Since the birth of Bitcoin in 2009, cryptocurrency has been on a roller-coaster journey of popularity and value. People are wary to place trust in a decentralised system, no matter how secure it is. Despite the growing adoption of cryptocurrency by major players, the value of crypto will remain volatile for the foreseeable future. Of all the cryptocurrencies to exist, Bitcoin is the most well-known and successful. In recent years, however, it’s been viewed as a global currency, with ETFs on the New York stock exchange beginning to surface. On the back of commercial and investor success, beginners are looking to invest in cryptocurrency, especially Bitcoin, because they think that its worth is about to skyrocket. With this in mind, we’ve collated the ultimate guide on investing in cryptocurrency. Understanding the ETH price CAD can provide insights for those involved in cryptocurrency trading
What is Cryptocurrency?
For those of you that don’t know already, cryptocurrency is a decentralised digital currency that runs on a blockchain. That is, transactions (blocks) are added to a public ledger before being validated and encrypted. Anyone with a public and private key can access the ledger and view all of the changes made. With all transactions taking place across all devices on a blockchain network, it is practically impossible to break. When you buy cryptocurrency, you will store it in a wallet, which we will discuss later.
Blockchain technology may sound complicated, but it essentially cuts out third parties and allows for direct peer-to-peer transactions. Outside of cryptocurrency, it is being integrated into the world of businesses to streamline processes and strengthen user data security. Without the middle man taking a cut, cryptocurrency has the power to eradicate transactions fees and make certain employment obsolete.
Why Is Cryptocurrency Appealing?
Cryptocurrency is appealing for many reasons, but there are two major attractions. Firstly, you can use it anonymously. Although this is a primary attraction, it’s also the cause of association with criminal activity. The second attraction to cryptocurrency is its habit of value explosions. The most significant price eruptions were in 2017 and 2021. If you invested in cryptocurrency before then, it’s likely to be one of your most valuable assets.
Before cryptocurrency becomes commonplace, there are several hurdles to overcome. However, the playing field is heading in the right direction, with many experts suggesting that the value will continue to rise.
How to Invest in Cryptocurrency
If you’ve chosen to invest in cryptocurrency, welcome to the chat. As the most popular and tracked cryptocurrency is Bitcoin, we will refer to it throughout this guide. When buying Bitcoin, you can’t just head to your local bank and invest. Crypto is still relatively misunderstood, which is why many institutions won’t deal with it. Therefore, Bitcoin runs on its network, with many platforms just like MoonPay allowing you to buy, sell, and exchange them. Please read the investment tips below to find out more.
Decide on a Cryptocurrency
There are thousands of cryptocurrencies in existence, all with unique pros and cons. To make the choice even more difficult, cryptocurrencies are being made regularly on the back of the surge in popularity. However, at the moment, the most valuable cryptocurrency is Bitcoin, which makes it a reasonable choice for investors. Coming in second place is Ethereum, which is an interesting blockchain used to create smart contracts, decentralized apps, and NFTs.
Find a Platform
No matter what cryptocurrency you choose, you will need to find a platform to trade through. Again, there are thousands out there, with just as many fake stores trying to steal your crypto. To help you cut through the noise, we give you Paxful. When you sign up, you get access to a free BTC wallet and a marketplace where you can buy crypto from users around the world. If you’re a beginner, head over there now and find out how to buy Bitcoin from peer-to-peer marketplaces. In addition, make sure you do enough research about the 3 main types of crypto exchange platforms; CEX, DEX, and hybrid exchange platforms. Also, take the geographic limitations of the exchange platform and state regulations into account as well. Not to mention, to mitigate potential risks, go with a trading platform that offers high-end security measures and withdrawal options.
Only Invest Small
We’ve already told you that Bitcoin is susceptible to sudden peaks and troughs in value. However, you need to decide how much you are going to invest before you commit. Recently, Bitcoin’s value has peaked, making it appear wise to spend high. You can never rely on Bitcoin to have a high worth. Therefore, you should only ever invest a maximum of 5% of your portfolio. Anything you invest, you need to be willing to lose. Here is where to buy bitcoin.
Safe Storage
Once you’ve made your purchase, you need to store your Bitcoin in a crypto wallet. We could write an entire article on crypto wallets, but let’s keep it short.
Crypto wallets are programs designed to store the private and public keys that allow you access to a blockchain. When you complete a transaction using Bitcoin, you need to have your public key and private key. There are four primary types of crypto wallets including software, cloud, paper, and hardware. Any wallet connected to the internet is called a hot wallet, which you can access at all times. If the keys are stored offline, the wallet is cold. For the best security, you should split your crypto between hot and cold storage.
Tight Security
Blockchain in itself is secure, but it’s still vulnerable to weaknesses at the end-user. Typically, cybercriminals target users in an attempt to steal their keys. Without both keys, your money isn’t yours. Therefore, if you have a hot wallet and access cryptocurrency, use a VPN to keep your online IP secure. You can find more security measures to take here.
Be Ready to Ride the Wave
The cryptocurrency market is a rough wave to ride, with the value of Bitcoin in a constant state of flux. If you invest in cryptocurrency, you need to accept that you may lose all your investment. However, on the flip, some speculate that Bitcoin’s value will only continue to rise in the future. Whichever camp you sit in, you need to be ready to embrace whatever comes your way.
Cryptocurrency is still in its early stages of acceptance. However, it’s beginning to attract more commercial attention, with Bitcoin being the most popular. Along with that, more people are looking to invest. Before you buy, remember to keep your investment small and find a reputable wallet.
