How To Choose The Right One For Cryptocurrency
CRYPTOCURRENCY: — A cryptocurrency is an encrypted data string that denotes a unit of currency. It is monitored and organized by a peer- to –peer network called a block chain, which also serves as a secure ledger of transaction. E.G:- buying and selling and transferring cryptocurrencies are created and secured through cryptographic algorithms that are maintained where a network of computers or specialized hardware such as application-specific integrated circuits [ASICS] process and validate the transactions.
WHAT ARE CRYPTO EXCHANGE TRADED PRODUCTS?
While exchange traded products [ETPs] have existed for 30 years the financial crisis of 2008 and subsequent demand for increasing transparency caught the attention of many investors. As a result, according to ETFGI, global assets invested in ETPs increased to more than $6.35 trillion by the beginning of 2020 Exchange trader funds ETFs account for 97% of this figure.
IMPORTANT FACTORS RELATED TO CRYPTOCURRENCY:-
- Market capitalization. Ranking cryptocurrencies based on market capitalization is one way of selecting them for investment. …
- Total coins to be mined and current supply. Look at whether there is going to be a limited supply of a particular cryptocurrency.
- White paper.
- Use cases.
LEARN HOW TO EDUCATE YOURSELF ABOUT CRPTOCURRENCY:-
One struggle with cryptocurrencies is that the arena is full form of information and potential scams. It’s important to educate yourself but also to understand how to educate yourself about cryptocurrencies .For Example:- many websites will purport to give you valuable information, but really they exist only as a front to lure you into buying a cryptocurrency trading products that they are developing.
One way to avoid this problem is by gathering information only from trusted sources. Below, we have compiled a list of some websites that we think provide the best information when it comes to cryptocurrencies:-
- INVESTOPEDIA:- A great resource for general information, such as defining what cryptocurrencies are and other terminology.
- COINMARKET.COM :- This website is useful because ir provides an unbiased look into how various coins are performing in the market
- COINBASE.COM:- Coin base is on of the largest cryptocurrency exchanges in the United States.
- YOU TUBE: — believe it or not, you tube is a great resource. Many individuals upload videos detailing and explaining cryptocurrencies and potential new investment opportunities.
- WIKIPEDIA: — Wikipedia is also an excellent source of information especially when learning about crypto vocabulary.
IMPORTANT STEPS TO CHOOSE RIGHT ONE FOR CRYPTOCURRENCY:-
Step 1: Understand and allocate the investment; — Before making any investment, and choose an investor must understand the asset class and the need for investment in that asset class. One must comprehend that the crypto market is highly volatile
And only a small percentage of the portfolio shall be allocated to such risky avenues of investment for trading platforms in Xtreamforex market.
Industry experts suggest that as a thumb rule, an investor should not invest more than 5–10 percent of the portfolio in digital tokens. Cryptocurrency investment is similar to investing in stocks, but not the same. Investors must learn that cryptocurrency is a medium of exchange.
Many cryptocurrencies that have come on the market in the past decade have either flat lined or disappeared altogether. That means any investment you make could go all the way to zero.
Step 2: Choose the Cryptocurrency: — It is the biggest challenge for any crypto investor. One must have heard about just a few top names like Bitcoin, Ethereum, Dogecoin, and a few more. Surprisingly, there are over 5,300 digital tokens available in the universe of digital tokens. It makes the choice more complex.
The story of cryptocurrency is just a decade old. Bitcoin is the most traded one, given its volume and value. For many investors, it is almost synonymous with ‘cryptocurrency’. However, many other cryptocurrencies have performed much better than the largest one.
Step 3: Choose the Platform to buy: — Bank and investment brokerage firms do not offer to buy cryptocurrencies. These digital tokens can only be purchased from dedicated cryptocurrency exchanges. All the people trading in the most popular cryptos, and of course, you should expect to pay a fee for both buying and selling for trading products.
One can buy cryptocurrency either directly from the exchange or another peer who is selling his/her current holding. However, investors must understand that cryptocurrency trading is entirely anonymous.
Step 4: Store your Cryptocurrency: — Cryptocurrencies are stored in crypto wallets, which are either hot or cold, wallets. The hot wallets are connected to the internet, and the cold ones are not. It is a bit complicated and peculiar process. This wallet is not a physical wallet but a software program specially designed to store cryptocurrencies.
It stores the private and public keys that connect the user to the blockchain where one’s cryptocurrencies exist. They do not store the cryptocurrencies as such, but they help you access cryptocurrencies on the blockchain with public and private keys. A user need both to complete the transaction. They’re called ‘keys’ as they unlock the cryptocurrencies on the blockchain in Xtreamforex business.
There are multiple digital wallets like Desktop Wallets, Online Wallets, Mobile Wallets, and Hardware Wallets. One should choose the wallet based upon the balance between security and convenience. Some exchanges offer digital wallets to users.
Step 5: Hold and Sell to book profit: — Cryptocurrencies trading platform are a long-term play, with their fundamentals and the communities they serve. Their usage is separate and much beyond the access we are aware of so far. Thus, one should not treat them as a get-rich-quick scheme. Investors buying crypto should have their investment horizon and book profits periodically.
Also, one should know that the crypto market is very nascent in comparison to other avenues of investment. So, new tokens will enter the markets, create the buzz, and euphoria will fizzle out. Thus, investors should be aware of such trickster schemes. Book your profits on time.
