How to Invest in Cryptocurrencies - PART ONE: Exchanges...

2개월 전

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Now if you're reading this, this blog will probably sound like I'm preaching to the converted.... But for the few of you still out there that understand how the blockchain works and have been using #steem, but still don't fully understand how to invest in cryptocurrencies, please take a few minutes out of your busy schedules to read on...

The Crypto market has now stood the test of time and proven it is neither a bubble nor a fad, while we have yet to see Bitcoin and the majors reach the mighty heights of late 2017, interest has widened. Seasoned investors continue to cross over from the more mature asset classes and regulators have eased off on the Crypto assault that led to the 2018 slump.

With Bitcoin and the broader market sitting at around 50% below their all-time highs, there is still plenty of incentive to enter the crypto sphere. For many, however, the crypto market may seem like a maze. There are a tremendous number of exchanges and brokers and that is before considering regulations imposed by regulators in recent years.

Investing in cryptocurrencies requires a level of due diligence not too dissimilar to the research involved in other more mature asset classes, such as my favourites - gold and silver. The volatility and sizeable returns on offer have certainly allowed investors to dream. After all, Bitcoin has yielded a mass number of Bitcoin millionaires, more commonly known as whales.

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So, how do we invest in cryptocurrencies?

While there are multiple considerations, some are more important than others when looking to enter the crypto market. Just jumping in on a whim that the major coins will reach historical highs is a dangerous game. This is no dissimilar to jumping into the equity markets when they are sitting at record highs. There is one material difference, however. The regulatory landscape has materially changed since late 2017. For this very reason, investors may continue to face plenty of uncertainty before the market can find a return to the hay days.

Understanding the key drivers and market characteristics are therefore particularly important.

Basic Essentials

In this guide, you will learn the key preparations that you need in order to build your cryptocurrency portfolio. Before making any investment, deciding on the source of funds should certainly be your first priority.

In spite of the current interest rate environment, can I just recommended that you avoid funding the portfolio with debt.

Credit Card or Bank Account?? As an investors you will need to decide on cash or credit card. Also, as an investor, you can either fund your crypto trading account with a debit card or by funding with a bank transfer. It is worth noting, however, that certain countries have banned the funding of crypto exchanges with credit cards. Some banks have even taken this a step further and banned the transfer of fiat money to certain exchanges. Nonetheless, the simplest method to fund a crypto exchange account is with a credit/debit card. This does tend to come with higher fees and caps on daily transfer amounts.

Fiat to Bitcoin Exchange

First, you need to decide on which cryptocurrency or cryptocurrencies that you wish to trade. Please take your time when deciding... While there are many "get rich quick" sites out there that will spew literature on their favourite currency, usually because they have a vested interest, I ALWAYS suggest reading the #whitepaper to get a better understanding of what is on offer.

Secondly, you would then need to identify the exchanges that have the largest trading volumes for the chosen crypto currencies. One consideration here is your source of funds. Not all exchanges allow fiat money deposits. Plus a vast majority of exchanges restrict deposits to Bitcoin. Carrying out the necessary research on the most appropriate exchange is important. If you are looking for an exchange that accommodates the purchase of Bitcoin with fiat money: Coinbase is popular and easy to use, with a strong global presence. The exchange has the necessary security measures as well as delivering adequate liquidity for trading. When searching for the right exchange, it is also worth noting that each has its pros and cons. The important thing is to identify the exchange that, first and foremost, delivers on your personal requirements.

Other popular exchanges include:

Binance, LocalBitcoins, Bitfinex, Bittrex, Kraken, Changelly, Prime XBT, Coinmama.

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These crypto exchanges not only cater to Bitcoin investors and traders but most major altcoins in general. It’s also worth considering exchanges that offer a wider choice of cryptocurrencies and altcoins. This would allow you to diversify your investments and gain exposure to the broader crypto market.

Bitcoin to Crypto Exchange

The next exchanges that you should look into are the ones you will be using for the Altcoins. Many of the smaller coins, by market cap, are generally not supported by the larger exchanges. Generally speaking, the only way to buy those smaller coins is by buying them using Bitcoins or Ethereum.

On most exchanges, you need to deposit Bitcoins as you cannot buy coins directly from the exchange. This is why it’s crucial that you have a Fiat to Bitcoin Exchange first.

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Congratulations, if you've made it this far, then I pray you've enjoyed PART ONE. Hopefully you're all still awake and that this basic blog didn't bore you too much??

If this is well received, then I'll plan to cover WALLETS and INVESTMENT STRATEGIES in future posts.

With the world's economy going to hell in a handcrat, many countries fiat currencies on the brink of collapse, if you haven't started to invest in other assets, then NOW is definitely the time to get going...

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As for me... I wouldn't want to be invested in any Crypto's once U.S. Electronic Coinage is Activated...
October 13, 2020... 4.3 Hollywood Time...