Today’s global health crisis has been nothing short of catastrophic for the global economy—as evident by the falling property markets, and the major issues occurring with the global supply chain right now.
A small silver lining, however, is that this unstable environment has enforced innovative new systems of work. In the financial sector, that means it has pushed cryptocurrency back into the limelight as a viable asset and potential alternative to our current fiat-based economies.
True enough, a report on Yahoo found that even some government entities, such as the US Congress, have genuinely started to consider the introduction of digital currencies.
As such, there’s no better time than now to get familiar with cryptocurrency. So, here are some things every beginner should know before investing.
Direct vs. Indirect
Before you invest your money, you have to consider what kind of crypto investment you want to engage in: direct or indirect. The former is very straightforward. Similar to forex, it’s the buying and selling between different types of coins. On another hand, crypto acts more like a business, with entries in the stock market as well. Stocks are recommended for long-term investors, as the profits aren’t as big.
Choosing your platform
Once you’ve settled on your method of investment, it’s time to choose your platform. In a previous article entitled ‘Buying From Crypto Exchanges’, we discussed how it’s important to run a background check on your potential trading platforms. See if any authority in coin exchanges sponsors them. One of the most reputable regulatory systems in the market is BitLicense, which has only verified 18 companies to date. Other names to look for include ISO, FinCEN, and SEC (for US-based traders). Alternatively, you can also research the platform’s owner/s. Determine if they are reputable investors, as this will certainly add extra credibility.
Finally, consider the fees. How much is the platform’s cut from every exchange you make? You need a broker that takes as little as possible or at the very least offers competitive rates.
Managing your account
Crypto is volatile by nature. You can make profits as easy as you can incur losses. This can be daunting for new crypto investors, especially for those who lack experience when it comes to investing. That being said, companies all around the world are making cryptocurrency more accessible by helping beginners navigate this tricky landscape. Plus500 UK’s intuitive cryptocurrency trading platform is built around making selling just as easy as buying, by allowing users to manage their coins better. Users can also choose to set price alerts to help minimize losses. Similar features from other apps also help in demystifying the entire trading process.
It also helps if you know which coins to buy. For newbies, start with one or two of the four most stable cryptos on the market today: Bitcoin, Ethereum, Ripple, and Litecoin. As an extra tip, these four are good options for long-term investment, as crypto statistics on Forbes show that their overall trend over the past few years have all been upward, despite experiencing a few hiccups. This means that even though the price of Bitcoin may drop tomorrow, the likelihood is it will probably bounce back relatively soon. And there’s always the option to trade them.
Investing in crypto is very similar to investing in other things, like stocks or insurance. You could argue that it’s risky due to its infancy, but all good investments have an element of unpredictability to them. After all, nobody really knows what the market will look like in the future.
Disclaimer. This article is provided by a third-party source and should not be viewed as an endorsement by CoinIdol. Readers should do their own research before investing funds in any company. CoinIdol shall not be responsible or liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any such content, goods or services mentioned in this article.