The global cryptocurrency market valuation reached a high of $2.9 trillion in November 2021.
Cryptocurrencies, especially Bitcoin, have become very popular in the past few years. Some people have managed to make millions of dollars by investing in cryptocurrencies. However, massive losses are not uncommon in the cryptocurrency industry.
So, what is a cryptocurrency, and should you invest in it? Here is the crypto for beginners guide.
What Is Cryptocurrency?
Cryptocurrency is a digital currency that enables people to buy and sell goods and services. Unlike traditional currencies, no government or central bank manages crypto. Instead, it uses mathematical equations to verify transactions.
Cryptocurrency runs on the blockchain system. This is a distributed ledger available to the general public.
How to Invest in Cryptocurrency
Beginner crypto investors can begin trading in cryptocurrency within a matter of minutes. The first step is to open a crypto wallet for beginners and provide your identifying information. The information includes copies of your driver’s license and proof of address.
Your cryptocurrency account is usually called a wallet. The first type is the software wallet or a hardware wallet. The software wallet is a computer program that holds your crypto for trading.
You can also select a hardware wallet to store your crypto. This is a physical device, such as a USB that can store cryptocurrency. Hardware wallets are more secure than software wallets.
Once your wallet becomes active, deposit some funds into it. You can deposit from your credit or debit card, Ewallet, PayPal, and more.
The third step is to choose a cryptocurrency to invest in. Generally, people select cryptocurrencies that are increasing in value.
Top Cryptocurrencies for Beginners
There are thousands of cryptocurrencies, but only a few are profitable. Crypto trading for beginners usually starts out with buying Bitcoin and Ethereum. Regardless, you should conduct due diligence about the history and market evaluation of your preferred cryptocurrency.
Other top cryptocurrencies include:
Dogecoin: It has grown exponentially and has attracted great speculation.
Binance Coin: Binance is the biggest cryptocurrency exchange in the world. The exchange owns Binance Coin, but this crypto isn’t very popular.
Enjin Coin: It is based on the Ethereum blockchain and is usually used to assist in NFT trading. The Enjin Coin price is fairly stable.
Should You Invest in Cryptocurrency?
There are advantages and disadvantages to investing in cryptocurrency. The main advantage is that some cryptocurrencies have a high rate of return. In addition, it’s very easy to buy and sell cryptocurrencies as compared to stocks.
The biggest disadvantage of cryptocurrencies is their high volatility rate. Similarly, cryptocurrencies enjoy little or no protection from the government. If criminals get hold of your wallet, they can easily clean you out.
Learn Crypto for Beginners Tips to Venture Into This Field
Good investors expand their portfolios to reduce risk. Investing in cryptocurrencies can be one of the best ways to expand your investment portfolio. To successfully invest in crypto, you’ll need to know proven crypto for beginners tips.
There is so much that is involved in investing in cryptocurrency for beginners. Please read our other blogs for more information.