How To Invest In Cryptocurrency
While past performance is no indication of what’s to come, the crypto market is definitely full of attractive investment opportunities. It is not yet too late to jump on the bandwagon, as many innovations exist. However, it is advisable to be vigilant and well-informed before investing as this asset class is volatile. Overview to invest well in a cryptocurrency without leaving his woolly bottom there.
Should I invest in cryptocurrencies?
There is actually no “best time” to invest in a cryptocurrency. Cryptocurrencies such as Bitcoin or Ethereum are extremely volatile, so it is very complicated to determine whether a particular time is the most advantageous time to invest in cryptocurrencies. These digital currencies can indeed fluctuate by huge amounts in just a few days.
Our 3 good reasons to invest in cryptocurrencies
Deciding to invest in cryptocurrencies such as Bitcoin has several advantages such as:
- The potential performance of these cryptocurrencies is very high compared to “traditional” stock prices. Cryptocurrencies are indeed capable of generating quite incredible returns. However, it is important to keep in mind the very volatile aspect of these currencies that generate significant variations in a very short period of time.
- Cryptocurrencies are the future of global finance. These currencies will play a major role in the economy of the future.
- Cryptocurrencies are a new asset class that allows you to diversify your investments if you have already put your money in more traditional assets.
Best way to invest in cryptocurrency
Precautions
It is very important to come back to one of the key points of investing in cryptocurrency: risk appetite. Crypto assets such as Bitcoin, Basic Attention Token, or even Nexo all carry the risk of loss. Therefore, be ready to risk losing all your money in the worst-case scenario! It is strongly advised to learn in detail about how the cryptocurrency financial markets work, the related decentralized applications, or even each of the crypto assets you wish to acquire.
Joining a social community ( such as Reddit or Telegram) is another opportunity to interact with other investors to understand better what is important in investing in cryptocurrency and how to make the most of it. Investing in a cryptocurrency will then be easier if one goes to forums and get a better insight into the opinions of investors in 2018, 2019, and 2020.
The strategy of conservation
When it comes to investing in crypto assets, there are two strategies favored by specialists. The first is to buy Bitcoins or any other cryptocurrency and store them in a virtual safe (it is not advisable to let your crypto assets sleep on an account created on a platform, they will always be safer on a hardware wallet). This is called the hold. It will be up to you to decide when you will sell all, or part, of your assets in order to make a profit. The goal will be to set targets in advance, such as not selling a crypto asset below a certain amount.
Trading
If you’re familiar with how the stock market works, there will be no secrets for you here. Regular buying and selling of crypto assets are reserved for investors who know the system and the financial markets inside out. The goal? Over a short period of time, to buy assets when their value is at the bottom of a curve (which undergoes a decline) and resell them when their value climbs. To keep abreast of changes in the value of crypto assets on the market, investor traders have several tools at their disposal:
- Real-time charts and data are available on many websites,
- The news: many events can disrupt the evolution of the value of a cryptocurrency (epidemic, war, etc.).
- The nature of the cryptocurrency itself: whether it is rare or common, innovative or secure, the crypto asset you wish to acquire must stand out from its competition to be profitable in the long run.
Best cryptocurrency to invest in
If you have a moderate risk tolerance, then you can choose to invest 50% of your capital in stablecoins and the remaining 50% in promising cryptocurrencies by adopting a “buy and hold” strategy. At this point, you may be wondering how to find these so-called “promising” cryptocurrencies. That’s what we’ll explain in the rest of this article.
How to find the most promising cryptocurrencies?
There is no secret to finding the most promising cryptocurrencies: you need to do your own research. To do this, we recommend that you visit Binance Research. This site provides you with excellent analysis and comprehensive reports on promising projects. You can go there by clicking here.
However, we can give you some food for thought. Indeed, there are some important criteria to consider when looking for a promising cryptocurrency. In his famous book on investing, Margin of safety (1991), the American billionaire investor Seth Klarman explains that “in the short term, supply and demand are enough to determine market prices.” If we apply this rule to crypto-currencies, then the most promising crypto-currencies are the ones that will be the most in-demand tomorrow.
It is then appropriate to ask ourselves the demand criteria for a cryptocurrency. To do this, it is necessary to ask what the function of the token (token in French) will be and how it will be used. For this purpose, it may be relevant to focus on “utility tokens.” If a token is useful, there is a greater chance that its demand will increase.
Is Ether the best crypto to invest in as of 2022?
One of the most well-known projects in the crypto-sphere is the Ethereum project. Ethereum is the first software platform to enable the development of decentralized applications. Decentralized applications are the foundation of Web 3.0. Unlike the second generation of the internet, where data is mainly stored on centralized servers, Web 3.0 is based on decentralization. This decentralization allows individuals to exchange information and value without any intermediary. It is therefore likely that this disruptive innovation will be adopted en masse.
To deploy applications on the Ethereum network, it is necessary to use Ether (ETH), the platform’s native cryptocurrency. Indeed, the costs of the Ethereum network can only be paid with this token. Therefore, it is possible to say that the more people use this network, the more the demand for its token increases. And, of course, the more the demand increases, the more the price of Ether increases. Thus, the return on investment for this asset is directly related to the use of the underlying technology. Given the possibilities offered by this network, we can therefore expect to see the price of Ether increase in the future.
Best penny cryptocurrency to invest in 2022
Every investor dreams of finding the gem. However, finding cryptocurrencies that will experience an exponential rise in their price like Bitcoin or Ethereum a few years ago has become quite complex. However, it must be recognized that some blockchain projects are managing to pull their weight by innovating in the ability to accelerate an exchange network, by reducing transaction costs, or by allowing blockchains to operate between them. This article presents the 3 cryptos that are collecting the most investments in 2022.
Bitcoin (BTC)
The world’s hottest cryptocurrency, this is the most popular cryptocurrency globally. Bitcoin is a peer-to-peer and decentralized electronic currency. This means that all transactions are made instantly, without intermediaries, between two members of the Bitcoin network. It was developed as a cryptocurrency to allow for online payments with no financial institution involved.
Binance Coin (BNB)
Binance is the most widely used crypto trading and exchange platform globally. After launching a whole ecosystem of features for its users, Binance has also created its own token: the Binance Coin (BNB). This currency is now an integral part of the platform’s features. Changpeng
