How to start investing in cryptocurrencies?

Have you already heard a lot about the cryptocurrency market and would like to develop your crypto-wealth yourself? Unfortunately, you are afraid to take the first step in this market unknown to you and wonder how to bite it? What way of investing to choose, but most importantly how to get started investing in cryptocurrencies? Do you play for the long term or maybe operate your capital in a riskier way hoping for big profits? No matter what path you take, you need to be properly prepared for it! Find out how to start investing in cryptocurrencies and not sink your portfolio with a few simple steps!

This is quite different from investing in real estate, gold, or works of art and often requires at least theoretical preparation. But I will already write about it below.

How to start investing in cryptocurrencies – choosing an exchange and a digital wallet

Let’s say you are in possession of 10 thousand zlotys, which you want to allocate to invest in cryptocurrencies. However, you have no idea where to invest, what to invest in and how not to become a victim of a scam through which your money will evaporate. Precisely for this reason, at the very beginning of your adventure with cryptocurrencies, you should familiarize yourself with the available wallets and online exchanges that allow you to trade digital money.

Fortunately, there are plenty to choose from. Despite the huge number of wallets and exchanges available, the most popular ones are a few. Wallets can be divided into online and offline wallets, these are divided into yet other more complicated sub-types, and it’s your job to choose the one that best suits you.

Large selection of wallets

The most popular online wallets are: Coinbase, Blockchain, Electrum, Bitcoin Core and Armory, in turn, the best offline wallets are: Trezor and Ledger. The wallet stores your funds, and only you have access to it. Sending cryptocurrencies is done by showing your private key – a special string of digits. You need to know that the money does not physically appear on the wallet, there is only a numerical record of your funds placed in the so-called: blockchain.

Already know how to start investing in cryptocurrencies and what wallet you should choose? Perfect! It’s time to choose an exchange that will allow you to invest in digital currencies. The most popular platforms are such giants as: Binance, Coinbase, Bitbay or Kraken.. The differences between the two are mainly the value of the commission associated with currency conversion, loans and other transactions in the exchange area.

Which platform?

These are platforms you can trust and have no fear of being scammed or robbed. Registration and login are protected and in order to become a member of any of the listed exchanges, you have to go through a complicated verification process, which includes phone verification and verification of your identity by sending photos of your ID or other document. If the platform does not require you to provide such data, it may be an unworthy site and you should avoid such sites like the plague.

How to start investing in cryptocurrencies – your investment strategy – HODL and BTFD

You have already chosen your portfolio and stock market, thus you are ready for your first investment. You don’t have much knowledge, however, you decide to take a risk. Okay, so let’s take a look at the safest and less secure method of investing.

Investing in the cryptocurrency market itself seems easy, as it is characterized by a strong upward trend and breaks in growth – corrections. It is safe to say that the market is not yet saturated and will not be for a long time, so you can count on profit by adopting a long-term strategy. Therefore, the most popular strategy is HODL.

Long-term investing

Despite the fact that it is a misspelled word, it has become the subject of many memes and has gained a huge number of fans. Where did this interesting term come from? Well, on December 18, 2013, a post entitled I AM HODLING appeared on the bitcointalk.org forum, whose author was an Internet user with the nickname GameKyuubi. In this post he shared his tactics, he said that he prefers to hold (hold) his bitcoins long term because he is a poor player and speculator, he himself wrote “I’m a bad trader”.. GameKyuubi decided to leave its funds and not move them to prevent other investors from getting ripped off.

The title of the entry itself is an obvious typo, but this created a new term that is still used today. Some time after the publication, there was even a hodler manifesto (The HODLer Manifesto), which consisted of eight theses. The hodling strategy is based on a rational approach to investing. Warren Buffet himself once said that he only invests in what he knows, and that his preferred investment time is “eternity.” It was through this tactic that Buffet made his million-dollar fortune. Hodlers, despite the many bumps in Bitcoin’s road, are able to see significant gains after a long period of time thanks to a strategy of holding and not moving their portfolio.

Less popular strategies

You already know how to start investing and what strategy to choose at the beginning, so let’s fly on – the next, already less safe strategy for investing in the cryptocurrency market is the strategy of BTFD, consisting of buying at the lows, at a low rate. In practice, this involves investing in a currency after a speculative bubble, after the so-called pump and dump period, that is, after unnaturally pumped ups and downs.

Using this tactic, however, the investor must have nerves of steel and not succumb to emotions, which can be treacherous and provoke the purchase of currency at an inopportune moment. A true speculator will wait until the “street” sells off his assets and wait for the next bubble to burst. Selling, on the other hand, will plan for the moment of euphoric buying according to the principle of STFR.

How’s that for a Hold strategy

The HODL strategy is much simpler for a novice investor and does not require specialized knowledge. When investing in cryptocurrencies on your own, you should familiarize yourself with such an investor’s tool as technical analysis. This will allow you to read charts on your own, identify trend lines or speculate more precisely on the ups and downs of currencies. You can also take the help of experienced traders and watch their movements on live streams. If you put a lot of trust in them you can even copy their plays.

Keep in mind, however, that by familiarizing yourself with indicators such as RSI, MACD, EMA you will be able to apply the BTFD strategy more effectively. For the time of learning, you are left to invest and hold the funds long-term with the hope of profits in the distant future. If you now know in a nutshell how to start investing in cryptocurrencies, you can go ahead and read the next articles on alternative investments.