The value of all cryptocurrencies dropped below $200 billion for the first time in 2018 this week, creating an opportunity for potential investors to invest. Currently, the bitcoin price is still below $7,000, and this could be the lowest it is going to be this year as the bullish market predicts that the price will rise to about $20,000 at the year-end.
That said, as a potential investor, you have to go through a few steps before taking the plunge.
In this post, you will learn of the things you should do prior to investing in cryptocurrencies to ensure that your money remains safe while making you satisfactory or great returns.
The first step you should take before investing in cryptocurrencies is conducting an in-depth research so that you can understand these coins and their underlying technology. In addition, research will help you know the various cryptocurrency investment options that exist and their level of risk so that you can make the decision that best suits your needs.
Your research should cover how cryptocurrencies work, how blockchain works, the different types of cryptocurrencies and the projects behind them, regulations, and the value of these coins in the market.
You will also need to understand how the process of buying and selling cryptocurrencies work, and the safest way to store them.
Learn by Doing
Once you are through with the research stage, you will probably be feeling overwhelmed. That is why you need to take a practical step and buy a small amount of one of the coins to ‘play’ around with.
Here are the basic steps to getting started:
Get a mobile wallet
Register on an exchange
Buy the cryptocurrency of your choice
You can also go the extra step and try trading the coin on an exchange like Binance. This action step will take you from feeling overwhelmed to feeling excited.
But you cannot invest just yet.
Join Reputable Cryptocurrency Groups
Now that you are more knowledgeable with cryptocurrencies than before, its time to join a reputable cryptocurrency group on Telegram and Facebook so that you can stay up-to-date with coins that are performing well on the markets, exchanges that are good for trading, and investment options that are trending.
These groups will help you make a better decision as long as you avoid being influenced by any FUD (fear, uncertainty, and doubt) and the fear of missing out (FOMO). Potential investors should also avoid pump and dump groups that promise high returns through the manipulation of the markets because they are scams.
If you plan on trading on numerous exchanges, you will need a tool to track your funds. Hackernoon recommends CoinTracking, a tool that “analyses your trades and generates real-time reports on profit and loss.”
Once you have decided which cryptocurrencies you will invest in and the type of investment to undertake, you can now put in a good amount of money. However, ensure that you only invest what you can afford to lose.
Learn How to Stay Safe
Scammers are taking advantage of the popularity cryptocurrencies have gained over the years which means that you should be cautious when typing URLs, entering your passwords or private keys, and when transferring money. You should also disable unnecessary extensions on your browser and “never click on links from google search if you want to open an exchange website.”
Even after you have invested in cryptocurrencies, keep researching and stay up-to-date since this space is always evolving.