Nobody is new to cryptocurrency because of its rising popularity. Bitcoin, Ethereum, and dogecoin have become a fixture in the news and social media is abuzz with investment and stock advice. Cryptocurrency is fascinating and pushes people to learn more about it – including the pros and cons.
First, let’s talk about cryptocurrency. What is cryptocurrency and how can you invest in it?
Cryptocurrency is a digital currency that doesn’t rely on banks for transactions. Anyone in the world can send and receive payments from anyone and make transactions anonymously. This currency doesn’t have a physical form.
How does cryptocurrency work?
Cryptocurrency was invented to allow online payments to be made between two parties without a need for a bank. It appears on blockchain – a transparent distributed database or ledger shared among all users in a permanent and reliable way.
Investing in Cryptocurrency – the new trend
The first step of investing in cryptocurrency is deciding on a platform. There are two platforms:
- Cryptocurrency exchanges
- Traditional brokers
Cryptocurrency exchanges are used widely because of the features it allows to the users. That feature takes a fee from the users (different cryptocurrency exchanges take an additional fee).
Traditional brokers charge a lower fee and offer fewer features than having a cryptocurrency exchange wallet.
Where and how should you invest in cryptocurrencies?
You can choose any platform according to your demands before funding your account to start trading. You can deposit money to your bank’s crypto wallet or wire transactions. Debit and credit cards also sometimes offer this feature, but most don’t.
Moreover, credit card purchases are considered risky because some exchanges do not support them. There is one more thing to keep in mind for the second step: a trading fee, deposit fee, and withdrawal fee. Different crypto exchanges charge a separate fee and offer additional features.
The final step for cryptocurrency investment is placing an order. There are many cryptocurrencies, some well-known, others not much. Take your time researching before figuring out which cryptocurrency is best for investment.
Placing your order for cryptocurrency investment
When done with all your research, it’s time to place the order. If you are using a traditional broker, you will have to tell them what cryptocurrency you want to buy or invest in. And when using crypto exchanges, mobile or web applications, you can simply select the cryptocurrency you want to buy and confirm the order.
Lastly, don’t forget cryptocurrency is a high-risk and a high-reward investment because it is considered a very volatile currency. However, there is a whole market full of people in it who take a long-term and steady perspective because it’s easy to make the mistake buying and selling mistakes. The solution is simple: don’t buy when the price is rising in a fear of missing out and don’t sell out when prices go down.