What You Should Know About Cryptocurrency Before Investing
For a few months, I got curious about the whole thing that Cryptocurrency is about, and as I researched through the internet, reading and understanding, I felt that I should be sharing my findings with crypto enthusiasts like you. Hope it helps.
Digital currencies may sound quite exciting investment scope, but first-time investors often risk losing money if they are deceived by fraudsters or buy a cryptocurrency with no history.
Many individual and institutional investors have swiftly included digital currencies in their portfolios. On the other hand, analysts have continued to warn investors about digital currencies’ volatile and unpredictable aspects.
If you’ve decided to invest in the cryptocurrency market, you should conduct research like any other investment. This article can help you start with the pursuit. Before we go into details, let’s see what stats and predictions say.
Fascinating statistics and predictions
Cryptocurrency statistics and predictions are fascinating. Take a look:
As of February 21st, 2021, Bitcoin had a market valuation of $1072.21 billion.
By 2023, the worldwide blockchain market will be worth $23.3 billion.
Bitcoin has grown 193,639.36 percent between 2012 and 2020.
By 2026, the cryptocurrency market will be worth $1087.7 million.
The consumer index for 2021 reveals that cryptocurrencies have a 97 percent confidence rating.
From 2021 to 2030, the global cryptocurrency industry will grow at a CAGR of 12.8 percent, reaching $4.94 billion.
Find your why!
Before investing in cryptocurrencies, the most important question is why you’re doing it when there are alternative investment options available, many of which promises more stability and lower risk than virtual currencies.
Are you interested in cryptocurrencies merely because it is popular?
Or is there a better argument for investing in one or more particular digital tokens?
Or do you want to explore the virtual currency space?
Different stakeholders may have different financial objectives, and you must know what makes you excited about the whole idea of investing in this market.
What exactly is Cryptocurrency?
Cryptocurrency is digital or electronic money protected by cryptography, making fraudulence and double-dealing practically impossible. Many cryptocurrencies use blockchain technology, a blockchain platform administered by a global internet.
Cryptocurrencies are different entity and they are not issued by any centralized government, making them potentially immune to government intervention or control.
5 things to know about Cryptocurrencies before investing
- Do some industry research
Before investing, it’s critical for investors, especially those unfamiliar with digital currencies, to know how the industry operates. Spend some time learning about the many currencies available.
With hundreds of different currencies and tokens to choose from, it’s important to go beyond the popular names, such as Bitcoin, Ripple and Ether.
Learn blockchain technology to understand how the bitcoin industry works. If you don’t have a computer science or coding expertise, understanding some parts of blockchain technology will be difficult. There are various beginner guides about blockchain technology available.
On deciding upon which Cryptocurrency to invest in, research how these currencies use blockchain technology and if they provide unique features that make them better than market competitions. When you understand cryptocurrencies and blockchain technology, you can take informed decisions.
2. It’s all about timing
Virtual currencies are extremely volatile, with cryptocurrencies like Ethereum and Bitcoin bouncing drastically and without warning.
Cryptocurrency investors strive to “buy the dip” or buy more altcoins when their price decreases.
Unlike traditional stock markets, crypto exchanges are open 24 hours a day every year. This implies you may “buy the dip” or “sell the dip” whenever you want on controlled or decentralized crypto exchanges (DEXes).
3. Join an online community of crypto enthusiasts
Things change and develop rapidly in the digital currency industry since it is such a trendy topic.
Part of this is that a large and active network of digital currency investors and enthusiasts communicates constantly.
Join an online group to stay updated on the latest bitcoin news. For digital currency lovers, Reddit has become a crucial hub. There is also a bevvy of other online groups with ongoing conversations.
4. Be cautious of scammers
You may notice social media buzz about an investing technique that promises huge profits from unclear/uncertain crypto assets. Others make exaggerated forecasts about how Bitcoin’s price will climb.
Unfortunately, some corrupt people in the virtual currency sector and schemes like Ponzi and exit scams have cost billions of dollars. Keep an eye on internet guides that educate people and help prevents crypto scams, and keep your crypto safe.
5. Read cryptocurrency white papers
Instead of word of mouth, the specifics of digital money are more significant. Invest your time in finding the project’s white paper while investing. Every cryptocurrency project should get one, and it should be easy to find (if the information isn’t available easily, that’s a red sign).
Study the white paper; this should include the intentions behind the project, including a timeline, a basic summary, and specifics. If a whitepaper doesn’t have adequate statistics and precise facts about the project, consider that a negative sign. If the whitepaper is incomplete or lacks any important information, there must be a big flaw with the entire project.
Do not fall into the trap of FOMO
Prominent cryptocurrencies’ prices may rise dramatically and fast in a speculative bubble. Act caution: purchasing Bitcoin at high prices might result in significant losses if the economy recovers.
How can I learn more about Cryptocurrency?
Join an online community of cryptocurrency enthusiasts and investors, such as Reddit, to discover what the community is talking about and learn more about cryptocurrencies. Read the white paper for more information about the cryptocurrency project you’re considering.
Over to you
When you are reading here, chances are that you must have decided to invest in digital currencies. Analysts continue to warn investors about cryptocurrency volatility and unpredictability.
Do your homework if you’ve decided to invest in the cryptocurrency market.
Since each person’s circumstance is different, seek advice from an expert before making financial decisions.
Investing in cryptocurrencies and initial coin offerings (ICOs) is very dangerous and unpredictable, and through this article, I’m not recommending any investment.
Hope you can make the right decision. Explore the internet wisely and let me know more about your findings.