What is investing in cryptocurrencies?
The idea of investing in cryptocurrencies is exactly the same as it is in case of investing in anything.
You put money into it in hopes that the value of the investment will go up.
So in that sense investing in cryptocurrencies is exactly the same as investing in real estate.
What makes investing in cryptocurrencies different?
But what makes investing in cryptocurrencies different from investing in stocks or real estate is the volatility.
Investments in cryptos involve way more risk.
Of course, at the same time also the reward can be way higher.
Compared to the other investment options absolutely anyone can start investing in cryptocurrencies and you can start with very little amount of money.
You can invest in cryptocurrencies even if you basically don't have any money at all.
If you want to, you can start with as little as few bucks.
How to invest in cryptocurrencies?
In order to start investing on cryptos you need to have a crypto wallet and also join a cryptocurrency exchange.
We recommend mainly three exchanges - Binance, Gate.io, and Kucoin.
But obviously, it really depends what you are looking for exactly and whether your country is accepted by the exchange.
Usually you can keep your cryptocurrencies in the crypto exchange as well, but in general it is recommended that you keep your cryptos that you don't actively trade with in a separate crypto wallet.
After you join the exchange you need to deposit money to your account and you can buy your first cryptocurrency or first cryptocurrencies right away.
Are cryptocurrencies a good investment?
If we look at the historical returns of cryptocurrencies, then overall the answer to that question is definitely yes. Most known cryptos have gone up in value hundreds or thousands of times.
Are cryptocurrencies a safe investment?
No. Cryptocurrencies are extremely volatile and anything can happen.
So we recommend you invest only money you can afford to lose.
Is Investing in Cryptocurrencies legal?
That depends a lot on the country, but in general cryptocurrencies are being legislated around the globe.
Things to consider before investing in cryptos
- Do your homework
- Before investing, make sure you're not putting money into dead coins
- Invest only money you can afford to lose
- Be prepared for long-term investment
- Decide how much risk you're willing to take. While investing in cryptocurrencies is risky one way or another, investing in new cryptos can be even riskier. This means that while new cryptos might have more potential, older cryptos like Bitcoin (BTC) are safer.
Investing in cryptocurrencies - it's a long-term game
Crypto prices are very volatile and prices can easily change 10-100% in a matter of hours or days. But this also means that the prices can go down as much, not just up.
If you're unlucky and invest in cryptocurrencies at the wrong time, you must be prepared to keep them for years in hopes the market will turn and start giving you profit eventually.
Should you really invest in cryptocurrencies?
Our answer to that would obviously be yes. But you do need to keep in mind the things we already mentioned:
- Invest only money you can afford to lose
- Be prepared for a long-term investment
If you can't do these two things, you shouldn't invest in cryptocurrencies.
Otherwise, why not.
I became interested in cryptocurrencies only a bit more than two years ago. Since then I have been in investing in cryptos using different exchanges. And I also launched Cryptolorium.com when I started trading, just to share my crypto journey and my results.