Invest in cryptocurrency. Where to start and how to reduce risk?Paul Roberts 29 / August / 23 Visitors: 47
New cryptocurrency investors often ask themselves the following questions: As with all investments, there are certain features to consider to maximize returns.
Cryptocurrency is a digital currency based on cryptocurrency. At the heart of cryptocurrencies is a blockchain, a decentralized database accessible to all members of the network.
Cryptocurrency transactions take place directly with participants without going through central banks or other financial institutions. Cryptocurrencies can be exchanged for traditional currencies such as dollars, euros and rubles. All cryptocurrencies except Bitcoin have the name "altcoins".
Step 1: Analyze the state of the cryptocurrency market
Changes in the value of all currencies, including cryptocurrencies. The principle of cryptocurrency profit is to sell low when profitable and sell high when profitable.
For example, in December 2017, the Bitcoin price peaked at 19,000 USD, but has since fallen significantly. According to analysts, rising Bitcoin prices are reducing miners' salaries in the second half of the year. The crossover occurs almost every 4 years and is related to the overall supply of Bitcoin.
Bitcoin price is volatile and volatile. 2020. It's happening. It was hit hard by the global financial crisis caused by the novel coronavirus infection (Corona 19) pandemic. Earlier this year, the price of Bitcoin reached around $7.2 million. By the end of the year, the price had risen to $19,000.
Step 2: Risk Assessment
Financial markets, for better or for worse, are undervalued creatures.
The high volatility of cryptocurrencies can bring quick and large profits in speculative trading, but no one can guarantee that there will be no losses and small profits.
The common risk associated with cryptocurrencies is fraud. Therefore, do not open unverified links sent by email. Scammers pretend to be trusted sources and ask you to follow links or provide confidential information.
Step 3: Choose a fund to invest in
Risk issues can be simplified and divided into two main groups: cryptocurrency volatility and security issues.
That's why it's important to do research before buying any cryptocurrency. Sign up for the official developer toolkit. It may take time, but it will help you decide to invest in cryptocurrencies.
In world of cryptocurrencies, there are over a thousand currencies besides Bitcoin, Ethereum (ETH), Litecoin (LTC) and Ripple (KSRP). You can read and analyze the news to decide how much money to invest. This is very important because there are many scammers in cryptocurrencies and the safety of your investments depends on making the right decisions.
Should You Invest Cryptocurrency?
Cryptocurrency volatility can be risky, but experienced traders have learned to use it to their advantage. They carefully monitor all price changes, buy and sell at the right time and make a profit.
These skills improve with experience, but learning trading tools is important not only for breaking even, but also for increasing profits.
Although the cryptocurrency market is volatile and unpredictable, some experts do not recommend long-term investment in the cryptocurrency market.
However, Bitcoin is over a decade old, much longer than most analysts think. Cryptocurrency prices fluctuate from time to time, but the market is expected to grow steadily over the long term. Even in 2020. The crisis caused by the COVID-19 pandemic has set a new record for Bitcoin price.
However, you should check your interest and skills before investing in cryptocurrencies.
Paul Roberts 51 years old Born in Edinburgh. Married. Studied at University of Oxford, Department of Public Policy and Social Work. Graduated in 1997. Works at Standard Life Aberdeen plc.