{"id":2464,"date":"2021-07-22T12:42:58","date_gmt":"2021-07-22T11:42:58","guid":{"rendered":"http:\/\/www.englishforums.com\/blog\/?p=2464"},"modified":"2021-07-22T12:42:58","modified_gmt":"2021-07-22T11:42:58","slug":"how-to-start-investing-in-cryptocurrency","status":"publish","type":"post","link":"https:\/\/www.englishforward.com\/blog\/how-to-start-investing-in-cryptocurrency\/","title":{"rendered":"How To Start Investing In Cryptocurrency"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Cryptocurrency investments are currently one of the most lucrative and accessible ventures available. With that said, being successful in cryptocurrency isn\u2019t as simple as one might think. It takes more than just <a href=\"https:\/\/paybis.com\/\" rel=\"dofollow noopener\" target=\"_blank\">buying bitcoin<\/a> and keeping it in a wallet to start making considerable profits in this niche.\u00a0<\/span><br \/>\n<span style=\"font-weight: 400;\">Moreover, the cryptocurrency market is incredibly volatile and risky. Consequently, jumping in feet first will most probably result in losing most of your starting capital. For this reason, we decided to create this article that will set you up with the basics of investing in cryptocurrencies.\u00a0<\/span><br \/>\n<span style=\"font-weight: 400;\">Here, you will learn about the risks involved with cryptocurrency investments and the importance of having an investment strategy. We will also discuss some important prerequisites of Crypto investments such as fundamental and sentiment analysis, portfolio management, and how to choose the right crypto exchange.\u00a0<\/span><br \/>\n<span style=\"font-weight: 400;\">So let\u2019s get started, shall we?\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Main benefits of cryptocurrency investments<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">If you are new to the cryptocurrency market, you might be wondering what the big deal behind these digital assets is. Well, investing in crypto has numerous advantages, including:\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Incredible potential returns<\/b><span style=\"font-weight: 400;\"> &#8211; Cryptocurrencies are high-risk, high-reward assets. This means that even modest investments can bring in crazy profits in short amounts of time.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>24\/7 availability<\/b><span style=\"font-weight: 400;\"> &#8211; the crypto market never sleeps. This means that you can trade crypto at any time in the day and be able to use it as a secondary source of income without it impeding your work schedule.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Global reach <\/b><span style=\"font-weight: 400;\">&#8211; unlike stock markets usually confined to their countries of origin, cryptocurrency markets are borderless. You can purchase Bitcoin or speculate on crypto price, no matter where you are in the world.\u00a0<\/span><\/li>\n<\/ul>\n<h3><span style=\"font-weight: 400;\">Understanding the risks<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">If investing in cryptocurrencies was easy, everyone would be a millionaire by now. The truth is, while crypto can allow investors to access large amounts of wealth, it remains a highly risky venture.\u00a0<\/span><br \/>\n<span style=\"font-weight: 400;\">First, cryptocurrencies are highly volatile, meaning their prices can fluctuate wildly during short time frames. While this can help savvy traders make huge profits, it can also cause less experienced investors to take considerable losses.\u00a0<\/span><br \/>\n<span style=\"font-weight: 400;\">Second, because they are such a novel asset, cryptocurrencies are mostly unregulated. This means that if your country isn\u2019t too fond of them, you might want to refrain from investing large sums of money in such an uncertain asset.\u00a0<\/span><br \/>\n<span style=\"font-weight: 400;\">And finally, you will need to be extra careful when storing cryptocurrencies. Unlike traditional money, where your bank will keep your funds, you are the sole custodian of your crypto. This means that you need to store and keep them safe at all times using <\/span><span style=\"font-weight: 400;\">specialized crypto wallets<\/span><span style=\"font-weight: 400;\">.\u00a0<\/span><br \/>\n<span style=\"font-weight: 400;\">With all that in mind, we can finally begin our guide on how to invest in cryptocurrencies.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Create an investment strategy<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">First and foremost, you will need to set up an investment (or trading) strategy. Drawing out a precise plan will allow you to build emotional intelligence and not trade on a whim. Consequently, it should help you become more consistent in your investments and grow your profits over time.\u00a0<\/span><br \/>\n<span style=\"font-weight: 400;\">Here are some tips on how to set up an investment plan:\u00a0<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Set realistic goals<\/b><span style=\"font-weight: 400;\"> &#8211; first, set yourself some goals that you are trying to reach. For instance, \u201cmake X trades per month\u201d or \u201cincrease capital by 3% each week\u201d. This way, you will be able to keep track of your investment journey and thrive for growth.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Invest only what you are prepared to lose<\/b><span style=\"font-weight: 400;\"> &#8211; because cryptos are so volatile, you should never invest more than you are willing to lose. Never invest money that you need for your basic needs like food, rent, or mortgages.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Keep a trading\/investment journal<\/b><span style=\"font-weight: 400;\"> &#8211; keeping a journal will allow you to become a more consistent trader. You will be able to learn from past mistakes and double down on working investment strategies.\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>Learn about capital and risk management <\/b><span style=\"font-weight: 400;\">&#8211; understanding exactly how much of your capital you should invest in a particular cryptocurrency is one of the most difficult things to assess when starting out in crypto. You should always keep in mind the potential losses in your investments and try to limit these to a minimum.\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Prepare an exit plan<\/b><span style=\"font-weight: 400;\"> &#8211; the markets work in cycles, and you should have an exit plan for when the crypto market is about to shift into negative momentum. Take profits occasionally as the prices go up and always be ready to sell out losing positions before losses start to pile up.\u00a0<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">Learn fundamental analysis<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Fundamental analysis helps you evaluate the viability of a certain cryptocurrency as a mid or long-term investment. Before investing a large amount of money in a certain coin, you should always do the following:\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Read the whitepaper<\/b><span style=\"font-weight: 400;\"> &#8211; the whitepaper of every cryptocurrency will include every detail about the project, its <\/span><a href=\"https:\/\/decrypt.co\/resources\/tokenomics#:~:text=Tokenomics%20is%20the%20study%20of,positive%20behaviour%20in%20the%20network.&amp;text=Cryptocurrency%20has%20changed%20this.,create%20their%20own%20micro%2Deconomies.\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">tokenomics<\/span><\/a><span style=\"font-weight: 400;\">, the utility of the token, etc. A good whitepaper should be easy to understand and well written. Scammy projects usually will often use incomprehensible terms trying to hide the weak fundamentals of their token.\u00a0\u00a0\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Research the team behind the project<\/b><span style=\"font-weight: 400;\"> &#8211; the success of a crypto project is directly linked to the team that is creating it. As such, you should always do a bit of research about the people involved and if they have previous experience in blockchain projects.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Beware of scams <\/b><span style=\"font-weight: 400;\">&#8211; there are hundreds of new coins being released in the market all the time. Because crypto is such an attractive investment, many scammers try to lure people into investing in their tokens and then conduct a <\/span><a href=\"https:\/\/coinmarketcap.com\/alexandria\/glossary\/rug-pull\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">rug-pull<\/span><\/a><span style=\"font-weight: 400;\"> scheme, leaving investors holding worthless tokens.<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">Assess market sentiment<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Emotion plays a big role in the <\/span><a href=\"https:\/\/paybis.com\/price\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">price of cryptocurrencies<\/span><\/a><span style=\"font-weight: 400;\">. The markets can swing due to the overall sentiment being either good or bad. For example, in a bull market sentiment, FOMO (fear of missing out) will take over, driving prices even higher up.\u00a0<\/span><br \/>\n<span style=\"font-weight: 400;\">On the other hand, if sentiment is bad, FUD (fear, uncertainty, doubt) could take over and drive prices to the ground. This is why you should conduct a thorough sentiment analysis before investing in a certain token or coin.\u00a0<\/span><br \/>\n<span style=\"font-weight: 400;\">To do this, there are numerous free online tools you can use, such as:\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Check the <\/span><a href=\"https:\/\/alternative.me\/crypto\/fear-and-greed-index\/\" target=\"_blank\" rel=\"noopener\"><b>crypto fear and greed index<\/b><\/a><span style=\"font-weight: 400;\">.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Use sentiment analysis tools like <\/span><a href=\"https:\/\/cryptomood.com\/\" target=\"_blank\" rel=\"noopener\"><b>cryptomood<\/b> <\/a><span style=\"font-weight: 400;\">or <\/span><a href=\"https:\/\/lunarcrush.com\/\" target=\"_blank\" rel=\"noopener\"><b>lunarcrush<\/b><\/a><span style=\"font-weight: 400;\">.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Check google trends.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Follow <\/span><a href=\"https:\/\/cryptopanic.com\/\" target=\"_blank\" rel=\"noopener\"><b>cryptopanic<\/b><\/a><span style=\"font-weight: 400;\"> to assess the number of FOMO or FUD news pieces.\u00a0<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">Manage your portfolio carefully.<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">In the cryptocurrency market, Bitcoin is still king. It remains the most valuable and popular cryptocurrency, proving to be a great store of value over the years.\u00a0<\/span><br \/>\n<span style=\"font-weight: 400;\">However, many alternate cryptos (AltCoins) may outperform Bitcoin in the short term. Consequently, beginner traders might be tempted to put all of their capital in these high-risk, high-reward tokens.\u00a0<\/span><br \/>\n<span style=\"font-weight: 400;\">However, to succeed in this market, you will need to choose which tokens to invest in meticulously. Expert crypto investors usually have most of their holding in coins that have proven their value, such as Bitcoin and Ethereum. Only a small portion of their portfolio is dedicated to high-volatility altcoins.\u00a0<\/span><br \/>\n<span style=\"font-weight: 400;\">For example, a good portfolio distribution would be:\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">60% Bitcoin<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">20% Ethereum<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">20% Altcoins<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">Choose your cryptocurrency exchange<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Finally, you will need to choose a reliable trading platform to purchase, trade, and sell your cryptocurrencies. There are two major types to choose from:\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Centralized exchanges (CEX)<\/b><span style=\"font-weight: 400;\"> are run by companies that match the user\u2019s buy and sell orders and take a small fee for their effort. The main advantage is that they offer FIAT to crypto trading pairs. However, the caveat is that they keep custody of your funds until you withdraw them from the exchange. Examples: Binance, Coinbase, Kraken, Huobi.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Decentralized exchanges (DEX)<\/b><span style=\"font-weight: 400;\"> are decentralized platforms where smart contracts execute the buy and sell orders. Consequently, users keep control of their funds, but DEXes don\u2019t offer FIAT trading pairs. Examples: Uniswap, PancakeSwap, 1Inch.\u00a0<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">Concluding thoughts<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Investing in crypto can be exciting, profitable, and risky if you don\u2019t know what you are doing. Hopefully, our article gave you the groundwork on how to start investing in cryptocurrency. Remember, crypto is still young, and as an investor, you are catching the early train. Just tread carefully, and you should slowly start building wealth thanks to these incredible assets.<\/span><br \/>\n<em>Please be advised that the views, thoughts, and opinions expressed in this blog are solely that of the author or his\/her sources and do not necessarily reflect those of English Forward. This includes, but is not limited to, third-party content contained on or accessible through the English Forward websites and web pages or sites displayed as search results or contained within a directory of links on the English Forward network.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Cryptocurrency investments are currently one of the most lucrative and accessible ventures available. With that said, being successful in cryptocurrency isn\u2019t as simple as one &#8230; <a title=\"How To Start Investing In Cryptocurrency\" class=\"read-more\" href=\"https:\/\/www.englishforward.com\/blog\/how-to-start-investing-in-cryptocurrency\/\" aria-label=\"More on How To Start Investing In Cryptocurrency\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":2467,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_generate-full-width-content":"","footnotes":""},"categories":[293],"tags":[],"_links":{"self":[{"href":"https:\/\/www.englishforward.com\/blog\/wp-json\/wp\/v2\/posts\/2464"}],"collection":[{"href":"https:\/\/www.englishforward.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.englishforward.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.englishforward.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.englishforward.com\/blog\/wp-json\/wp\/v2\/comments?post=2464"}],"version-history":[{"count":0,"href":"https:\/\/www.englishforward.com\/blog\/wp-json\/wp\/v2\/posts\/2464\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.englishforward.com\/blog\/wp-json\/wp\/v2\/media\/2467"}],"wp:attachment":[{"href":"https:\/\/www.englishforward.com\/blog\/wp-json\/wp\/v2\/media?parent=2464"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.englishforward.com\/blog\/wp-json\/wp\/v2\/categories?post=2464"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.englishforward.com\/blog\/wp-json\/wp\/v2\/tags?post=2464"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}