If you were to sit in a cafe for a while, subtly eavesdropping on people’s conversations, the chances are high that you would hear the world cryptocurrency at least once. It’s all the craze recently. Everybody has heard about Bitcoin and the news of people becoming overnight millionaires mining virtual money. Cryptocurrencies are nowadays bursting into headlines every day.
That is no wonder since it’s an enormous and growing market that shows no signs of stopping. If you’re interested in investing and want to find out about the best crypto trading platform there is, you’ve come to the right place! Below is a guide to help you understand the basics of the crypto business. It may seem daunting at first, but you will learn how to invest in crypto in a safe and lucrative manner.
Want to get into the crypto business? Choose the best crypto trading platform and live the life of the charts.
What are cryptocurrencies, and how do they work?
Some say that these immutable and exchangeable cryptographic tokens are the future of finance. Their advocates argue that Bitcoin and many other cryptocurrencies will eventually substitute the Dollar, Euro, and other world currencies. However, let’s talk about the current situation for you to get a firm grasp on cryptos and how to invest in them with as little risk as possible.
Simply and shortly put, cryptocurrency is basically a digital version of money. You store it in a digital wallet representing a value in the economy, which you can later trade for goods and services with others. There is no physical money involved nor a traditional banking system in place.
Cryptocurrencies are based on blockchain technology, a chain of information registration and distribution uncontrolled by a single institution. That’s right – there are no banks included in this record of digital transactions. Simply put, blockchain technology eliminates the middleman, which allows direct transactions between buyers and sellers. Consequently, the technology serves to lower or even eliminate transaction fees. That right there is a huge attraction point for cryptocurrencies and why many people turned to crypto investments.
The most known and popular cryptocurrency is Bitcoin, a currency regularly tracked in every major financial media there is. However, hundreds of cryptocurrencies are out there, and many of them are dying and emerging as we speak. The visionaries that took a leap of faith before the price explosion in 2017 and bought a cryptocurrency were probably the most significant investments in many portfolios. Luckily, these things are somewhat cyclical, so you’re in for a treat too. Provided you find a good crypto trading platform, of course. Don’t worry; we’ll get there fairly soon.
Here’s the breakdown for newbies and beginners out there.
Cryptocurrencies are quickly moving into the mainstream, but many are left confused. Crypto is money, but there’s no bank. It is basically an asset, however, unattached to anything physical. It’s a digital form of money intended to work in the same way as regular money. You keep it in a “wallet’ used to represent value in the economy. And you can trade the money with others for goods and services.
Cryptocurrency is recorded as numbers in a ledger used to represent a given currency a person has. Unline today’s banking system, all of it is entirely decentralized. Instead of in the bank, cryptocurrencies are recorded in the blockchain spread across the networks. Transactions are public and verifiable, but the blockchain belongs to nobody in particular.
What are the main benefits?
Besides eliminating the middleman and being totally decentralized, several majorly good reasons to turn to cryptocurrency investments. First of all, we might be able to ditch Euros or Dollars and work with the free and hard world currency in the future.
Financial experts are forecasting the great fall of a Dollar imperium, assuming it will inevitably happen at some point. If you want to hedge your net-worth against that issue, you should definitely invest in cryptocurrencies.
The excellent benefit of cryptocurrencies is that you can own and use them anonymously. Moreover, they are subject to price explosions that can make it feel like a real investment.
Supporting the free money for the whole world and trust in digital technology before bank lords is another appealing reason to invest in cryptos. Here is the best crypto trading platform!
Disclaimer: Apart from the mentioned reasons, there are also wrong reasons to plunge into cryptocurrencies. The desire to become instantly rich is one of them. Be careful not to fall victim to the hype surrounding every cryptocurrency bubble. There are many, but buying excessively at its peak, without understanding the cryptocurrency philosophy, is a gateway to downfall.
Yes, early investors in Bitcoin and Ethereum made the big dough in pure profits. This news flooded the internet, which made many people desire a piece of that crypto pie. However, as many speculators entered the market, it took a massive fall. This was inevitable.
You don’t want that to happen to you. That’s why this blog will guide you to make intelligent first steps into investing in cryptocurrencies.
Is cryptocurrency business for you?
Crypto trading can get very exciting and lucrative, but it’s not everyone’s type of “job.” However, if you’re the type of person okay with taking calculated risks, you might be in for a successful period. The volatility of cryptocurrencies grossly exceeds that of any other investment class. They simply aren’t a typical type of investment. There are risks, so you should be aware that you maybe won’t be able to liquidate your crypto assets.
The important lesson here is: risk only as much money as you can afford to lose. Also, remember there are many coins other than Bitcoin. Up until late 2016, Bitcoin was the coin to invest in to succeed. Other “Altcoins” existed primarily to keep miners’ GPUs going, pump the price, and dump the coins. Well, not anymore. Yes, Bitcoin still is the boss of cryptocurrencies, but its share of the whole crypto-marked fell to around 50 percent. There are new and exciting cryptocurrencies coming out constantly that are worth investing in.
So what should you do if you want to get in on the crypto craze?
As already mentioned, with cryptocurrencies, you don’t need banks, ATM’s or any other banking connections to transfer money to other people. Cryptocurrencies rely on blockchain technology to get rid of the middleman altogether. Blockchain is great because it is decentralized; there is no entity in charge. In fact, instead of the “entity,” every computer in the network confirms the transactions.
How to invest in cryptocurrency (step by step guide)
Cryptocurrency is somewhat exotic since you cannot just go out to a specific place and buy the money. It’s endemic in the world of finances and still relatively unregulated and misunderstood. In fact, most institutions don’t want to deal with cryptocurrencies, so they kind of function within their own networks. Which, as previously stated, certainly has its benefits.
Allocate just a tiny part of your portfolio to cryptocurrencies
Think in advance about how much of your portfolio you will allocate to cryptocurrency. Do not be driven by fear or greed. How much you will put into it is up to you, but we suggest avoiding investing more than ten or even five percent of your portfolio.
Remember, cryptocurrency is not an investment similar to stocks. A cryptocurrency will be an excellent investment only if its price increases significantly and stays at that point for some time. After all, cryptos aren’t designed to be investments but mediums of exchange. Simply put, cryptocurrencies are a more efficient means of commerce and trade, especially on the web. Sovereign currencies are determined by manipulation, which is not the case with cryptocurrencies. Their value is determined by market and market only.
Choose your cryptocurrency
There are hundreds of cryptocurrencies out there, which poses quite a problem for newbies thinking of investing. The fact that more are coming online all the time makes things even more challenging. Right now, Bitcoin is the most potent cryptocurrency there is. Ethereum is second, and others like Zcash, Dash, and Ripple are following.
It is as reliable as Bitcoin is and as wise as it is to put your crypto position mainly in that crypto, and some cryptocurrencies actually perform better. But, be careful. Most of the cryptocurrencies that flashed on the market in the past decade have disappeared.
Choose a platform to buy cryptocurrencies.
Buying cryptocurrencies have one significant disadvantage. You cannot get them in the usual financial destinations, so you will be limited to buying them on dedicated cryptocurrency exchanges.
Store your cryptocurrency (Crypto wallet)
When you buy a cryptocurrency, you store it in the cryptocurrency wallet. As it is with currencies, there are many available. Let’s boil it down to pure and basic facts.
Basically, a cryptocurrency wallet is a software program. It stores private and public keys connecting you to the blockchain where your cryptocurrency exists. Wallets enable you to access your cryptocurrency on the blockchain with both your personal and public keys. To complete the transaction, you need to have both.
Besides enabling sending and receiving your cryptocurrency, your crypto wallet also records transactions stored on the blockchain and your balance. You can choose from several types of cryptocurrency wallets: desktop, online, mobile, and hardware. The best choice for you depends on your security and convenience needs.
Prepare for the wild ride.
If you’re venturing into the cryptocurrency world, expect some ups and downs ahead. Bitcoin had a lot of them over the last decade. You can check out this CoinDesk chart to see the price performance from 2013 to the present day. There were skyrocketing ups but also deep crashing downs a few months later.
This only goes to show that investing in cryptocurrencies goes with instability. Cryptocurrencies are way less predictable than traditional currencies, so you always have to be prepared for some losses. Hence the earlier advice: invest only the amount you’re comfortable with losing.
Why are there so many cryptocurrencies?
Theoretically, every regular Joe out there can make a cryptocurrency. After all, a cryptocurrency is software with no official organization deciding what counts as one and what doesn’t.
This is the reason behind the many “altcoins” existing in the crypto space. Some “small” coins have become major crypto players lately, which only shows how any can become a prominent cryptocurrency. Some of them even have way better solutions to problems significant players such as Bitcoin have. Transactions are much simpler and more efficient. There are also cryptocurrencies created as alternatives, such as a dogecoin which started mainly as a joke.
The reason the crypto market might seem chaotic to many is that they are actually a bet. They are not valued in terms of what you can buy with them, but a stake in a company’s future profits or usefulness of a particular material. Basically, they function mainly as a bet on how interested people are at a given point in time.
The exciting part of cryptocurrencies is that they work as a payment form separate from banks or politicians. This also means proneness to wild swings, without banks or politicians to stifle them. The value fluctuation is often fast and significant, without connecting to significant world events without any warnings.
What is a Compound?
Cryptocurrencies have undoubtedly become a desirable investment for those forward-thinking finance freaks. Many believe that cryptocurrencies could quickly become the future of investing. However, up until recently, investing in cryptocurrencies has been inherently speculative. You could make money by buying assets, holding on to them until their price spiked up, and then selling them. As long as you could take a little bit of risk and gamble, you’d be fine. But, there is a drastically better way to invest in cryptocurrencies nowadays.
The volatility and unpredictability of the cryptocurrency marketplace have been somewhat reduced. Since cryptocurrencies have so much raw potential and are relatively insulated from the stock market fluctuations, many experts say investors should allocate from one to five percent of their portfolios to crypto. Assuming they can take the risk, of course.
The finance innovation that can make you filthy rich is putting your crypto holdings to work to earn compound interest. The compound could significantly increase your Bitcoin, Ethereum, you name it, over time.
For investing newbies out there, compound interest is basically the interest you earned over a specified period added to the principal balance. It’s the way to grow your money exponentially by earning interest on interest, the interest you’ve already earned. Instead of sitting and waiting for the perfect time to sell, your cryptocurrency makes you some more cryptocurrency with compound. Additionally, interest rates can get pretty impressive.
The compound is not new to the world of finance, but it’s somewhat of a novelty in the crypto world.
How can you invest in cryptocurrencies like a pro?
Now that you’ve learned the basics, you can if you wish to trade cryptocurrencies like a pro. Folks who are opting to risk it a little bit understand that digital assets are “the bomb” of today’s financial world. The blockchain revolution is transforming many industrial sectors today, creating overnight crypto millionaires within hours.
But, there are also horror stories about those who lost everything in the crypto market because they made a wrong decision. As it is with many things in life, the factual truth is much more nuanced. Meaning, investing in cryptos is not an ideal way to earn millions, nor is it a scam. Hence, research and understanding are critical if you want to make it in this exciting but killer industry. That’s where a quality crypto trading platform comes very in handy.
Choose the best crypto trading platform.
Investors and speculators are looking closely at the whole craze cryptocurrency has produced. Many see cryptocurrency as an alternative global currency that will replace traditional currencies such as the US dollar and the Euro.
If this whole market lures you into investing, go ahead and dive in. Cryptocurrencies are continuing their march forward, so I bet the following information will help immensely if you’re betting on that outcome.
It’s a very intuitively built and easily manageable platform where traders can execute trades using their proprietary software. With social trading developing so fast, you can trade your cryptocurrencies by copying professional traders. The best thing about Copy Pro Traders is that you can do it automatically. Also, you can choose the Pro Trader that best fits your goals and style.
Copy Pro Traders currently works with Binance.com, HitBTC, Kraken, and add Coinbase Pro, KuCoin, Gemini, and Bittrex. You can set up most exchanges and wallets in minutes. Sign up and join to connect to this real trading platform. It has everything you will ever need in your crypto adventure while allowing you to maintain 1000 percent of the control of your assets. Register now, and feel free to let us know how it’s going for you. Good luck and happy trading!
In case of any questions about the best crypto trading platform, please do not hesitate to contact us.