How to Start Investing in Cryptocurrencies?

25-08-2023

Cryptocurrencies are digital money that exists entirely online. They use a special technology called 'blockchain' to make transactions safe and transparent. If you've never invested in cryptocurrencies, this world might seem complex, but it doesn't have to be. In this blog post, we'll guide you through the basics of starting your crypto investment journey. Whether you're interested in potential financial gains or just curious about digital currencies, this guide is designed to help you take that first step into the exciting world of crypto.

But what exactly are cryptocurrencies?

Investing in cryptocurrencies can be a cumbersome task since they are relatively new to the investment world. Cryptocurrencies exist only in digital form and have no physical counterparts like coins or bills. They operate on decentralized networks, making them immune to central control or manipulation. Transactions are recorded in a blockchain, a chain of secure, linked blocks that ensure transparency and prevent fraud. Strong cryptographic techniques secure transactions and control the creation of new units. Many cryptocurrencies have a capped supply, creating scarcity similar to precious metals.

Cryptocurrencies can be sent or received globally without the need for intermediaries like banks. Transactions are pseudonymous, providing some privacy, but are also visible on the public blockchain. Some cryptocurrency values can be extremely volatile, leading to significant price fluctuations.

What to consider before investing in cryptocurrencies?

Volatility and Risk: Cryptocurrencies are notorious for their extreme price volatility. Prices can skyrocket by substantial percentages within hours or days, but they can also plummet just as quickly. This volatility presents significant risks for investors, as gains can turn into losses rapidly.
Thorough Research: Before investing, take the time to research the specific cryptocurrency you're interested in. Understand its technology, use case, market trends, and the team behind it. Not all cryptocurrencies are created equal, and some may have more potential than others.
Diversification: Don't put all your funds into a single cryptocurrency. Diversification involves spreading your investment across different assets to reduce the impact of a poor-performing one. This strategy helps mitigate risks associated with the extreme volatility of individual cryptocurrencies.
Risk Tolerance and Investment Amount: Assess your risk tolerance honestly. Never invest more than you can afford to lose. Cryptocurrencies' unpredictable nature means you should only use discretionary funds – money you won't urgently need.
Long-Term Perspective: Cryptocurrency markets can be erratic in the short term. Consider adopting a long-term investment approach, where you're less concerned about day-to-day fluctuations and more focused on the potential growth over months or years.
Staying Informed: The cryptocurrency space evolves rapidly. Stay updated on news, technological advancements, regulatory changes, and market sentiment. Being well-informed can help you make informed decisions and react to market shifts.
Security Measures: Cryptocurrency regulations vary widely across jurisdictions. Familiarize yourself with the legal status and regulations concerning cryptocurrencies in your country. Regulatory changes can have a significant impact on the market.
Regulatory Environment: Before investing, take the time to research the specific cryptocurrency you're interested in. Understand its technology, use case, market trends, and the team behind it. Not all cryptocurrencies are created equal, and some may have more potential than others.
Emotional Discipline: Volatility can trigger emotional responses, leading to impulsive decisions. Maintain emotional discipline and avoid making investment choices based solely on short-term price movements.
Seek Professional Advice: If you're new to cryptocurrency investing, or if you're unsure about a particular investment, consider seeking advice from financial professionals who are well-versed in both traditional finance and the intricacies of the cryptocurrency market.

Pros of Investing in Cryptocurrencies:

Cryptocurrencies have shown the potential for remarkable returns in a short period. Some early investors have made substantial profits. Adding cryptocurrencies to your investment portfolio can provide diversification, reducing the impact of poor performance in traditional assets. Cryptocurrencies are built on cutting-edge blockchain technology. Investing can give you exposure to innovative tech advancements.

Furthermore, you can buy, sell, and transfer cryptocurrencies across borders without traditional banking intermediaries, enabling worldwide financial access. Also, cryptocurrencies operate on decentralized networks, removing the need for central control and reducing the risk of single points of failure. Some cryptocurrencies aim to disrupt industries like finance, supply chain, and more, potentially offering solutions to existing problems.

Cons of Investing in Cryptocurrencies:

Extreme Volatility: Cryptocurrencies are known for their wild price swings. Sudden and significant value fluctuations can lead to substantial losses. The regulatory landscape for cryptocurrencies is still evolving, leading to uncertainties and potential legal challenges. Cryptocurrency regulations can change rapidly, affecting market dynamics and investor sentiments.

Complexity: Understanding blockchain technology and the intricacies of various cryptocurrencies requires a learning curve, deterring some potential investors. As there is no physical sense of cryptocurrencies and the infrastructure behind them, it can be a cumbersome task to understand how cryptos operate and how to start investing in crypto. Also, not many projects consider user experience to play such a vital role in using cryptos for daily payments or investment. The truth, however, is that user interface and experience are a deal breaker in modern-day crypto investing since most users don’t have the time or the knowledge to delve deeper into codes, hashes, blocks, validators, chains, and so on.

Security: Hacks, scams, and phishing attacks are prevalent in the crypto world. Poor security practices can result in the loss of your investments. Cryptocurrency markets can be manipulated due to their relatively small size and lack of regulation, leading to unfair practices. Some less popular or newer cryptocurrencies might lack liquidity, making it difficult to buy or sell large amounts without affecting the price. The value of many cryptocurrencies can be driven by speculation rather than tangible assets or cash flows, adding to the risk.

Despite the growth, cryptocurrencies are still not widely accepted for everyday transactions, investments, or savings, thus limiting their utility as a mainstream currency.

Investing in crypto with Givearn

Crypto is an exciting world, but it can be full of challenges. If you've ever thought about investing in crypto but found it too complicated, Givearn is here for you. We've designed our app to tackle some of the big issues that often scare people away from crypto. Here's how it works:

Simple Investment: With Givearn, investing in crypto is as easy as making a bank transfer or a payment with card. No more messing with complex trades or spending hours researching. We offer a diversified crypto portfolio for you. That's it!

Balanced Portfolio: We split your investment into two parts:

50% 'volatile' crypto like Bitcoin and Ethereum. These can change a lot in value.
50% 'stable' crypto (stablecoins), tied to the U.S. Dollar. These help reduce the risk of big market swings, making your investment steadier.

Steady Gains: Every Monday, you receive 0.1% crypto rewards that add up to 5.2% a year. Plus, your portfolio’s value might grow over time.

Safer Investing: By including stablecoins in your portfolio, your risk is cut in half. This helps protect your investment during those wild ups and downs in the crypto market.

User-Friendly App: Our app is designed to be easy and friendly. Everything is organized, so you don't have to be a tech wizard to start investing in crypto.

If you've ever wondered about investing in crypto but didn't know where to start, Givearn makes it simple and safe. Download our app and enjoy a more relaxed way to explore the world of cryptocurrencies, with incentives that make it even more attractive!

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Disclaimer and Risk Warning: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice. You should seek your own advice from appropriate professional advisors. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Givearn is not liable for any losses you may incur. For more information, see our Terms of Use.