Tuesday, June 28, 2022

How To Determine Which Cryptocurrency To Buy

Are You In A Position To Buy Crypto

How to determine Pi cryptocurrency value? Can you buy & sell it ?

Generally, if you decide to buy crypto, it belongs in a cluster of relatively risky assets that make up a small percentage of your overall portfolio 5% to 10% is one common guideline.

Larsen says he doesn’t recommend that anyone invest in cryptocurrency before meeting other goals for both short- and long-term financial health. He says investors should extinguish any consumer debt, for instance, and make sure they’re investing enough to get their employers’ matching contributions to retirement accounts such as 401s.

Beyond that, buying into crypto doesn’t require a substantial financial commitment. Some online exchanges allow customers to buy in increments of a dollar or less.

Mati Greenspan, chief executive of the research firm Quantum Economics, says one way to get into crypto is to put aside a few spare dollars per week.

Choose How You’ll Pay

While there are thousands of cryptocurrencies being traded around the world, you’ll find that the most popular options are widely available for purchase in fiat currencies such as the U.S. dollar. If you’re a first-time buyer, you’ll very likely have to use regular money to buy cryptocurrency.

If you’re a more experienced investor, you may want to trade some of your existing crypto holdings for another type of cryptocurrency for instance Bitcoin for Ethereum.

What Cryptocurrency Should I Invest In

If you’re a beginner and searching for the best crypto to invest in, then perhaps it might be wise to stick with established projects like Bitcoin, Ethereum, and XRP. However, there are thousands of other cryptocurrencies to choose from – so you should ensure that you conduct your own independent research.

This article was written for Business 2 Community by Kane Pepi.

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Unclear Or Anonymous Ownership

Are the founders or the team anonymous?As weve mentioned earlier, a coin with no information about the team behind it is sketchy, to say the least. Even if there is a team behind it, do a Google search on the individuals to check out their history.There have been multiple ICOs in the past few months that were led or founded by individuals who have a history of fraud before e.g scamming investors off their money, money laundering, and stealing funds from cryptocurrency exchanges.Only invest in coins where the team is reputable, highly skilled, and respected by the community.

Major Companies Are Engaging With Cryptocurrency

How to Buy Cryptocurrency?

Some of the biggest and most dominant companies globally are now engaging with cryptocurrency – which once again, proves beyond doubt that this industry is here to stay in the long run.

For example, Tesla – which is one of the largest companies globally with a market capitalization of over$1 trillion, invested $1.5 billion from its balance sheet in late 2020 into Bitcoin.

Then you have companies like Overstock, Paypal, Microsoft, and Starbucks – all of which allow you to spend Bitcoin on their respective products and services.

Recommended Reading: How To Transfer Bitcoin To Your Bank Account

Is Cryptocurrency A Good Investment Four Things To Know

Before you say good-bye to your dollars and hello to Bitcoin, Ether or Doge, there are a few things you need to know up front.

1. Cryptocurrency is unstable.

Its truecrypto is about as hot tempered as a 12-year-old. Its value swings way up, only to come plunging back down, and you never really know what youre going to get each day. The value of cryptocurrencies goes through extreme ups and downs. Theres no denying that some are really hot right nowbut for how long? Someone sneezes and the price drops! Investing in cryptocurrency is risky, to say the least.

But heres the crazy thing: A recent study by Piplsay shows that 50% of Americans think investing in cryptocurrency is safe.2 Fifty percent! News flash: Cryptocurrency definitely isnt a sure thingit carries a huge amount of risk. Lets be real here, all investing comes with some level of risk. But why jump all the way to the deep end with something this up and down?

2. Cryptocurrency has lots of unknowns.

Theres still a lot that needs to be ironed out with how cryptocurrencies work. Think about it: Nobody even knows who the founder of Bitcoin is! Only a small percentage of people in the world really understand the system and know how to operate it. Ignorance makes you vulnerable. We always tell people that if you cant explain your investments to a 10-year-old, you have no business investing in them to begin with. Youre setting yourself up for a big mess.

3. Cryptocurrency makes fraud easier.

What Is The Best Move With Crypto

Timing a cryptocurrency buy can be a difficult if not treacherous thing to attempt since there are all kinds of elements that go into the price of a coin. Although there are fewer personality-based drivers , there are more lemming-like sell-offs. People have only so much tolerance for risk, and the fear of missing out on selling a crypto holding for a short-term profit is a tempting siren song.

With crypto, like with any kind of investment, your best bet will always be to hold on for the longer term, and buy a little bit at a time. Your highest returns will come from this strategy, even though it’s not particularly sexy and doesn’t provide any of that Vegas-like thrill for investors hoping for a quick winner.

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Cryptocurrency Is Still A New Concept

On the one hand, cryptocurrency has achieved legitimacy in many ways – especially when you consider the vast number of established companies and brands that are now engaged in this space.

However, it is also important to remember that the world’s first cryptocurrency – Bitcoin, was only launched in 2009. Moreover, some of the largest cryptocurrency projects in this space are even younger.

  • For example, Cardano and Solana were only launched in 2017.
  • Avalanche and Shiba Inu – both of which carry a multi-billion dollar market capitalization, were launched as recently as 2020.
  • You then have Lucky Block – which is one of the most successful cryptocurrencies this year – was launched in early 2022.

And all in all, it is far from too late to invest in cryptocurrency – as the broader marketplace is still in its infancy.

Choose A Platform To Buy Cryptocurrencies

How To Know When To Buy And Sell Cryptocurrency

One of the disadvantages of buying cryptocurrencies is that you can’t get them in all the usual financial places. Banks don’t offer them and neither do investment brokerage firms.

For the most part, you’ll be limited to buying, holding, and selling cryptocurrencies on dedicated cryptocurrency exchanges.

Some of the largest of these exchanges include:

eToro

Gemini

Further Reading: our Gemini Review.

Unifimoney

Further Reading: our Robinhood Review

Advertiser Disclosure

Wealthfront

If you want exposure to cryptocurrency without actually having to buy crypto, could be the answer. You can gain exposure through two distinct cryptocurrency funds: Grayscale Bitcoin Trust and Grayscale Ethereum Trust .

And of course, you still have access to a large selection of ETFs, such as those for specific industries like self-driving cars and cannabis. When combined with cryptocurrency opportunities, you have access to more investments than ever before. Visit our Wealthfront review for further reading.

You can think of these platforms as brokerage firms specifically designed for cryptocurrencies. Each offers trading in the most popular cryptos, and of course, you should expect to pay a fee for both buying and selling.

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Total Float And Maximum Supply

Just like with stocks, you have to take the float and maximum supply into account, when making long-term cryptocurrency investments.

One thing that makes Bitcoin such a valuable commodity is the fact that only 21 million coins will ever be created. Once its all mined, there will be no more supply and demand will determine price.

The supply of Ripple is also limited. However, the maximum number is 100 billion coins! That is one of the biggest reasons that price has stayed so low.

Ether on the other hand, will have an unlimited supply. The same amount of Ether will be produced every year. As time goes by, that amount will become a smaller percentage of the total outstanding supply of Ether.

But this ever-increasing supply should keep the price fairly low, especially in relation to a currency like Bitcoin.

These are the types of supply dynamics that you have to understand about each currency.

Tips For Investing Responsibly

  • Investing in cryptocurrencies can be an intriguing prospect for a portion of your portfolio, but you should make sure to diversify your investments with other holdings. A financial advisor could advise you on asset allocation and help you create an investment plan. Finding a qualified financial advisor doesnt have to be hard. SmartAssets free tool matches you with up to three financial advisors in your area, and you can interview your advisor matches at no cost to decide which one is right for you. If youre ready to find an advisor who can help you achieve your financial goals, get started now.
  • How much you invest depends on how much risk you are willing to take, and how long your time horizon is. Our asset allocation calculator will help you align your investing strategy with your risk tolerance.

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Buying And Storing Crypto

You can buy or sell crypto on a crypto trading platform using traditional money. Crypto is kept in a unique digital wallet or hardware wallet.

A users wallet has a set of private keys that are used to authorise outgoing transactions on the blockchain network. A wallet may be a software or hardware wallet. A hardware wallet stores these private keys on a secure hardware device not connected to the internet. This can protect the users wallet from hackers.

Scam alert: an increased number of Australians have reported losing money through crypto-asset or cryptocurrency scams.

How To Calculate Cryptocurrency Profit

Cryptocurrency Dealer  Buy Cryptocurrency

Millions of people around the world generate healthy profits from trading cryptocurrency, swapping and exchanging crypto, and mining crypto. One way or another, its a profitable sector and a prosperous industry.

Even with ups and downs that the whole cryptocurrency industry invariably goes through savvy traders usually come out with a profit. One of the main challenges, even for experienced traders, is understanding how to calculate cryptocurrency profits.

Because cryptocurrencies always go up and down, its crucial to diversify a portfolio. It usually makes sense to hold some of the largest and most popular cryptocurrencies, such as Bitcoin , Ethereum , Bitcoin Cash, Ripple, and several others. Alongside these, it makes sense to diversify as much as possible aiming to benefit from new opportunities whenever they come along such as ICOs and IDOs and therefore new coins and cryptocurrencies.

Whether you are buying or selling, trading, swapping, exchanging or mining, its crucial to know how to calculate profits. In this article, we look at the easiest ways to do that, so that you’ve got a clear idea how much profit you have made from every transaction.

How to calculate crypto trading profits

Fortunately, for those buying and selling cryptocurrencies, the basic principles of calculating profits is quite simple. Theres the price you buy the crypto for and the price you sell them.

Image source

The profit you make isn’t the full $10,000.

Buy 2 x BTC = $25,000.00

Also Check: What Makes Bitcoin Go Up

Your Money Could Be Stolen

Be aware that a hacker can potentially steal the contents of your digital wallet.

Your digital wallet has a public key and a private key . However, crypto-asset systems allow users to remain relatively anonymous and there is no central data bank. If a hacker steals your crypto-asset, you have little hope of getting it back.

Using a wallet thats held offline, called a hardware wallet or cold storage, may provide additional protection.

Identifying Cryptocurrency Trends Using The Golden Cross

The golden cross happens when a short-term moving average crosses above the long-term moving average.

In the golden cross system, the most reliable moving average values are:

  • 50 EMA
  • 200 SMA

The price should be above the 200 SMA and 50 EMA in an uptrend, pointing out that both short-term and long-term traders are bullish. Later on, when the 50 EMA crosses above the 200 SMA, it indicates further bullishness in the price. Therefore, when a golden cross occurs, we can consider the trend as an uptrend and look to buy.

Here is a visual representation of a golden cross in the crypto market:

While the golden cross is a way to identify an uptrend, the opposite of the golden cross is the death cross which indicates a downtrend.

The image above is from a H1 chart of ETH/USD where the price moved lower as soon as the death cross appeared.

Also Check: What Is The Price Of Bitcoin Gold

How To Invest In Cryptocurrency

This beginner’s guide on how to invest in cryptocurrency in the US will now conclude with a detailed walkthrough of how to purchase your first-ever digital asset.

The steps below will show you how to open an account with eToro, deposit US dollars fee-free, and subsequently invest in your chosen cryptocurrency from a stake of just $10.

Timing A Crypto Buy Can Be A Very Challenging Project But There Are Some Trends That Seem To Be Fairly Common In Crypto Markets

How to crack the cryptocurrency code – everything you need to know on crypto, NFTs

Cryptocurrency is a volatile asset class that experiences a lot of ups and downs. Because of that, people often get the idea that they should be trying to time their investments — purchasing within specific windows to get the best possible price. However, because cryptocurrency is traded 24 hours a day by investors around the world, timing a cryptocurrency buy is never cut and dried.

If you want to invest in crypto, your best bet is to practice dollar-cost averaging. Using this method, you buy a little bit at a time over an extended period. Even if you invest at some intervals that turn out to be not all that low, you will catch others that are very low, and it may average out.

There are ebbs and flows to the crypto market that vary wildly depending on the specific cryptocurrency you’re buying. Tokens may trade with yet another pattern. For someone intent on timing a crypto purchase, it will pay to really analyze the history of specific investment types.

Also Check: How To Buy Ether Cryptocurrency

Should I Invest In Cryptocurrency

Plain and simpleinvesting in cryptocurrency is not a good way to build wealth for your future. If you really want a solid investment, dont mess around with adding some crypto coins to your digital wallet. Heres the better plan: If youre out of debt, have an emergency fund that will cover three to six months of expenses, and youre ready to invest, then focus on investing 15% of your income in growth stock mutual fundswhich are way more secure than crypto.

Dont give in to stupid just because theres a lot of hype. Weve talked to people who have taken out a mortgage or cashed out their entire 401 early to invest in cryptocurrencyheck no! Dont put it all on the line and risk your financial future, your retirement dreams and your familys well-being. If you cant afford to lose the money, dont invest it in something as unstable as crypto.

Dont Time The Market There Is Not Good Or Bad Time To Buy And Sell

Again, the rule of not timing the market is so important that we have to mention in twice.Unlike stock markets, there is no general rule when to buy or sell cryptocurrencies because the industry is so young and unknown.If you have to follow a set of rules, these are general guidelines that will work most of the time as long as you dont panic sell or buy:

  • Only sell when you achieve your goal. If youve set a goal of $50,000 for your investments, sell only when you hit that figure.
  • Dont panic sell. Again, Bitcoin dropped to $1,800 from nearly $3,000 under a month ago. Ethereum fell from $400 to nearly reaching $100 in the same timeline. Today, Bitcoin and Ethereum are both worth $3,300 and $250 respectively. Not only would you have lost plenty of money by panic selling during this period, you wouldve also been in the red for your investments.
  • Do not have FOMO. FOMO is an acronym for the phrase fear of missing out. Dont buy just because everyone else around you is buying cryptocurrencies. Instead, do your own research and make your own decisions.
  • Only invest what you can afford to lose. This should be taught to all investors, in all honesty. Investing in cryptocurrencies is very much like gambling. There is no guarantee for you to turn a profit likewise, do not get emotionally invested into it.

5 red flags for cryptocurrencies: Dont invest if you see these signals

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How To Determine Good Sell Signals On Crypto

Trading signals are important when it comes to cryptocurrency trading. Knowing when to buy a cryptocurrency is really important if you want to make a profit out of your investments. However, knowing when to sell your coins is just as important. To help you out on finding good sell signals, we depicted some easy methods you can determine when to sell your assets.

Check Out Trustworthy Crypto Exchanges

The beginner

The best crypto exchanges perform a significant number of checks before listing new coins for trading.

You can use these verifications as some kind of quality label to find some of the best cryptocurrencies to invest in which arent listed on this page.

eToro and Binance are some of the biggest crypto exchanges and offer dozens of the best cryptocurrencies for trading — I definitely recommend you check them out.

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