The crypto craze has turned more people onto the idea of investing and putting their money to work for them.
With all the first-timers floating around and thinking about getting involved, it’s necessary to understand a few things about crypto assets in order to leverage them successfully.
There’s more to crypto than Bitcoin
While Bitcoin may be the biggest and most hyped cryptocurrency on the planet, it’s not the only asset to consider when making an investment.
There are a whole host of altcoins to get to grips with, from Cardano’s ADA to Dogecoin and beyond. And often the purpose of these coins diverges from what you might expect; in the case of ADA, eco-friendliness was one of the founding principles, for example.
You can buy crypto with a credit card
Top trading platforms let you buy cryptocurrency using a credit card, which means you don’t need to have a lot of your own fiat currency saved up to make an investment.
Just remember that any card payments you make will leave you with obligations to make monthly repayments to your provider until the balance is settled. You don’t want to make a crypto investment, only to end up hurting your credit score because you can’t afford the card repayments.
The market is volatile
Crypto prices can rise rapidly, and fall just as quickly, so being aware of this and taking steps to protect yourself from volatility is sensible.
Of course for a lot of investors that’s the main appeal. Being able to put a small amount of cash into a coin, with the prospect of this being multiplied many times in value if it goes to the moon, is part of the thrill.
The risks are significant
With volatility and uncertainty comes the possibility that you’ll see your crypto investments shrink, rather than increasing in value.
Of course this is more of an issue from a short term perspective, and is why newbies shouldn’t try to trade towards big profits with all of their savings straight away.
Only invest what you can afford to lose, and play the long game rather than looking to make a quick buck, and you’ll reduce your exposure to risk.
Every mistake is a learning opportunity
It’s definitely a good idea to do plenty of research into crypto and blockchain tech before you make your first investment. However, at a certain point you’ll need to pull the trigger and choose your first asset to buy.
The trick here is to not get too caught up in whether or not your first investment is a success. If you do lose out because a coin goes down in value, consider it a learning experience and be savvier next time around.
The bottom line
Crypto is here to stay, so investing now is still worthwhile given how early we are in terms of mainstream adoption. In the years to come, you’ll be glad you took the plunge.
