Examining digital currencies as a form of investment one must face the fact that extreme volatility is a double-edged sword: the loss of 80% of value over the course of one year is absolutely possible. It happened with Bitcoin in 2018. Those “investors” looking for short-term profit were definitely not happy.
In the worst case, a given coin will end up officially dead. No one would expect its price to rise to the moon anytime soon in that case. So what crypto to invest in without saddening consequences?
What cryptocurrency to invest in: the Top-5 list right away
For starters, evaluate the viability of a certain coin with the help of market capitalization statistics. Discard Bitcoin, Doge, Ether, and their derivatives (unless you have grave reasons to believe they’ll bring considerable long-term profit), and look for the promising young coins. You’ll end up with a short list of potential future market leaders:
Tether price is tied to the USD exchange rate, which naturally reduces volatility but doesn’t make it a good investment for short-term profit.
Note that it is not advisable to go for them while Bitcoin’s surge inflates their price. Wait a bit until the market cools down, study the underlying technologies behind the aforementioned crypto, and make a purchase.
How to invest in crypto mindfully
How do you make a smart investment, in general? That requires financial intelligence. Watching top YouTube crypto traders will not suffice: the cost of their mistake may turn out too high for you. Your asset portfolio must be diverse enough to take the risk and recover after possible losses. Losses are part of the game.
- Buy an asset when it’s in the local lowest price. As of the time of writing, early March 2021, the digital currency market was influenced heavily by Bitcoin price fluctuations. Take a look at all-time price charts and better not buy anything that rapidly surges up at the moment (it indicates a bubble) or immediately after the surge (the price will gradually drop to reasonable levels).
- Grow your community. There is always someone more experienced on reddit, discord, or telegram, and they are willing to share the experience. Make friends!
- If you wonder how to invest in cryptocurrency, maybe you should consider investing into material goods that retain and grow their value over time, like precious metals, real estate, or land.
- Choose a crypto currency for investment mindfully. Buying crypto is distantly similar to buying company shares. Crypto developers are companies, and tokens / coins they issue are their shares. What does their company develop, produce, and maintain? A particular technology. Holding their tokens basically makes you their equity stakeholder. Moreover, the tokens sometimes allow to vote for important blockchain changes, i.e. they give executive power on the company board.
How to invest in crypto online
Now that a crypto of your choice stands up to all the quality criteria, it’s time to
Holding coins in a custodial wallet is not ideal because the organization that hosts your wallet, physically owns it. Non custodial wallets are, without a doubt, very convenient: they take care of storage. It is not unheard of that custodial wallets suddenly fail, and, with a non custodial wallet, you can get rid of that fear.
It’s been a while since a whole cryptocurrency exchange went down, but it won’t hurt to take precautions. That is why it is best to pair an exchange account with a local cold wallet.
How to invest in crypto with a cold wallets
We can all agree that investing in crypto that is very demanding on hardware is not a perfect option. How do we know? For instance, BTC blockchain weights 300 GB. Although it is possible to prune it, pruning is not advised. Keeping the full node promotes decentralization and thus contributes to the overall network safety, including the safety of a particular holder’s funds.
It leads us to the obvious conclusion that to be able to operate with multiple cold wallets, one is forced to choose lightweight blockchains or advanced verification technologies. Hardware wallets like Ledger or Trezor help to deal with the storage issue, although they cost a pretty penny.
Where can I go to invest in crypto
As we’ve just mentioned, trading platforms serve as an intermediary storage for crypto assets (presuming that you have a main cold wallet somewhere), and they are the go-to locations to swap crypto for crypto or crypto for fiat money.
- Localbitcoins is the top website for those who need to encash BTC into their local currency or vice versa.
- Bitcoin ATMs are another alternative, but they are still quite rare and have high exchange fees.
- eToro is the best beginner’s choice with its virtual $100,000 practice account and other learning options. One has to pay considerable fees, though.
- Robinhood is distinguishable for zero commissions and similarity with stock trading platforms. The list of supported coins relatively short.
You don’t even have to ask ‘Where can I go to invest in crypto currency?’ if your wallet app or extension has a built-in trading function.
Which crypto to invest in
Here’s a bonus list of potentially lucrative crypto coins. However, remember to invest mindfully: that is, choose an asset that is backed up by an idea, technology, and community you believe in. Cryptocurrencies were initially meant to re-distribute financial power, taking it from overpowered global authorities, decreasing the load of taxes, and promoting privacy.
Stellar Lumens fits if you’re looking through options which crypto to invest in to follow the path of legal development and global adoption. As a proof: this tech is considered as the basis for development of digital currencies on a national scale.
Meanwhile, Tronix gains massive following in Asian countries, PRIZM attracts some interest in CIS countries, and Enjin is trending in the community of gamers.
Anyways, there are hundreds of promising options, which crypto to invest in. Make sure to check another article we did on this topic, and good luck investing!