step cryptocurrency investment

Steps to Become a Cryptocurrency Investor

One of the wisest decisions to take in money and wealth management is making a good investment. While true is the fact that investing is a good way for effectively managing wealth, truer is the fact that every prospective investor in cryptocurrency or money generally needs to understand the best possible way to invest; one of which is digital currency or cryptocurrency. This is because investment is usually not centered on money, it can also be committed via time, effort and other forms of resources, material or otherwise.

In order to drive home the point of investment, which is the focal point of this piece, the concept of Cryptocurrency will be discussed. The types of cryptocurrencies will also be examined and the necessary information required by potential investors for a successful investment in Cryptocurrency will be enumerated.

Gain some in-depth knowledge of cryptocurrency

Cryptocurrency can be likened to the performance order of students in a class, while there will be the first, there will also be the second. The pioneer cryptocurrency Bitcoin was invented close to a decade ago to distort the established order in which virtual users made online payments. Prior to the emergence of Bitcoin, some of the popular ways of payment online were Western Union, MoneyGram, PayPal and International bank transfers. However, the introduction of Bitcoin sent a shocking wave across the financial industry, as some of the ideals it introduced into the system included lower transaction fees for virtual users as well as faster rates of transaction process which is usually half an hour.

The bitcoin has continued to grow by leaps and bounds as it remains the cryptocurrency to beat by its competitors. To further stamp its feet as the leader of the market, Bitcoins’ worth is in excess of about $30billon. While on the other hand, the second type of Cryptocurrency is widely known as Altcoins or “Alternative coins”; it should be said that the most popular among the Altcoins are Litecoins. The primary function for the creation of Altcoins in 2011 was to create a divergent or alternative order to whatever the Bitcoins achieves, however in doing this, Altcoins still deploys Bitcoins’ mode of operation which is the Blockchain technology, a form of public ledger of transactions. The inclusion of the blocks to the chain, usually in a linear pattern with the support of cryptography and time consciousness helps to increase the growth of the Cryptocurrency.

Understand the types of cryptocurrencies

Cryptocurrencies are digital currency unlike the regular type of legal tender authorized by the government authorities of nations and financial institutions which is evident via a physical manifestation in banknotes and coins. Instead, cryptocurrencies are mainly evident based on the value accrued from the demands and supplies from virtual users.

After the invention of Bitcoin in 2009, there’s been an influx of about 500 types of Cryptocurrencies which can rightly be referred to as Altcoins. Some of them include Ripple, Myriad, NXT, Vericoin, Peercoin to mention but a few. The continuous success of cryptocurrencies is a pointer to its wide acceptance in many parts of the world as a legal form of storing value. One might be tempted to ask, how can cryptocurrency be gotten? The answer is; they are mostly bought and traded on the exchange market. Exchanges are defined as places where you can buy and sell your crypto, using the fiat currency. There are quite a number of measures to ascertain the value of cryptocurrency. They include trading volume, spread, security, insurance, fees, user-friendliness, purchase and withdrawal limits.

Draft an investment plan

This is the pre-beginning stage for a prospective investor in cryptocurrency because it’s during this stage, you make the strategy on the amount and form of investment you are gunning for in the cryptocurrency market. Will you be investing in Bitcoin, Altcoins, or Ethereum? what percentage of investment will you commit when you make a decision? These are some of the many necessary decisions required of an investor, to enjoy profits from the investment venture consequently.

There are two basic types of investments; they are the short term and long-term investment opportunities. In the short-term investments, if your investment falls into the peak or boom period, you can decide to withdraw your gains within a short frame of time, which is within days, weeks, or even months mainly dependent on time plan of your investment. The long-term, on the other hand, is quite profitable in terms of value, from the findings you make. If the time for your investment to yield profit returns is quite explicit, you can settle for it and be amongst the first set of investors to gain profit.

Keeping abreast of Information for investment opportunities

It’s important for every potential investor in Cryptocurrency to be an ardent gatherer of information, as well as a follower of trends and happenings in the industry. It is also importable to be a crypto newsreader so as to form a personal opinion on the best way to invest in Cryptocurrency and also the most accurate source of information for investment opportunities. In order to achieve this, some of the informative platforms on Cryptocurrency are coin market cap which is for the tabulation of various coins’ market cap and price. The respective coins’ subreddits exists for the available news and market ideas while some websites share the prices of popular coins across different exchange market.

Know the right time to investment

In cryptocurrency, there is really no best time for potential investors to invest. The decision of when the time is rife is relative but it should be based on a well carved out plan of the investor, after conducting the necessary research, understanding how the cryptocurrency market operates is non-negotiable in order to make the right investment. There’s no gainsaying that the decision to invest involves a great chunk of risk which the investor off-course has no direct control of. Hence, it’s important to create a backup plan peradventure the investment goes wrong, this allows you have something to fall back on.