Did you know that there are more than 12 types of cryptocurrency that are active in the market today?
Cryptocurrency has taken the world by storm, and developers, as well as investors, are taking notice.
Are you considering making a digital currency investment, but you don’t know how to start? After all, we keep hearing about how irregular that market is, so you don’t want to accidentally put your money in the wrong place.
Keep reading to learn how to invest in digital currency like a pro.
Cryptocurrency Isn’t Your Average Stock
Did you know that cryptocurrency doesn’t pay dividends or interest? In fact, cryptocurrency wasn’t actually designed to be an investment; they are something meant to be exchanged (although they haven’t been able to live up to this role yet).
Because of this, cryptocurrency should only be a small part of your overall investment portfolio. Whether you’re investing in digital currency for the price or for the thrill of it, you need to invest no more than 10% or less in the cryptocurrency you choose.
Not All Cryptocurrency Is Equal
Another thing you have to carefully consider is which type of cryptocurrency you want to choose. The best digital currency to invest in is the one that you’re most comfortable with because the market is extremely volatile. You could end up losing the entire investment or making a fortune like early investors of Bitcoin.
If you’re planning to go all-in with crypto, Bitcoin is still going to be your best bet. Other cryptocurrencies that are more unpredictable should occupy a smaller part of your portfolio. You can check out this article about Bitcoin ATMs and how easy they are to access to make an educated decision.
Figure Out Your Digital Wallet
Anyone that is going to invest in digital currency has to have a digital wallet to keep it in. Otherwise, your cryptocurrency is not going to be accessible. There are a lot of digital wallet options out there today for you to choose from, mainly because of how popular crypto has gotten within the past several years.
The digital wallet is a type of software program that will store private and public keys for you as a connection to the blockchain that holds your cryptocurrency. They don’t actually store your crypto, but they store access to the blockchain that has your public key (your cryptocurrency address for others to see) and private key (only for you).
The wallet you choose will depend on the balance you want between availability and protection.
Keep Your Crypto Secured
If you want to use your cryptocurrency to purchase things or if you have a hot wallet, you need to secure your crypto. It’s a good idea to use a VPN whenever you’re making transactions over the internet using your crypto to secure your connection online.
The last thing that you want is someone to be able to access your crypto because of an error in judgment. If you have a lot of cryptocurrencies, there is even more reason that someone may want to hack into your accounts and take your crypto.
Learning How to Invest in Digital Currency
As you can see, figuring out how to invest in digital currency isn’t terribly difficult, but it does take some know-how. You can’t invest in the first cryptocurrency you come across without doing a little bit of research first. You also need to ensure all of your crypto is backed up in a digital wallet and that you secure any purchases you make going forward.
Did you find this article useful? If so, be sure to take a look at some of our other investor tips on our blog today.