How To Choose Cryptocurrencies to Invest
Cryptocurrencies is not an asset that's actually backed by anything its value is created. And that's why I like to say when you're buying and selling cryptocurrencies it's not exactly investing. It's more like gambling it's more like speculating now just because it's not a real investing. Like Warren Buffett would say that doesn't mean that you can't make a lot of money with crypto.
Cryptocurrencies have made so many millionaires but you also have to realize that a lot of people have lost money on crypto as well. so now let's get to why you might want to get into buying and selling cryptocurrencies.
I will say I only suggest buying crypto if you have extra money to risk. you need this extra money because crypto is extremely volatile and if you buy it the wrong time and sell out the wrong time then you can lose a lot of money. therefore it's extremely risky just like the stock market right now it's quite risky it's extremely volatile.
Crypto seems to behave very similarly personally I enjoy carrying crypto in my portfolio because I think it's a really cool technology. And while I don't know if it's ever gonna become a viable currency I do think that it certainly has its merits for. One crypto currency can't be duplicated and this means that you can't counterfeit cryptocurrencies making it a lot safer.
What is Blockchain
Blockchain is a list of all the transactions that happens so that everyone can see it and as a result nothing is private. another cool thing about cryptocurrencies is that there are a finite number of coins. therefore you can't create more technically you can mine cryptocurrencies but this is just like finding a hint stash it already exists but it's not yet being traded.
The gulf of cryptocurrencies is to aim for a decentralized economy. This would mean that we wouldn't need to rely on financial institutions. a lot of people really like that point so that's why there's such crypto fans it's also fully digital so you don't need to hold coins or gold or cash or anything like that it's used worldwide. you can trade 24/7.
And do you think that if the government keeps putting more and more cash and causing more and more inflation then this will definitely push more people towards cryptocurrencies. Because inflation of cryptocurrencies is not really possible like I said there are a finite number of coins and the government cannot simply just make more coins and create more supply .
Three important things you need to know
Before we start learning how to investing Bitcoin I want to share with you three important things you need to know before transforming some of your wealth into digital assets. These types of investments are not like anything else you may be familiar with unlike banks, credit unions, and traditional stock exchanges, there are virtually no fail safes in place to protect you.
You Are On Your Own
If you make a mistake or if you don't understand what you're doing there's no hotline you can call when you get stuck. There's no corporate headquarters you can reach out to if you lose your funds. this means at any time you could lose all of your investments from hackers or user error with no recourse at all. Cutting-edge technology.
Cryptocurrency is cutting-edge technology it's the modern-day Wild West so requires some focused time and energy to wrap your head around. luckily for you I've done a lot of the legwork to compile this step-by-step guide from research keeping up with daily news and experience buying selling transferring and storing cryptocurrency.
I've updated this ultimate guide to ensure you receive the knowledge and understanding you need to be successful in cryptocurrency investments. Never invest more than you can afford to lose.
Never invest more than you can afford to lose
The secondthing you need to know before we go any further is the golden rule of investing never invest more than you can afford to lose. high risk can lead to high reward and as humans we have a natural tendency to want to overreach. You need to figure out an amount you're comfortable with investing.
And more importantly an amount you can truly afford to invest . Then you need to stick with that amount and be patient with the process. Cryptocurrency is a lot more volatile and unpredictable than the stock market unlike the nine-to-five New York Stock Exchange. cryptocurrency is traded 24/7 around the world so if you want any chance of getting a good night's sleep as a crypto investor you need to budget an amount of money.
You're going to invest and stick to it since you're not dealing with any banks and other third party financial institutions. this process is basically helping you set up your own personal bank to manage your own personal funds.
Pay Attention to the URLs
So the third thing you need to know is that it's extremely important to pay attention to the URLs of the websites you're accessing. to ensure you're not visiting a fake one that's pretending to be the real one also always ensure that there is an HTTPS protocol in the URL. not just an HTTP this means that the site has a Secure Sockets Layer or an ssl protecting the information pass through the website by a user always ensured that the actual URL is correct as well.
there are a ton of phishing sites that pretend to be the real site in order to steal your username and password to gain access to your account on the real website. once you are 100% sure you're accessing the right URL bookmark the page and only access the site going forward using that bookmark. that way you never become a victim of a phishing site to make it safer and easier for you I've listed all of the links you'll need in the description area below.
How You Can Actually Buy and Sell Cryptocurrencies
there are tons of different exchanges that you guys can use for example coinbase BitFenix finance and robinhood. now most people are going to go with coin base because this is like the platform that everyone is that all beginners use.
Because it's just the easiest to use coinbase is both a website as well as an app so you can trade cryptocurrencies on your computer as well as trading on your phone. I'd say that about 99 percent of people that get into cryptocurrencies will use calling base at the start and like I mentioned.
to create an account coin base is gonna ask you some personal questions about yourself you'll have to enter in this personal information as well as give them a picture of your ID. you can also use your passport to transfer real money into your account. you'll use a debit card or your bank account and coinbase will simply take the money from that account and put it in this coin based account.
From there on you can use this money to buy cryptocurrencies and guys over 30 million people use coinbase so it's an extremely reliable and trusted service and they haven't had any big hacks so your money is safe with them. the thing I like about coinbase not be interface is extremely easy to use you can buy all the top cryptocurrencies.
How To Choose Crypto
so the next step is what coins did you buy here are the top cryptocurrencies. based on their market capitalization number one is Bitcoin at about 128 billion dollars number twos aetherium nineteen point four billion third is ripple XRP at eight point two two billion dollars. the list goes on but as you can see from this list bitcoin is the king it's market cap is way higher than all the other coins. that's why most people when they think of cryptocurrenciesthey automatically think of Bitcoin. and that's why most people that start off investing in cryptocurrencies will start with Bitcoin as well.
White Paper
if you really want to know all the details about each of these coins you'll have to read it's white paper. the white paper is basically just the PDF guide of the coin project and what the coin is. most people won't read the white papers of any of these coins but if you really want to know the utility of the coin. white paper is the best thing to read, you want to ask yourself is this coin bringing any real value. a ton of these coins solve real world problems for example aetherium took off because it has a lot of real world use and it's more advanced than Bitcoin.
Aetherium is an open source platform for decentralized applications it's a whole network with its own internet browser coding language and payment system. it enables users to create decentralized applications on the theory in blockchain.
My advice is study each coin that you're interested in to see if it's something you want to invest in. you can read the white paper, you can look at tons of articles online about what the value is in this coin and sort of why it was made. Honestly it's really hard to know when to buy these coins you can't really do a fundamental analysis as you can with real-world stocks.
These coins aren't companies with assets with earnings, revenues, financials, all that stuff that you can actually analyze. and in terms of when I buy I basically just looked for big dips since it's not really backed by anything besides the demand and consumersentiment. anytime you buy crypto it's pretty much the gamble prices could recover prices could have again you know anything is really possible when it comes to crypto.
Big Event
well I think people have been saying which is actually good for Bitcoin is the happening that happened in May of 2020. this means that the number of bitcoins that someone gets for mining one block went from 12.5 Bitcoin down to 6.25 Bitcoin. this basically just means that mining Bitcoin got twice as hard the amount of Bitcoin supply is expected to only increase by 2.5 percent in 2020 and this is by far an all-time low.
this means that if demand is steadily increasing but the supply is remaining pretty much unchanged this should lead to higher prices. with the pandemic going on and pretty much all stocks and cryptocurrencies going down priced by a lot. this is made a ton of new investors get into the game and actually start trying to invest where as Bitcoin was worth just under five thousand dollars in March. now it's doubled to about ten thousand dollars per Bitcoin.
because the economy is all sorts of messed up right now we could have a second round of the virus the unemployment numbers are very high and we sort of have a shrinking economy. another thing that's really helping coins such as Bitcoin is the stimulus payments that the government has made.
with this big injection and money a lot of people are scared of the rising inflation that will occur. and as a result lots of people are starting to want to put their money in independent stores of value such as gold and Bitcoin. and let's have wildly different predictions on where the price of Bitcoin will go this year some are saying 20,000 some are saying $100,000 some are saying $5,000 the thing that the stress is you don't want to get into crypto just due to the fear of missing out.
FOMO
if you buy just because of the fear of missing out then you can find yourself in the middle of a crypto bubble. this is what happened at the end of 2017 when the price of Bitcoin went up to about $20,000 I know a lot of people that saw it shoot up in price and they were like shoot I don't want to miss out on this investment opportunity. I don't want to miss out on Bitcoin potentially going to $100,000 or even five hundred thousand dollars as a result lots of people bought at this all-time high of twenty thousand dollars. and when it went down to ten thousand dollars they lost a ton of money.
and the thing with volatile investments such as Bitcoin lots of people just sell at the wrong time they get really scared when the price drops in half and they start selling. a lot of people get their emotions involved and that's just really dangerous for investing in something such as crypto.
Do Your Own Reaserch
makesure to do your own due diligence before investing in anything and especially for crypto. you know it's not really an investment it's more of a gamble more speculation so that's when you really have to know what you're doing and getting yourself into.
Summary
So in conclusion you guys we just went over what crypto currencies are, what are the top coins that you can buy today, how you can buy and sell crypto on exchanges, such as coin base as well as how to analyze a coin to see if it's something that you believe in and want to put your money into. These are all digital assets and they're extremely volatile so you guys I know a lot of you are new investors and I just don't want you to risk too much money that you can't afford to actually risk.
So guys only put money into crypto if you'll have anything else do you want to invest your money in whether that means investing in your own self education or investing in more value driven stocks.
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