Wednesday, August 10, 2022

How To Invest Safely In Cryptocurrency

What Can You Buy With Cryptocurrency

Investing in cryptocurrency safely with Arculus

When it was first launched, Bitcoin was intended to be a medium for daily transactions, making it possible to buy everything from a cup of coffee to a computer or even big-ticket items like real estate. That hasnt quite materialized and, while the number of institutions accepting cryptocurrencies is growing, large transactions involving it are rare. Even so, it is possible to buy a wide variety of products from e-commerce websites using crypto. Here are some examples:

Technology and e-commerce sites:

Several companies that sell tech products accept crypto on their websites, such as newegg.com, AT& T, and Microsoft. Overstock, an e-commerce platform, was among the first sites to accept Bitcoin. Shopify, Rakuten, and Home Depot also accept it.

Luxury goods:

Some luxury retailers accept crypto as a form of payment. For example, online luxury retailer Bitdials offers Rolex, Patek Philippe, and other high-end watches in return for Bitcoin.

Cars:

Some car dealers from mass-market brands to high-end luxury dealers already accept cryptocurrency as payment.

Insurance:

In April 2021, Swiss insurer AXA announced that it had begun accepting Bitcoin as a mode of payment for all its lines of insurance except life insurance . Premier Shield Insurance, which sells home and auto insurance policies in the US, also accepts Bitcoin for premium payments.

Whats The Most Secure Way To Buy Cryptocurrency

With the rise of crypto has come a similar rise in the number of online exchanges and marketplaces where users can buy and sell crypto. As a general rule, the safer online platforms tend to ask you to prove your identity, as they follow Know Your Customer and Anti Money Laundering guidelines.

Many popular crypto exchanges, such as Coinbase, require customers to verify information about themselves before they gain access to certain trading features. If youre just starting out in the crypto world, its generally a good idea to go with an exchange or marketplace that takes security seriously and implements these types of steps to verify your identity.

At N26, your security is our top priority. You can read more about the security measures we implement to protect all your transactions.

Diversify Your Cryptocurrency Investments

Like stocks and other more volatile investments whose values can fluctuate greatly from day to day, theres no foolproof investment strategy for cryptocurrency thatll guarantee youll see a high rate of return on your investment. All trades have the potential to bring in profits or result in substantial losses based on a variety of factors.

Thats why, similarly to investing in stocks, its a wise idea to diversify your portfolio by investing in different cryptocurrencies. You dont want to risk putting all of your crypto eggs in one basket one coin just in case its value tanks overnight. When you have multiple currencies in your portfolio, the others can absorb some of the risk when one doesnt perform well. And, you wont have lost all the money you invested.

One effective approach involves choosing a high-demand cryptocurrency, such as Bitcoin or Ethereum, while also investing in emerging cryptocurrencies known as altcoins.

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Now You Know How To Invest In Cryptocurrency

Cryptocurrency investments can see impressive growth in short periods, but its essential to have a thorough understanding of how a project works before risking any capital. Short-term investments may seem like an easy way to make a quick buck, but trading on briefer time scales requires experience, intuition, and nuance. Volatile markets can spark all kinds of emotions in inexperienced traders, and what might seem like the right decision in the moment can often turn out detrimental in the grand scheme of things. Blockchain takes control away from centralized institutions and empowers the individual investor.

Bitcoin gave us decentralized money, and altcoins gave us a decentralized economy. The industry may be young, but its already on the road to mainstream adoption. As more people hop on board, cryptocurrencies may soon become less of an investment in blockchain and more of an investment in the future economy.

NOTE

This text is informative in nature and should not be considered an investment recommendation. It does not express the personal opinion of the author or service. Any investment or trading is risky, and past returns are not a guarantee of future returns. Risk only assets that you are willing to lose.

Choose A Payment Option

How to Invest in Cryptocurrency: Expert Advice for Every Investor ...

Before you buy a crypto coin, you need to add money to your fund to enable purchases. You can add funds via UPI, net banking, bank transfers, or even a cryptocurrency wallet. Different crypto exchanges will charge different transaction fees for certain payment options. So, its highly advised that you research well before going ahead.

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Protecting Yourself While Investing In Cryptocurrency

You must take extra steps to protect yourself and your capital with any investment type. There are a few common concerns when it comes to cryptocurrency: credibility, security, privacy. Many investors are skeptical of crypto platforms and are hesitant to start investing.

A great way to mitigate these concerns is by thoroughly researching the crypto you want to invest in and whats behind the platform. Look up who owns the marketplace you are interested in and gather more information about them. Research how old the company is and in what stage of development the platform is in.

Cryptocurrency is unfortunately susceptible to hackers and other technical issues that simply dont impact other investments as frequently. For this reason, it is crucial that you fully understand the marketplace you choose to work with.

It is not uncommon to choose platforms high profile investors are known to work with as a starting point. This, along with a sound company structure, can help serve as a sign of stability for that marketplace.

As you continue to learn how to invest in cryptocurrency, take the initiative to read the fine print before you start an account. The companys prospectus will provide you with insight into the companys inner workings. This information can help provide you with peace of mind and let you know exactly how secure your investment will be.

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.

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If Done Right You Can Reap Benefits From Your Cryptocurrency Investment Heres How

In 2009, Bitcoin, the first cryptocurrency, was just a fad that no one believed in. While the blockchain technology behind Bitcoin was impressing the tech community, it wasnt drawing the interest of the common public as an investment option. Now after more than a decade, a lot of cryptocurrencies have entered the crypto market, and Bitcoin has emerged first in line with the highest value.

At the moment, investing in cryptocurrency is on every investors radar. People who bought cryptocurrency in 2017 before the price explosion are reaping the benefits of the investment decision of their lives. So, are you ready to start your investment journey with cryptocurrency?

How To Invest In Cryptocurrency?

1. Start Small

Like the stock market, the crypto market is extremely volatile which means prices will rise and fall unpredictably. It is only wise to invest in cryptocurrency after you make sure you have enough liquid funds for at least 6 months without any debts. Once youre clear on this, start by investing in stocks to understand your capacity to deal with risks. Once you know you can handle the ups and downs, set aside a small part of your money to invest in cryptocurrency. If possible, limit your investment to 5-10% of your income.

2. Select your Cryptocurrency
3. Pick the Right Cryptocurrency Exchange
4. Choose a Cryptocurrency Wallet

What Really Is Cryptocurrency

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While you may have heard the word cryptocurrency a lot, it may not initially be obvious what it actually is.

To put it simply, cryptocurrencies are digital currencies. Instead of having a physical form, units of these currencies are traded over networks that have two main properties:

  • The first of these is that there is no central control over digital currency like there is with physical money.
  • The second is that there is no central storage of transactions, such as a database that lists them all.
  • Instead, cryptocurrencies use blockchain technology to build a network of thousands of computers that process and store transactions together.

    The sheer number of computers in the system makes it difficult to have a common record of all sales and purchases.

    This decentralisation is both one of the biggest advantages and disadvantages of cryptocurrency.

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    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.

    Things To Know Before Investing In Cryptocurrency

    It is crucial to be aware of several key factors that can influence the success of your investment to make the most informed decision possible. First, you should carefully consider the cryptocurrency itself, its historical performance, and what trends are currently emerging in the market.

    Additionally, it is crucial to do your due diligence on any upcoming ICOs and carefully evaluate all potential risks before investing.

    Finally, it is vital to understand basic financial concepts such as crypto prices and volatility and a clear plan for managing your portfolio once you start investing in cryptocurrency.

    Also Check: Where Can You Buy Bitcoin

    How To Buy Bitcoin With Paypal

    You can also buy Bitcoin through payment processor PayPal Holdings, Inc. . There are two ways to purchase bitcoin using PayPal. The first and most convenient method is to purchase cryptocurrencies using your PayPal account that is connected to a payment mechanism, such as a debit card or bank account. The second option is to use the balance of your PayPal account to purchase cryptocurrencies from a third-party provider. This option is not as convenient as the first because very few third-party sites allow users to purchase Bitcoin using the PayPal button.

    Four cryptocurrenciesâBitcoin, Ethereum, Litecoin, and Bitcoin Cashâcan be purchased directly through PayPal. With the exception of those who live in Hawaii, residents of all states can either use their existing PayPal accounts or set up new ones. You can also use your cryptocurrencies to purchase products and services through the “Checkout with Crypto” feature.

    To set up a crypto account with PayPal, the following information is required: name, physical address, date of birth, and tax identification number.

    It is not possible to use a credit card to purchase Bitcoin using PayPal. During the buying process, PayPal will display a price for the cryptocurrency. But that price is subject to rapid change due to the volatility of cryptocurrency markets. It is a good idea to make sure that you have more than the price you budgeted for the purchase in your bank account.

    What Are The Types Of Cryptocurrency

    What Is Cryptocurrency, And Is It A Safe Investment?

    Before cryptocurrency investing, it is essential to know the types. There are many different types of cryptocurrency systems that you can invest in. Bitcoin is arguably the grandfather of all crypto. It has been around for over 10 years and its the largest cryptocurrency system in the world, with a market capitalization of about $128 billion. Here are some of the other cryptocurrency you can buy:

    • Litecoin: Created by a former Google employee, Litecoin is very similar to Bitcoin, but has shorter transaction times and lower fees.

    • Ethereum: Its a cryptocurrency, but the main focus is on purchasing applications without having to pay a middleman .

    • Ripple: This is a cryptocurrency that doesnt use blockchain technology. Its mostly used by corporations to move large sums of money.

    • Cardano: This is a blockchain-based cryptocurrency thats used primarily to store private data.

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    The Future Of Cryptocurrency In India

    Although the government has currently not considered cryptocurrency as a legal currency and it is also trying to eliminate the private cryptocurrency and its use in financing illegal and unethical activities like money laundering, smuggling, drug trafficking and terror-funding, but on the other hand the government is also trying to utilise the blockchain technology to create an official digital currency issued by RBI and develop a safe, secured, legal and ethical digital economy.

    This positive initiative by the Indian government towards the future of cryptocurrency in India undoubtedly indicates a bright future, but only for the official cryptocurrency. Apart from opening the doors to secured investment and trading in cryptocurrency and establishing a digital economy, officially recognising cryptocurrency will further give rise to several start-up opportunities and career options for the youth of our country in the blockchain sector.

    What Will The Future Of Bitcoin Look Like In 2022

    With bitcoin currently at record highs, the chances of a price crash seem greater than ever as some investors decide to take the profits they have made.

    Cryptocurrencies are an unpredictable asset class and nobody really knows just how high the price of bitcoin could go. But with the prices so high and governments looking at how best to go about regulating these coins, the risk of investing in bitcoin are very high.

    As always with investing, it is impossible to really tell how 2022 will look for digital currencies. But with certain trends occurring repeatedly throughout the history of bitcoin, there are some reasonable predictions.

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    How Do Beginners Buy Bitcoin

    Beginners can buy Bitcoin online from a crypto exchange such as eToro, Gemini or Coinbase. Crypto exchanges make it easy to buy and sell Bitcoin and other cryptocurrencies directly from your smartphone, tablet or computer. They also allow you to monitor the movements and performance of your crypto holdings.

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    How To Safely Invest In Cryptocurrency

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    How Much Should I Expect To Pay To Purchase Bitcoin

    Typically, the price to purchase bitcoin consists of a fee per trade plus the cost to convert a fiat currency, generally dollars, to bitcoin. The fee per trade is a function of the dollar amount of the trade. A higher trade amount will carry higher fees. The overall purchase cost also depends on features offered at the venue. For example, Robinhood does not currently offer an online wallet to store bitcoin. Therefore, you will need to budget for online wallet costs for your purchase.

    How Do I Know If A Cryptocurrency Is Worth Investing In

    Investing in anything begs analysis. For long-term ventures, investors use three main methods to gauge the upside and risk of a particular asset. Fundamental analysis evaluates a token or projects intrinsic value in the context of the current market and its outlook. Most projects publish a whitepaper before a token sale, and studying this document can present more profound insight into what the asset offers. Make sure to review economic factors and other industry-specific events like Bitcoins supply halving every four years.

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    Major Companies Are Engaging With 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.

    Be Ready For A Wild Ride

    how to invest in cryptocurrency and get profit 3

    Bitcoin has had a lot of ups and downs over the years. This chart from CoinDesk shows the price performance of Bitcoin from 2013 to the present. At the beginning of the chart back in 2013, Bitcoin was trading below $130.00. But it skyrocketed to $17,060.55 on December 11, 2017, before crashing again a few months later. In 2021, it started to jump again, getting close to $64,000 on April 14th, 2021.

    No matter where or how you decide to buy, sell and store your cryptocurrency, be prepared for instability. Cryptocurrencies are far less predictable than traditional investments. And with any investment, it’s key to remember that what goes up can come down again.

    So You Want to Learn About Investing?

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    Best Penny Cryptocurrency To Invest In

    If you come across the term ‘penny cryptocurrency’, this simply refers to digital tokens that trade for less than $1. As such you can explore the cheapest options via our best cryptos under $1 guide.

    Crucially, it is important to remember that just because a cryptocurrency is cheap – this doesn’t mean that you are taking on enhanced risk. After all, the value of a cryptocurrency is determined by the number of tokens in circulation and its current market price.

    • For example, as of writing, XRP is trading at just $0.86 per token, albeit, it carries a market capitalization of over $40 billion.
    • On the other hand, Yearn.finance has a market capitalization of less than $1 billion even though as of writing – a single token would cost you more than $23,000.

    Nevertheless, if you’re specifically looking for the best penny cryptocurrency to invest in 2022 because you wish to own a large number of tokens – consider the projects outlined below:

    Once again, conduct your own due diligence before investing in penny cryptocurrencies.

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