5 Ways to Invest in Cryptocurrency Safely

Are you thinking about putting your money into cryptocurrency? You're likely one of the many potential investors who have a myriad of questions over how to invest and whether cryptocurrencies are a safe investment. In just a few years, the digital currency trend has taken over the world, leading to the scramble for a piece of the pie.

Undeniably, some investors have made a fortune from Bitcoin and other cryptocurrencies, which are forecasted to be worth $2.73 billion in 2025. However, this doesn't mean there haven't been any risks involved. One major risk factor with trading in cryptocurrencies is market volatility, where the value is up one day, then it plummets the next. This is similar to how stocks fare, depending on how a company performs.

Despite the speculations attached to cryptos, you should consider adding them to your portfolio to diversify and earn potential returns. Some experts predict that cryptocurrencies will continue to play a major role in how people make payments in 50 years, given that plans for regulations are underway.

Before venturing into your cryptocurrency journey, there are a few things you should know:

1. Educate Yourself on How Cryptocurrencies Work

The first step is to do your homework on cryptocurrency investing. It's similar to research done on a company before buying the shares. You should also understand the different forms of cryptocurrencies, their features, and how they work. Unlike shares that are backed by a company, cryptocurrencies tend to flow with the attitude of the market. You can check out the many resources available to polish your knowledge, such as All Crypto Whitepapers for well-informed investing.

2. Learn About the Risks

Bitcoin, which is the trailblazer for all other cryptos, began 2021 with a 70% market share before drastically falling to less than 40%. This tells you that investing in cryptocurrencies doesn't always guarantee profits. What also adds to the risk level is cryptocurrency technologies that haven't been fully developed to support investors to make their money. Further, the possibility of regulation could impact the value. Overall, the volatility of crypto markets requires that you take more caution and be on the lookout for any changes in the market.

3. Diversification Is Key

Never put all your cryptocurrencies in one place to avoid losing your hard-earned money. To achieve a balanced crypto-asset allocation, experts generally recommend investing in two ways. One way is to buy coins from different use cases as each coin serves a different use. The other way is to diversify the cryptocurrency according to the project location, such as a country that is crypto-friendly.

4. Figure Out How Much to Invest

As a beginner, try and choose a more stable coin such as Bitcoin, and put in an amount of money you won't lose sleep over. The good thing is that you can start with as little as $5 to $10 to have a feel of being a cryptocurrency investor. Also, choose the best platforms for buying and selling cryptos, such as Coinbase, Gemini, Crypto.com, and Kraken.

5. Plan Your Investment Strategy

In addition, whether you're in for the short or long haul, make sure to have a strategy in place to increase your chances of making a profit. From the get-go, have a good mix of storage. Experts prefer you keep a higher percentage of your cryptocurrency in cold storage- an offline wallet- for better security. Hot storage, which is an online wallet, comes in handy when you need to make a quick trading move.

Another strategy generally recommended is buy-and-hold, which suits a long-term investor. This helps control any emotional decisions after reading a few tweets on crypto trends. In addition, if you're very risk-averse, consider the dollar-cost averaging method, where you buy in small incremental amounts as opposed to a lump sum.

Key Takeaway

While experts may offer good points on how the cryptocurrency market is going, no one can accurately predict the future. As an investor, you have more say over how you want to use your money and the risk you can take. As a whole, being a beginner, it's important to take measured steps and not assume you will have the same experience as the next investor. Otherwise, start small and watch over your investments.

At BillyHelp, we'll help you set the motion of being a smart investor by providing easy-to-understand personal finance and investment information, including cryptocurrency. We also want you to pay your bills in a safe and secure way via the BillyHelp app. When your payments are hassle-free, you can invest intentionally.