Open An Account On An Exchange
You want a piece of the cryptocurrency pie but your USD and EUR are only good for buying real-world pie. There are only a few mainstream exchanges that give you crypto money for your fiat . The players to know are Binance and Coinbase.
Binance is the best cryptocurrency exchange for investors on the market. The platform serves low fees and is the only exchange youll ever need, from your initial investment to your multi-million dollar-value asset pool.
Binance converts your USD, EUR, GBP, AUD, etc. into BTC. You then have Bitcoin to exchange on the platform for any other cryptocurrencies you want up to 200 of them! But dont diversify too quickly. More on that later.
Binance also offers lower fees than Coinbase and has an enormous range of features that you should explore as you grow your crypto investment knowledge. Binance really is the king exchange!
Unfortunately for my Red, White and Blue folks, government regulations mean Binance isnt available in the U.S. . So whats the best exchange for U.S. users?
Coinbase is the leading exchange in the U.S. for ease-of-use and low fees compared with other U.S. exchanges. Annoyingly though, there are two versions of the platform. Coinbase is the beginner-friendly version with a simple and clear UI and limited options for managing your portfolio. Coinbase Pro is the intermediate-to-advanced version for traders who arent going to lose all their assets by mistyping a decimal on a stop order.
Keep Learning; Slowly Branch Out
Youre already in the game. What youve done so far is enough to see return on your initial investment.
But I believe the future of finance is in cryptocurrency and so I want to take a moment to introduce you to some other cryptocurrencies I believe are worth adding to your portfolio.
Theres loads of opportunity as the market evolves and realizes its potential. Organisations are creating blockchains and digital currencies for every purpose, and these systems are gaining more and more traction online.
But heres where we leave the realm of certainty and begin speculation. I cant predict which of these projects will be relevant in a years time. The market moves dramatically and you need to be up-to-date on the state of crypto at the moment you decide to invest in an altcoin.
If youre in the game now, do your own research. Learn how decentralised finance works and get familiar with the main 20 or so projects.
I cant tell you what to put your money in next month or even next week, but Im keeping my eye on about 15 projects I am particularly excited about.
This is why Ill share with you what Im invested in right now. Big disclaimer: this does not constitute financial advice, youve gotta put in the research on your own to decide the right options for you.
How Can I Buy More Coins
Buying more coins to expand your cryptocurrency portfolio is a smart idea the more you diversify, the better your chance of hitting a coin that goes to the moon. I do however recommend keeping at least 70% of your portfolio in relatively safe coins like Bitcoin, Ethereum, Litecoin and Monero.
Most cryptocurrencies can only be bought on trading exchanges and not on Coinbase and some cryptocurrencies are only available on one or two exchanges.
The majority of cryptocurrencies can only be bought with Ethereum or Bitcoin so you have to buy one of those before you can purchase the smaller coins.
To properly expand your portfolio, you will need to join a trading platform ; is the largest and most trusted trading platform out there and it lists a wide selection of decent coins.
You will need to first buy your Bitcoin ,;you will then send your BTC to a cryptocurrency trading exchange.
Once you have your BTC in place on Binance or another cryptocurrency exchange, you can then expand your portfolio and buy other coins.
You May Like: Do You Report Cryptocurrency On Taxes
How Much Money Should You Invest In Cryptocurrency
There are two fundamental ideologies to investing: active and passive. The former involves paying constant attention to your portfolio and its allocation. The latter, meanwhile, is a mostly hands-off approach.
If youre just starting out with cryptocurrency investing, it is worth pointing out that the market is extremely volatile. Digital currencies routinely gain and lose 10-20% of their value in a single day, whereas the stock market may only move a couple of percentage points over the same time period. Even established cryptocurrencies like Bitcoin exhibit this kind of volatility from time to time. This is why short-term trading is almost always a bad idea for inexperienced investors.
Maintain a longer time horizon, however, and the appeal of cryptocurrency investing suddenly starts to become apparent once again.
As the above tweet indicates, a relatively tiny Bitcoin allocation manages to outperform the S&P 500 index over a four-year investment period. While past performance is not indicative of future gains, the above statistic should influence your investments time horizon. It also explains why some experts are of the opinion that investors should maintain some;exposure to the cryptocurrency market even if its only limited to 1% for now.
Here’s How Much Suze Orman Thinks You Should Invest In Cryptocurrency
by Christy Bieber | Published on Aug. 7, 2021
Many or all of the products here are from our partners. We may earn a commission from offers on this page. Its how we make money. But our editorial integrity ensures our experts opinions arent influenced by compensation. Terms may apply to offers listed on this page.
What does the financial guru have to say about investing in virtual currencies?
Cryptocurrencies have become popular investments. Many people are interested in diversifying their portfolios by buying crypto because it’s a newer asset class that presents a lot of potential. Some people may also be enticed by stories of those who have made millions investing in crypto, or by social media hype surrounding certain currencies.
If you’re considering a crypto investment, it may be helpful to look at what financial experts like Suze Orman have to say about virtual coins. Orman is one of the best-known personalities in finance, and she’s provided clear advice about how much she believes it makes sense to invest in this asset type.
Orman’s advice was focused on Bitcoin, the most widely known virtual currency . But the fundamental principles behind her suggestions are relevant for any crypto investment you may be considering.
Dont Make Investments On Hype
Its true for stocks and even more true for crypto. Ignoring hype around a project or coin is going to be crucial to your success.
When cryptocurrencies are involved you should never base your investing on what others are saying . Instead you should be studying the market, the project, and the price action of the coin and then taking all that knowledge and using it to make informed investing decisions. You still might take some risks, but at least they will be well-informed and calculated risks.
Basing your research on the advice of others can be acceptable, but you will need to learn how to distinguish between those with good knowledge of trading and investing and those who are simply trying to shill for a coin. Mastering this will allow you to filter out much of the noise in the crypto markets and focus on important information that lets you develop your own strategy.
How Does Cryptocurrency Work
You might be wondering, What gives a cryptocurrency unit its value?
For most assets, the value is determined by market factors. Lets take the real estate market, for example. What determines the value of a property? A property might be appraised higher if its in a desirable location, or if its more luxurious, or if its in a neighborhood thats likely to see an increase in home prices.
What about stocks? Stock value is generally determined by the success of the company . Higher profits mean higher dividends, which means higher stock prices.
Cryptocurrency values are also tied to the marketplace, but in a different way. Theres no physical asset thats affected by the local economy. And the value isnt tied to corporate profits. The value of a cryptocurrency unit is entirely dependent on whether or not people want to buy cryptocurrency units.
You read that correctly. The value of cryptocurrency is based on nothing but consumer interest in buying cryptocurrency. If lots of people are buying crypto, then the value will rise. If people stop buying crypto, then the value will fall.
In the same vein, cryptocurrency can yield high returns if an investor takes advantage of marketplace surges.
Read Also: How Much Is It To Buy One Bitcoin
Is Bitcoin Safe And More Final Thoughts On Bitcoin
Bitcoin is an incredibly volatile but explosive asset. Thats why you might not need an aggressive allocation for bitcoin to have a considerable impact on your portfolio.;
And given that bitcoin is near all-time highs at the time of this posts initial publication in January 2021, you might simply dollar-cost-average into your position. You might be offered lower prices in the future. But if bitcoin keeps rising, then youre making money on the way up. Thats not a bad deal, either. If youre interested in going deep into bitcoin, have a read of The Bitcoin Standard from Saifedean Ammous.;
Given its explosive nature, you might develop an exit or rebalancing plan as well. I invested at a weight of 2% with plans to add more. But the recent surge in bitcoin price quickly took me to over a 6% weighting. I may trim the bitcoin holding when it reaches a 15% weighting, reducing it to 10%. When or if it moves to 15% again, trim back to 10%. Rinse and repeat. My risk is managed, as I am then in a very positive position at the very first trimmingeven if I were to lose the remaining position.
For me, it was a no-brainer risk-return proposition, but you will have to decide for yourself.;
This post is not a recommendation for bitcoin or crypto investment advice. If you decide to invest, please ensure that you understand the risks, and the risk of permanent loss.;
Dale Roberts is a proponent of low-fee investing who blogs at;cutthecrapinvesting.com. Find him on;.;
How To Invest In Blockchain
Blockchain is often associated with cryptocurrency, but its a technology that stands on its own two legs. It might be a good investment option in its own right.
Several large technology companies run blockchain operations, such as IBM, Oracle Corp., and Visa. You might consider purchasing individual stocks in these companies, or you could purchase exchange-traded funds that deal exclusively with blockchain-related companies. Some viable ETFs include:
Reality Shares Nasdaq NexGen Economy ETF
Amplify Transformational Data Sharing ETF
Innovation Shares NextGen Protocol ETF
These ETFs have performed very well over the past year and have generated good returns. The blockchain sector, as a whole, has outperformed the market.
Many investors are wary about investing in blockchain because theyre afraid of the volatility associated with cryptocurrency. But its important to know that investing in companies that run a blockchain is not the same thing as investing in cryptocurrency. Investing in the stock market is less risky than investing in crypto.
Don’t Miss: How Much Money Can You Make Investing In Bitcoin
Maintain A Healthy Crypto Portfolio
Keeping a healthy portfolio means creating your core investment, and making sure you diversify by adding in a number of satellite investments. This helps to even out your returns as the winning picks offset any losing picks.
This is true of diversifying your entire portfolio by including cryptocurrencies and its true of the crypto portion too. By adding a number of different cryptocurrencies youre diversifying your risks and spreading your exposure to a broader mix of assets.
While this type of diversification means youll almost surely have some losers in your portfolio its far better to lose a few while winning some rather than losing it all because you kept all your crypto investment in one coin. You might not get the eye watering returns of a single rocketing coin, but you also wont risk losing everything if the coin you pick crashes and burns.
Which Coins Should Be In Your Cryptocurrency Portfolio
I have diversified into multiple different coins and my cryptocurrency portfolio is split into several tiers of investment. I have selected which coins to invest in with care and every coin is on this list for a reason. Some of these coins cost thousands of dollars a pop, others are mere cents.
I have built my cryptocurrency portfolio using a risk-reward formula that is acceptable to me. Youll have to decide how much risk you want to take on and that should influence which coins you invest in.
I recommend keeping at least 70% of your portfolio in safe coins: Bitcoin and Ether.
Don’t Miss: What Is The Best Crypto Hardware Wallet
How Much Is Bitcoin Worth
How much is one bitcoin worth? Well, it depends on the day. Bitcoin has value because enough people believe bitcoin has value. That may be no different than gold. Gold is really just a shiny rock; but because it was decided centuries ago that gold was desirable , it is considered a store of value. It became a currency and also a store of wealth, and a portfolio asset in modern times.;
While no one knows with any certainty how much gold might be discovered, the algorithm for bitcoin release is capped at 21 million coins. To date, just over 18.5 million bitcoins have been created, and there are almost 2.4 million coins left to be released. Currently, 900 coins are released each day, and the last bitcoins will be released around 2040. Bitcoin miners are rewarded with the new bitcoins, in payment for their verifications of the transaction on the blockchain.;
It is the scarcity of bitcoin, and its finite quantity, that offer the greatest appeal to those who reject or question the value of fiat currencies such as the US dollar, the euro or the Canadian dollar. Certainly, bitcoin, as well as fiat currencies, are created out of thin air. But while central banks can create as much new currency as they see fit, there is a hard limit to the amount of bitcoin. Thats why those who favour bitcoin often call it the hardest currency on earth.;
How To Invest In Cryptocurrencies Step By Step Guide
As mentioned before I will show you one of the best ways how to invest in cryptocurrency with one of the most trusted sites for cryptocurrency investing.
This guide will be featuring instant exchange Changelly.
This cryptocurrency exchange is located in Malta along with other famous brokers such as Binance.
It features over 160 cryptocurrencies and you can invest in these coins using Visa, Mastercard, Bank Transfer, or Apple Pay.
Or if you want you can exchange cryptocurrencies instantly on the exchange.
For example, if you own Ethereum and you are interested in investing in Chainlink, all you have to do is to make a crypto swap between the coins, instantly.
If Changelly is new to you it will not come as a surprise to me as this startup from 2013 started very slow.
But it has become popular in recent years and its reputation keeps growing every year in the crypto community as a very safe and robust platform to buy and trade cryptocurrencies.
Changelly is special in the way it operates, as an instant exchange its connected and integrated into other exchanges.
They use a trading algorithm that scans exchanges like Binance, Bittrex, and 8 other top platforms to give you the best prices on the market at the moment.
This allows you to invest in cryptocurrency from the most popular platforms without even signing up for the exchanges.
Changelly requires you to send in your KYC documents to prove your identity before you start investing.
Also Check: Where Can You Pay With Cryptocurrency
Investors Store Cryptocurrency In A Crypto Wallet
A crypto wallet is the central hub of cryptocurrency. Its where investors manage your crypto, and its where investors send and receive cryptocurrency from other people.
But what is it exactly? Well, its basically a software program that gives exclusive access to the crypto an investor owns place on the blockchain. Depending on whether the wallet is hot or cold , investors can carry their wallet on a mobile device or an external drive.
Keep in mind: crypto wallets dont store cryptocurrency themselves. They store a public and private key, both of which allow investors to claim the cryptocurrency on the blockchain .
To give you a deeper dive: the public key is like a bank account number. Investors give it to other users in order to receive cryptocurrency. A private key is like a PIN number. It is used to unlock transactions, prove ownership of crypto coins, and ultimately spend or trade them. Note: never under any circumstance give away this private key to another user. If someone has a private key, they can spend the crypto in the associated account.
When you own cryptocurrency, youre basically saying you have the private key to prove the crypto is yours. Anyone on blockchain can look at the cryptos public key to verify that you are indeed the owner. Andto bring it all homeyour crypto wallet keeps your public and private keys extremely safe.
Crypto wallets come in a few different forms, including:
Choose A Cryptocurrency Exchange
First, you need to pick an exchange to buy fromlike choosing a broker for stocks. After selecting which exchange you want to start investing in cryptocurrency with, you will be able to make an account with them. There are many options open to you, but the most popular crypto exchanges are:
You May Like: What Is The Price Of Bitcoin Gold