coin of cryptocurrency consists of a unique line of program or code. This means that it can’t be copied, which makes them easy to track and identify as they’re traded.

Bitcoin is by far the largest and most popular cryptocurrency system in the world. In fact, some financial experts define any cryptocurrency that’s not Bitcoin as “altcoin.” That’s a testament to Bitcoin’s dominance.

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How Does Cryptocurrency Work?

You might be wondering, “What gives a cryptocurrency unit its value?” Why cryptocurrency is a good investment

For most investment assets, the value is determined by market factors. Let’s take into consideration the real estate market, for example. What determines the value of a property? A property might be priced higher if it’s in a strategic location, or if it’s more luxurious, or if it’s in a neighborhood that’s likely to see an increase in home prices.

What about stocks? Stock value is generally determined by the success of the company (or the impending success of the company). Higher profits mean higher dividends, which means higher stock prices.

The value of Cryptocurrency is also tied to the marketplace but in a different way. There’s no physical asset that’s affected by the local economy. And the value isn’t determined by corporate profits. 

The value of a cryptocurrency unit is entirely dependent on whether or not people want to buy cryptocurrency units.

Are you serious… what??

You read that correctly and it’s crystal clear. The value of cryptocurrency is based on nothing but consumer interest in buying cryptocurrency.

If lots of people are buying crypto, then the value will rise. If people stop buying crypto, then the value will fall.

This is a perplexing concept for both cryptocurrency beginners and veteran investors. But it’s not such a puzzling idea to high-risk investors who frequently trade in volatile assets. 

A “volatile asset” is an asset that may experience large and rapid changes in value. Penny stocks are a common (and more “socially acceptable”) type of volatile asset. 

They are high-risk assets for the average investor, but they have the potential to yield extremely high returns to those wolves of Wall Street who carefully study marketplace activity and invest with a Trusted Cryptocurrency Investment Company.

In the same vein, cryptocurrency can yield high returns if an investor takes advantage of marketplace surges, employs financial due diligence, and implements an effective Cryptocurrency Investment Strategy to capture those high returns from price swings of cryptocurrency..

What Do You Need To Invest In Cryptocurrency?

While the idea of cryptocurrency can be confusing to crypto beginner investors, the requirements to get started are minimal. If you want to learn how to invest in cryptocurrency, you only need:

  • Personal identification documents
  • Bank account information
  • Bitcoin Wallet
  • Secure internet connection

That’s it! It is possible to purchase cryptocurrency through a stockbroker as well. In this case, most of your personal and financial information will be on file already. Now that you have what you need, let’s start investing.

How To Invest In Cryptocurrency In 3 Steps

If you’ve decided that you’re willing to take a risk on crypto, you might be asking yourself, “How do I invest in cryptocurrency?”

Every cryptocurrency is a little bit different, but assuming you want to purchase for-profit, let’s cover the steps for how to start cryptocurrency investing for currencies like Bitcoin and Litecoin:

  1. Choose a trusted cryptocurrency investment platform or exchange
  2. Start purchasing or investing cryptocurrency
  3. Implement your Cryptocurrency Investment Strategy
  4. Store your cryptocurrency in a “wallet

1. Choose A Trusted Cryptocurrency Investment Platform or  Exchange

This is the most essential step to take before you start investing in cryptocurrency. It is crucial to only deal and invest with Trusted Cryptocurrency Investment Companies with a track record of Trust and Credibility. 

After selecting which crypto platform or exchange you want to start investing in cryptocurrency with, you will be able to make an account with them. 

There are many options open to you, but the most popular crypto platforms or exchanges are:

2. Start Investing in Cryptocurrency

These crypto platforms enable you to purchase crypto with your debit card. Typically you’re able to choose between different cryptocurrencies, like Bitcoin and Ethereum. 

A single coin might be valued at thousands of dollars. However, most crypto platforms allow you to buy a fraction of a coin, which is far more affordable for first-time investors. Just like a stockbroker, any of the crypto companies will charge fees for every transaction you make.

Make sure to read in detail about their F.A.Q, most of the platforms have live chat support assistant, for example, Bitcoininvestmentrex one of the World’s leading Cryptocurrency Investment Company have dedicated live chat support to assist investors to Start investing in Cryptocurrency smoothly with assistance with onboarding and also inquiries about crypto plans. 

3. Implement Your Cryptocurrency Investment Strategy

Whether you are day trading, swing trading, staking, lending, or hodling, you must definitely have your crypto investment strategy to employ at this stage. 

Most of the crypto platforms don’t help investors with crypto investment strategies, while others provide the option of copying successful strategies for a fee.

Popular Crypto Platforms like Bitcoininvestmentrex.com provide expertly vetted and curated cryptocurrency investment plans that pose effective crypto investment strategies that help you earn high yield. 

4. Store Your Cryptocurrency In A “Wallet”

Once you’ve purchased or invested a unit of crypto, it’ll be added to your “wallet.”

Not your actual wallet, of course, but a virtual wallet that you’ll receive when you open your account with an exchange. The wallet will hold the codes for all your cryptocurrency.

There are software wallets and hardware wallets. A software wallet is just a software program that holds your crypto. You need it for active trading, and you’ll typically get one when you open an account with an exchange.

A hardware wallet is a physical device that holds crypto. It looks like a USB drive, and it’s more secure than a software wallet, but it’s not necessary unless you’re buying a huge portion of crypto.

How Cryptocurrency Investing Works

If you want to start investing in cryptocurrency directly, then you can use the World’s Leading Cryptocurrency Investment Company. Here’s how to buy cryptocurrency through an exchange:

  1. Choose the Best Cryptocurrency Investment Company. Your best bet is a reputable, well-known and Popular Cryptocurrency Investment Platform Bitcoininvestmentrex.com that makes it easy and safe to start investing in bitcoin.
  2. Establish an account with the Cryptocurrency Investment Platform. You will need to provide your information and verify your transaction ID to complete the registration process.
  3. Decide which cryptocurrency Investment Plan you want to invest. You can choose to invest in one or many cryptocurrency investment plans available on Bitcoininvestmentrex.com. Research your options to help you decide.
  4. Submit your investment details for your chosen crypto investment plan. Follow the steps required by the Bitcoinnvestmentrex.com to submit and complete an investment order for one or more cryptocurrency investment plans.
  5. Store your cryptocurrency profit in a digital wallet. After your cryptocurrency investment account is created, the maturity period of your plan will determine when you will receive your profit in your digital wallet. 

IMPORTANT: As an investor in cryptocurrency, you need to decide how much of your portfolio to allocate to digital assets. You must have a bitcoin wallet funded with the desired investment amount to be eligible to Start Investing in Cryptocurrency with Bitcoininvestmentrex.com the World’s Leading Cryptocurrency Investment Company.

A best practice among investors is to periodically review your entire portfolio to perhaps rebalance your holdings. That might mean increasing or scaling back your crypto exposure, depending on your investment goals and other financial needs.

With expert cryptocurrency account managers assigned to you when you start investing with Bitcoininvestmentrex.com, you get direct access to winning strategies and excellent wealth management. 

Cryptocurrency Investing for Beginners

Investing in cryptocurrency is a risky investment asset, but could be extremely profitable. 

The prices of cryptocurrencies, even the most established cryptocurrencies, are much more volatile than the prices of other assets like stocks. 

The prices of cryptocurrencies in the future could also be affected by regulatory changes, with the possibility that cryptocurrency being backed by law and adopted by the government as seen by the creation of E-Naira by the Central Bank of Nigeria. 

Many investors are continually attracted to the potential upside of investing in crypto. If you decide to invest in cryptocurrency, it’s vital to carefully research any digital coin before buying it. 

Pay attention to transaction fees when making crypto purchases, as these fees can vary widely among currencies.

The cryptocurrency space is evolving rapidly, so it’s also important to pay attention to new developments that may affect your crypto holdings. 

Cryptocurrency investors need to understand the tax consequences of using crypto, especially if they purchase something or sell their crypto investments.

Given the riskiness of cryptocurrency as an asset class, it’s especially important not to invest in crypto more money than you can afford to lose. We always insist investors only forfeit 15% of their portfolio to crypto and don’t FOMO.

Top 3 Best Cryptocurrency For Beginner Investors

Before Investing in Cryptocurrency, it is important to know the types of digital currency. 

There are many different types of cryptocurrency systems that you can invest in. Bitcoin is arguably the progenitor of all crypto.

It has emerged for over 10 years and it’s the largest cryptocurrency system in the world, with a market capitalization of about $128 billion, and has gained massive mainstream adoption. Here are some of the other cryptocurrencies you can buy:

  • Bitcoin: Bitcoin is a good pick for any cryptocurrency beginner. Every currency exchange or platform supports Bitcoin, which means that you’ll know what you’re buying or investing into. Bitcoin is merely a form of digital cash. You can use it as a means to exchange currency and value, which gives it a competitive advantage.
  • Ether: It’s a cryptocurrency, but the main focus is used for purchasing and developing blockchain, but is currently used for transactions. It is the progenitor of Altcoins.
  • Cardano: This cryptocurrency is primarily used to store private data. An alternative to Ethereum, it’s more energy-efficient and is thus less expensive.
  • Bitcoin Cash
  • Litecoin
  • Binance BNB
how to start investing in cryptocurrency

How To Choose The Best Cryptocurrency To Invest In

It’s a piece of cake to jump on any crypto bandwagon just because someone said it was a worthy investment. However, it would be incumbent on you to conduct your own research and implement financial due diligence. 

When you buy cryptocurrency, know that it holds zero intrinsic value. Instead, it represents ownership of a digital asset. 

It’s the price is simply determined by public perception of its value, so you need to believe in the value of the cryptocurrency you choose to invest in. 

How do you create these beliefs? By conducting your own research. Put in the work by reading white papers and come to an understanding of which cryptocurrencies may increase in value in the future before making an investment decision.

What Is Blockchain?

Blockchain is a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system.

A blockchain is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain. 

You might be lost in wonderland and perplexed, “What makes cryptocurrency an asset? How can something that has no physical existence be worth any money at all?” How does it derive all its computational features?

The United States dollar used to be backed by physical assets: first, gold, and then, silver. Every bill or coin would be linked to a unit of gold or silver so that it had a physical value of sorts. 

Nowadays, the American currency is not backed up by anything, but every bill and coin has a value that the federal government assigns. 

Here’s the main problem that cryptocurrency aims to solve: how can something on the internet have individual value? A $1 bill has value because it has been printed and assigned value by the federal government. Nobody can duplicate it. It’s yours.

Digital assets are more complicated. Take a digital photo, for instance. A digital photo is made from computer code. Let’s say that you emailed a digital photo to your friend. 

Your computer copies the code and transfers it to your friend over the internet. Now a single piece of code exists on both your computer and your friend’s computer. 

You’ve duplicated the code, so it can’t have any individual worth. And who owns the digital photo—you or your friend? It’s unclear.

Now, this issue of ownership is being resolved by blockchain with cryptocurrency being the medium for ownership and value. 

Cryptocurrency uses a type of coding called “blockchain” to give a crypto unit an individual value and assign ownership to a single person or entity, for maintaining a secure and decentralized record of transactions. 

The breakthrough with a blockchain is that it guarantees the fidelity and security of a record of data and generates trust without the need for a trusted third party.

A blockchain serves as a  distributed database that is shared among the nodes of a computer network. As a database, a blockchain stores information electronically in digital format.

Blockchain splits a single code into multiple codes that are stored across many different computers.

For example, let’s say that the code for a crypto unit was 13BD22.

  • “13” is stored on Computer A.
  • “BD” is stored on Computer B.
  • “22” is stored on Computer C.

If a hacker wanted to duplicate the code, they would need to hack all three computers to access the entire code. Of course, in a real blockchain, the code would be much longer and spread across thousands of different computers.

Every computer that holds a piece of the code is called a “node,” and together, these computers comprise the “public ledger.” 

The purpose of the public ledger is to ensure that all cryptocurrency data is accurate. Whenever there’s a change in data, every computer checks its records against one another. It’s an effective way to detect hacking.

But if you wanted to make legitimate changes to the data (like if you sold your crypto unit to someone else), then you’d just use a cryptographic key, like a password.

 The smart thing about blockchain is that you can only add data to code. You can’t erase any data. That’s to ensure that the ownership history will always remain intact.

First came into conception as a research project in 1991, the blockchain concept predated its first widespread application in use: Bitcoin, in 2009.

In the years since, the use of blockchains has exploded via the creation of various cryptocurrencies, decentralized finance (DeFi) applications, non-fungible tokens (NFTs), and smart contracts.

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How To Invest In Blockchain

Blockchain is often associated with cryptocurrency, but it’s a technology that has it’s dedicated field of study It might be a good investment option in its own right.

Several large technology companies run blockchain operations, such as IBM, Oracle Corp., and Visa. 

You might consider investing in Cryptocurrency Investment Companies heavily involved with blockchain like Bitcoininvestmentrex, investing in one or any of their cryptocurrency investment plans.

These Cryptocurrency Investment Plans have performed very well over the past year and have generated good returns. The blockchain sector, as a whole, has outperformed the market.

Many investors are wary about investing in blockchain because they’re afraid of the volatile nature associated with cryptocurrency.

But it’s important to know that investing in companies that run a blockchain is not the same thing as investing in cryptocurrency.

Investing in the stock market is less risky than investing in crypto though both carry considerable risks. The stock market crash and depressions of 2008

Tips to Know Before Investing in Cryptocurrency

Before you start investing in cryptocurrency, there are couple of things you should know

  1. Capital Gains Tax: For tax purposes, cryptocurrency is considered an asset, like a stock or property. When you sell crypto and make a profit, you’ll have to pay capital gains tax on what you earned. Keep this in mind when you’re budgeting for the year and planning for taxes.
  2. Short-Term Investing: Because cryptocurrency is a volatile asset, many investors would consider it to be a short-term investment rather than a long-term one. It’s possible that in the future, cryptocurrency may become a stable investment and that long-term holdings will yield significant profit. But that’s a big “if.” Since cryptocurrency values have been decreasing, you might have a better chance of making a profit by timing the market. That’s incredibly risky, but crypto is high-risk. If you want your money to appreciate over a long period, you’re better off investing in long-term bonds, index funds, or IRAs.

Is Cryptocurrency A Good Investment?

Hopefully, you now have a pretty good understanding of cryptocurrency. Now you might be asking yourself, “Is cryptocurrency a good investment?”

Investing in cryptocurrency is not for everyone. The prices of cryptocurrencies can be volatile, which makes investing in crypto likely a poor choice for conservative investors. 

If you are interested in assuming greater risk as an investor, then investing in one or more cryptocurrencies may be right for you.

Cryptocurrency is a high-risk investment because, as mentioned earlier, it’s a an asset that is very volatile in nature.

Here’s a scenario that’s likely to happen in cryptocurrency. Let’s say you buy a few units of Bitcoin. Something happens that drives a large number of people to purchase Bitcoin:

  • Endorsements: Public figures or business leaders promote Bitcoin, which entices a larger number of people to buy.
  • Press: Bitcoin enters the public consciousness due to a movie, article, or journalistic piece, and it leads to an increase in purchases.
  • Manipulation: Stock manipulators purchase a large number of Bitcoin units. They contact hundreds or thousands of amateur investors and convince (or coerce) them to purchase units, as well.

When everyone starts buying the cryptocurrency, the value of each crypto unit increases sharply. But remember: crypto is a volatile asset, and the value may fall as quickly as it rises.

If you sold your units early, you could make a huge return on investment. That’s what the stock manipulators do. They’d sell their units when the demand is highest and reap a large profit.

But it’s difficult to determine the right time to sell your holdings. Timing the stock market is hard enough, but it’s even difficult to time a volatile market. 

The cryptocurrency could fall dramatically in value in just a couple of days or even a couple of hours. 

If you didn’t sell your units before the demand cools, they could depreciate in value and generate a substantial loss.

Furthermore, professional investors who don’t mind the risk could potentially earn huge profits, so long as they pay close attention to the cryptocurrency market and act quickly when there’s a surge in demand.

Again, cryptocurrency is a high-risk investment, and it shouldn’t be the foundation of your investment strategy. Know that cryptocurrency has generally been decreasing in value year to year.

First, you should prioritize low-risk investments, like bonds and rental properties. Then you should plan some medium-risk investments, like stocks or fix-and-flip properties. A high-risk investment, like cryptocurrency, should only be the tip of your investment pyramid.

Like all high-risk investments, you should try and generate a passive income that can adequately absorb any losses you might take on crypto.

Bitcoininvestmentrex, the World’s Leading Cryptocurrency Investment Company makes it easy and safe to invest in cryptocurrency. 

The implementation of an effective cryptocurrency investment strategy reduces risk and increases capital appreciation and profit preservation.

Investing in Cryptocurrency through any of their plans makes it a good investment. 

Merits Of Investing In Cryptocurrency

Investing in cryptocurrency is popular because it’s extremely profitable and provides advantages, such as diversification, return potential, and utility. 

Investors like to diversify portfolios as a way to spread risk, but also to increase the odds of striking gold. 

Crypto is a popular option for diversification because it has offered strong returns, as especially the number of crypto uses and applications increases. 

Finally, it’s an investment that you can actually use for transactions. Most institutions like Paypal, Cash App, Microsoft, Fidelity, Tesla, and SpaceX currently accept bitcoin for most of their services.

Demerits Of Investing In Cryptocurrency

However, be aware that cryptocurrency also comes with some drawbacks to consider. It’s known to be highly volatile, and there is no central regulation that provides any oversight. Enter at your own risk.

how to start investing in cryptocurrency

How much money do I need to buy cryptocurrency?

You can invest in Bitcoin or another cryptocurrency without a lot of money. Using Coinbase, for example, you can buy cryptocurrency with as little as $2 in your local currency or  Bitcoininvestmentrex that provides good plans at affordable rates.

How can I invest in Bitcoin?

You can invest in Bitcoin directly by using one of the major cryptocurrency exchanges, such as Coinbase or Binance. 

Another way to gain investment exposure to Bitcoin is to invest in bitcoin investment plans that give significant Bitcoin exposure, such as a Bitcoin Investment company. A third option is to invest in a Bitcoin-focused fund such as an exchange-traded fund or bitcoin mining. 

Tips to Protect Yourself While Investing in Cryptocurrency

You must take extra precaution to protect yourself — and your capital with any investment type. 

There are a few common concerns when it comes to cryptocurrency: credibility, security, privacy. Many investors are skeptical of crypto platforms and are hesitant to start investing.

A great way to mitigate these concerns is by thoroughly researching the crypto you want to invest in and what’s behind the platform.

Look up who’s behind the marketplace you are interested in and gather more information about them. Research how old the company or cryptocurrency is and in what stage of development the platform is in.

Cryptocurrency is unfortunately susceptible to hackers and other technical issues that simply don’t impact other investments as frequently. 

For this reason, it is crucial that you fully understand the marketplace you choose to work with.

It is not unusual to choose platforms high profile investors are known to work with as a starting point. This, along with a sound company structure, can help serve as a sign of stability for that marketplace.

As you continue to learn how to invest in cryptocurrency, take the initiative to read the fine print before you start an account. 

The company’s prospectus will provide you with insight into the company’s inner workings. This information can help provide you with peace of mind and let you know exactly how secure your investment will be.

Conclusion

Cryptocurrency is a digital asset that uses blockchain technology to assign ownership to each unit. 

Cryptocurrency value is entirely dependent on the demand in the crypto market—cryptocurrency units have no intrinsic value. 

Cryptocurrency is a high-risk investment because it’s a volatile asset though it can be extremely profitable, and investors should buy or invest with caution. It’s easy to learn how to invest in cryptocurrency. Just open an account at a cryptocurrency investment platform or exchange, which acts as a broker.


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