I think we can all agree that cryptocurrency has been a hot topic in 2021. Yes, this is mostly for the wrong reasons due to an unexpected crash after Elon Musk announced that Tesla has suspended vehicle purchases using bitcoin. Not only did this affect bitcoin but all the cryptocurrencies came crashing down. But fear not… the crypto market is extremely volatile. There will always be highs and lows. Maybe it’s got some of you thinking to invest during the dip but you don’t know where to start? So, here’s a step by step guide if you’re a beginner…
1. Don’t invest all of your savings into cryptocurrency
This might seem obvious, but you’ll be surprised at the number of people who invest all of their savings into cryptocurrency within minutes. It is actually recommended by finance experts, that you keep your cryptocurrency investments at 5% of your portfolio. This is because (as mentioned above) the crypto market is extremely volatile and risking all of your money has the potential to become very financially damaging. For people investing in 2021, you should learn something from the huge Bitcoin crash. There are huge financial risks involved so never put all of your eggs (cash) into one basket.
2. Choose Your Cryptocurrency
Before choosing which cryptocurrency to invest in, it’s important that you know all of the essential information about it. So it’s time to get researching! There are many factors you should look at before choosing. Such as the community, the team, the fundamental analysis, the technology, their vision, leadership skills, pricing history, reputation and future goals. Don’t just choose the one you like the sound of and hope for the best. It’s a recipe for disaster (and financial losses). Check out our Top Cryptocurrencies to Invest in 2021 page for a list of our recommendations and information on each cryptocurrency.
3. Choose a Reputable Platform to Buy Cryptocurrencies
It’s very important to research each platform before depositing any cash. You need to be 100% sure that the platform is reputable and your money will be safe and secure. It’s always a good idea to read reviews beforehand so you can read real customer experiences. There are many incredible platforms but also a lot of frauds out there too. Beginners are usually the targets so educated yourself and do your research! Here is a list of our recommendations of trustworthy platforms to help you out:
- Coinbase
- Gemini
- BlockFi
- Uphold
- Kraken
- eToro
- Bitcoin IRA
- Crypto.com
- Binance
- Hodlnaut
4. Store Your Cryptocurrency
Depositing cash into whichever platform you’ve decided on and buying crypto is a fairly quick and straightforward process. But choosing which wallet to keep it stored in can be harder. You should find the wallet that is most suitable for you. The two distinctions between wallets are hot or cold. If you choose a hot wallet then it will be connected to the interest and easily accessible. However, if you choose a cold wallet, it will not be connected to the internet and you can access it when offline. The cold wallets are usually the choice for long-term investors that are not going to be checking it each day.