Whether you are looking to buy cryptocurrency as an investment or as a trading unit, we will tell you which currency will work best for you. So, without further ado, let’s learn about:
- Which cryptocurrency to buy and how?
- How to invest in cryptocurrency and is this even a good idea?
- Where to store your cryptocurrency?
- Can cryptocurrency investments make you rich faster or is that just a myth?
Why Buy Cryptocurrency?
Many people who are buying cryptocurrency today are just following the fad. This is a wrong approach if you would like to invest in cryptocurrency for the long term. You need to know the market and its dynamics. It is even better if you understand how volatile cryptocurrency is and why it is currently on the rise.
Let’s get started with the basics. Cryptocurrencies are in hundreds. The top five cryptocurrencies include Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and XRP. All these cryptocurrencies are either backed by investment banks, governments, or multinational corporations, or they have the biggest market share.
For example, Bitcoin has the biggest market share in the whole cryptocurrency market and that makes it most in-demand.
When investing in cryptocurrency remember that the currency is too volatile. It reached $20,000 for a single Bitcoin in 2018 and then fell to $6000 for a Bitcoin in 2019. That makes it one of the least stable currencies to invest for the short term. However, if you are in for long-term then investing in cryptocurrency would be a good idea.
Even then, it would be better to start small. You can start for as low as $100 to invest in cryptocurrencies. However, you should invest at least $1,000. Break the $1,000 amount into different cryptocurrencies and see which one is rising, then swap the one that isn’t rising for the successful one.
The best way to understand the market dynamics is by studying the cryptocurrency charts. You need a platform that offers the latest news, future prospects, and historical charts of each cryptocurrency.
Once you have decided on a cryptocurrency, you can either buy it from a cryptocurrency exchange or you can buy it from a cryptocurrency broker like Local Bitcoin website. There are many options available to you.
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Wallets for Cryptocurrency
Now that you are aware of cryptocurrencies and how you can profit from them. Let’s learn about cryptocurrency wallets. When you purchase cryptocurrency, you need to store it in a wallet. This wallet is a digital locket where you keep the cryptocurrency stored.
It has a public and a private key that you can use transact cryptocurrency again. So, let’s suppose you get 1 Bitcoin by successfully completing a job. Where will you place this 1 Bitcoin?
If it was sent to you by a client, then they will provide you a basic wallet id including the public and private key. The wallet will be placed on a crypto exchange website. Let’s learn more about wallets.
Which Cryptocurrency to Buy?
Now that you know about various crypto wallets and where to keep your cryptocurrency, let’s learn which cryptocurrency is the best option for you.
Search for a Stable Cryptocurrency
You can search for a stable cryptocurrency by looking at the historical data. Almost all cryptocurrencies have historical data available for the past five years. So, take a look at it and see the crest and troughs.
Also, note why seasonal spikes occur and are they related to a world event. Let’s say the current crypto spike is because of COVID crises and oil deflation.
- Cryptocurrency with the biggest market share
Next, find out which cryptocurrency has the biggest market share. Most cryptocurrencies don’t have a lot of market cap and therefore investing in them would not be a good idea.
When you are able to see the number of coins in circulation, you’ll be able to get a pretty good idea of how stable a currency actually is.
- Cryptocurrency in circulation
If more than 80 percent of a cryptocurrency is in circulation then it is a trusted currency. This means not a selected few people are hoarding most of the money. When the currency is in circulation, there is more chance that its price will increase.
Before buying, find out what crypto experts are saying about the currency? Are they optimistic that the currency will rise in the future? Let’s take the example of Bitcoins again.
As you can see that BTCs just reached half-life, this means its value will now increase because fewer Bitcoins can be mined now for the same effort.
Where to Buy Cryptocurrency?
Here are a few places where you can buy any cryptocurrency easily.
Crypto Trading firms
You can use FIAT currency to buy cryptocurrency. The fees for buying cryptocurrency with FIAT currency are around 5%.
Crypto Brokers/ Crypto Exchanges
Crypto exchange companies similarly allow users to buy cryptocurrency directly from their platform. Instead of trading the currency, they can keep it safe in their wallet. These crypto exchange companies are also great for all those who are looking for long-term investment options.
Third-Party KYC Companies
KYC firms usually have members holding cryptocurrency, and they hold a commission by brokering deals.
That’s all there is to know about buying cryptocurrency online. If you are still interested in buy cryptocurrency, then don’t forget to check out our reviews of cryptocurrency exchanges.