Are you looking forward to investing in a new form of asset class? Many investors are investing in cryptocurrency to diversify their investment portfolio, and with free ETH in your wallet, it’s even more of a reason to get into cryptocurrency.
In this article, we will look at cryptocurrency and why there is such ample hype around this asset class. We will also explore the benefits of cryptocurrency investment and how you can get started. Let’s dive into it!
Cryptocurrency: What Is It, Its Benefits, and How to Get Started
Operating independently of a central bank, cryptocurrency is a digital currency that uses a decentralized system. It does not have any government or financial institution influence but relies on a network of computers to verify and record transactions before storing them on a public ledger known as the blockchain.
What Are the Benefits of Cryptocurrency?
The benefits of cryptocurrency investment have been compared to gold because of its fungible and durable growth. It is no hidden fact that crypto, short for cryptocurrency, is in finite supply, eventually leading to more upholding value compared to other assets and currencies.
Cryptocurrencies offer faster transactions (much quicker than traditional banks) and have lower transaction fees. Since their value can increase rapidly compared to other investment assets, these offer higher returns.
Due to the decentralized nature of cryptocurrency, investing in cryptocurrency is secure as all transactions on the blockchain are transparent and tamper-proof. It’s a safe long-term investment with no government involvement, but this should not rule out the risks that come with it.
Despite its emerging trend, you must only invest 1-5% of your yearly income in crypto to avoid the consequences associated with the risks of investing in cryptocurrency.
How to Get Started?
If you’re looking to invest in cryptocurrency, it is essential first to understand the risks. They are highly volatile and fluctuate by huge amounts in a short period, and they can also become illiquid anytime, making them a risky investment for anyone.
There are also regulatory uncertainties, and investors should watch out for scam coins. Now that you’ve understood the risks, let’s go over how to start investing in cryptocurrency.
Cryptocurrency investment has become broadly accessible to society. Start by researching the different cryptocurrency exchanges and creating an account with the one that fits your needs best.
Now you must deposit money into your wallet to start purchasing crypto. Depending on the exchange you’ve joined, there are different modes of payment to deposit payment into your wallet, including wire transfer, credit/debit card, and others.
Now that you have money in your virtual wallet, you should start analyzing coins, their trends, the system behind the cryptocurrency, and other essential indicators before buying a crypto coin.
After determining the crypto you want to invest in, you should set a budget and some limits before investing. Start by investing 1% of your income and slowly move your way up to 5% of your income.
You mustn’t go beyond that, as crypto is incredibly volatile, and you don’t want to lose a good chunk of money if the coin dips.