Bitcoin has exploded out of the shadowy corners of the internet and into mainstream consciousness. Major investment firms, banks, celebrities, and billionaires are all getting in on the cryptocurrency action.
Even Elon Musk of Tesla fame has taken a massive stake in Bitcoin. Many beginners in the cryptocurrency space are asking the question: How do you actually invest in Cryptocurrency and Bitcoin?
If you are thinking all this Cryptocurrency and Bitcoin investing stuff is too complicated think again. Investing in cryptocurrency is not as difficult as you might think.
There are three main points anyone needs to know to begin building their very own cryptocurrency portfolio.
- How to pick which coins to buy,
- where and how to buy cryptocurrency,
- and once you own cryptocurrency, how to safely store your coins.
In this article, I hope to arm you with this knowledge so you can begin your own foray into the cryptocurrency world and stake your claim to Bitcoin profits.
How to Pick Which Cryptocurrency to Buy
The biggest problem beginners investing in cryptocurrency face is choosing which coins to buy.
Take one look over at coinmarketcap.com (a website that lists every cryptocurrency in the entire world and how much they are worth), and you will find an endless list of options.
Everything from Bitcoin, the original tried and tested standard of cryptocurrency, to Dogecoin, a cryptocurrency dedicated to an online joke about a dog that has some serious backing and potential.
With this endless list of possibilities, it can be hard to know where to begin.
The best way to get around this problem is to treat the cryptocurrency markets the same way investors treat the traditional stock markets. That is namely, diversify your portfolio across several coins and put most of your investment in blue-chip coins.
What I mean by blue-chip coins is the ones that have been around for a while and have the most investor backing.
These coins include the likes of Bitcoin, the gold standard of cryptocurrency, Ethereum, the cryptocurrency that powers applications and smart contracts, or Cardano, one of the most secure decentralized networks in existence.
From there you may want to look at the up and comers like Chainlink and Polkadot. These coins enable different Blockchains to talk to each other, and with so many blockchains in existence, this technology is seeing massive amounts of interest.
Only a small portion of your portfolio should be allocated to some of the more obscure coins, maybe even Dogecoin if that’s your thing.
Now that you know which coins to buy, the next hurdle to get over as a beginner Bitcoin investor is where to buy cryptocurrency.
Where to buy Cryptocurrency
If the dizzying amount of cryptocurrencies available on the market seems overwhelming, don’t worry, the number of different ways you can buy cryptocurrency will also make your head spin.
However, choosing where to buy Bitcoin or cryptocurrency can be broken down into three simple categories.
Firstly, if you are a beginner cryptocurrency investor, the best option would be to choose a brokerage site like Coinbase. Buying Bitcoin on Coinbase.com is just like buying anything else on the internet. You simply choose which cryptocurrency you want to buy, how much of it you want, select a payment option, and just like that you have entered the brave world of cryptocurrency investing.
Now, if you want to get a bit savvier with your cryptocurrency investing you could choose a full-featured exchange like Binance. With Binance.com, you place your purchase orders directly onto the exchange. This has the added advantage of cheaper fees, cheaper prices, and Binance also has way more cryptocurrencies available for those of you who have your hearts set on some lesser-known altcoins.
However, if you have more of an adventurous spirit, you could go with a cryptocurrency derivatives exchange. Sites like Bybit.com and FTX.com offer high leveraged trading in cryptocurrency futures. These sites are better suited to traders than investors, but if you are looking to take a short-term position to profit from a rise in Bitcoin these might suit you.
Now that you have a nice little cryptocurrency investment portfolio set up, you will need to decide how to store your coins.
How to Store Your Coins
Cryptocurrency is generally stored in what are known as digital wallets. Unfortunately, if you haven’t already guessed, just like everything else in cryptocurrency, there is almost an infinite amount of wallet types you can choose from.
However, cryptocurrency wallet options can also be broken down into three main types.
As an absolute beginner investing in cryptocurrency, you may choose to leave your coins on the exchange. For instance, coinbase.com accounts have inbuilt wallets where you can leave and access your coins. However, although security at Coinbase is top-notch, sites like these can still be hacked.
For added security, you could choose what are known as hardware wallets like a Trezor or a Ledger. These are USB devices that store the keys to your wallets. They enable you to access your cryptocurrency without sending your precious wallet keys across the internet.
If you don’t want the hassle of carrying around a USB, or you simply want a more practical wallet, you could choose an online wallet. Online wallets like Trustwallet.com or Atomic.io enable you to store and access your coins via a desktop or mobile. Although more practical and easier to use, these wallets are not as secure as the hardware wallets offered by Trezor.io and Ledger.com.
Welcome to the World of Cryptocurrency
Answering the question “how to invest in cryptocurrency as a beginner?” doesn’t have to be difficult.
Starting your Bitcoin journey can be a simple endeavor that will likely lead you down the exciting road of cryptocurrency profits.
Just remember these helpful tips: Diversify your cryptocurrency portfolio maximizing your chances of success, choose an exchange that suits you and your needs, and always keep your coins in a safe and secure wallet.