Cryptocurrency is one of the hottest assets to add to your portfolio these days. There are thousands of digital coins available for investors. If you’ve decided to buy crypto, you’ll need to become familiarized with the blockchain ecosystem and all that it entails. It can also take many forms, from direct purchases to investing in cyber money funds and companies that utilize crypto. You’ll also have to pay attention to any transaction fees, as they can vary quite a lot depending on the digital money you’re investing into. You should also get accustomed to the risk. If you’re not at all comfortable with fluctuations in value, becoming a crypto investor is going to be tough. As a general rule, you shouldn’t invest more than you can afford to lose. That’s the first mark of a responsible investor who plans to do it for the long-term.
But why exactly should you be trading in crypto? If it’s all about the fact that it’s popular right now to do so, it can provide little incentive if you don’t give much thought to trends. However, this isn’t the only reason why crypto is a solid investment you should consider adding to your portfolio. Here are some of the main reasons you need to get on board as soon as possible.
Innovative technology
Although blockchain technology has existed since the 90s, it is only recently that it has become popular. The reason is no other than cryptocurrency. Now, researchers and experts estimate that this decentralized ledger is going to replace traditional technologies sooner rather than later. Their main advantage lies in the fact that nobody is in charge of anyone else’s information. Removing intermediaries and third-party entities from the equation opens the door for the possibility of new types of economic activity and transactions that were not possible so far.
Postulated to be a complete game changer for everything from supply chains to healthcare, when you invest in crypto you also get to be at the forefront of this incredibly promising technology. A few years from now, when crypto might as well be used with the same frequency as fiat money, and the blockchain network becomes common across numerous platforms, you’ll be proud to feel you’ve contributed to its improvement and public acceptance.
Great variety
Crypto is still a growing niche of the trading sector, and as such there’s a lot of variety when it comes to currencies. This is good news for any trader, as it means you won’t be forced to choose between a limited number and settle for something that sounds less than ideal. However, you also need to be careful about where you choose to put your money.
Any seasoned trader would advise you to opt for a cryptocurrency that’s well-established on the market. One of the best options is none other than Ethereum. Currently one of the largest names in the digital coin world, it has become increasingly popular among investors due to its stability compared to its peers. Nevertheless, it’s always a good idea to search for the ETH price before you begin an undertaking. Knowing exactly where Ethereum stands at a given time helps you make more informed trades. If you don’t get the hang of the fluctuations, you’re more likely to commit mistakes, such as buying high and selling low. While you cannot realistically expect smooth sailing throughout the entirety of your investing career, one too many poorly-timed decisions will weigh you down in the long run. If you’re just beginning your trading career, it might even be enough to deter you from continuing.
Store of value potential
According to skeptics, crypto will never reach the heights and recognition of more traditional forms of trading due to its infamous volatility. For this reason, they are certain that any trade in digital money is bound to be more of a loss rather than a gain of any type. However, this is a rather reductive view. You don’t have to look any further than the progress cryptocurrencies have made since their introduction only a little over a decade now. From the relative obscurity of its incipient years, cyber money has been propelled into wider recognition into an unbelievably short amount of time. The trend also seems to point towards continuous growth, so cryptocurrency is not going anywhere.
One of the other reasons why crypto is often derided as nothing more than a fad is the craze that has surrounded it over the past years. However, digital money is not the only asset subjected to speculative mania. Precious metals, technology stocks and even real estate have also experienced market bubbles during times of heightened interest. Some of it is ill-advised exuberance, some of it is well-timed trading in a market that is facing a very favorable period, but the fact is that many of these ventures, which rarely get the same negative rep as crypto, ended poorly for investors.
As a beginner in crypto trading, you should be wary of falling for psychological trades such as FOMO or herd instinct. They can often make all the difference between a good and a bad undertaking. So if you feel like you shouldn’t begin a trade at a certain time, trust your gut feeling and don’t. Even if it turns out to have been a missed opportunity, you can at least feel content that it’s a decision you’ve made based on your own gut feeling and not due to external pressure.
Starting a trade
When you’re looking to commence your career as a crypto investor, you’ll have to find a trustworthy exchange and create an account. After you’ve been verified, you can begin your financial transactions. You’ll also have to find a wallet that works for you. While storing your coins on the blockchain is a viable option, you should avoid it since it is most likely not going to also be the safest of the bunch. Software wallets are also only a good alternative if you don’t plan on getting too serious about digital money. Their internet connectivity makes them vulnerable, and once your crypto is lost, it is typically lost forever. Hardware is the safest, sturdiest option.
Crypto is currently getting a lot of time in the limelight. If you’re still on the fence about whether you should become a trader or not, this may just be the sign you need to take the first step.
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December 07, 2022 at 09:00PM
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Adding crypto to your portfolio: why and how to do it - Sierra Sun
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