How To Pick The Right Cryptocurrency For You
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As cryptocurrencies grow more and more popular, many new investors want to know what the best cryptocurrency to invest in is. Are you one of these new investors? If so, then there are some important things you should know.
You’ll need to know how to choose the right cryptocurrency for you, and that this guide is intended on showing you long-term investing strategies, NOT active trading.
Take Calculated Risks
“Cryptocurrencies are not a normal investment,” says Henry Cherry, a business blogger at OXEssays and Boomessays. “In other words, it’s not like investing in a car or a house. Plus, your country may or may not accept cryptocurrency trading and exchange. So, if cryptocurrencies are outlawed in your country, don’t liquidate your crypto assets. Only risk as much money as you can afford. And, always educate yourself on what your country’s rules are for cryptocurrencies.”
Know Your Risk Level
As of today, there are almost 1,800 different cryptocurrencies, with bitcoin (BTC) being the most stable and safest one to date. Other coins (called “altcoins”) are okay too, but the most stable ones tend to be Ethereum (ETH), Litecoin (LTC), and Ripple (XRP).
You can start by diversifying your investments, so that you may choose one of more established digital currencies to anchor your investment portfolio. Or, you can invest in “stablecoins,” which are a great way to hold money between trades, or put it into a crypto exchange; and, they keep price fluctuations to a minimum.
Many company representatives and pro cryptocurrency investors will tell you their success stories on how they did it, and why you should consider investing in it too. However, at the end of the day, it doesn’t hurt to do plenty of independent research.
When you research, look at all the historical charts on the cryptocurrency that you’re interested in. Focus closely on market cap and circulation, so that you don’t get distracted on the price alone. As you look at stability and understand the full history of a particular altcoin, pay attention to significant growths and any drops that have occurred. If you see consistent drops (big drops, especially), then stay as far away from that kind of cryptocurrency as possible – chances are, there’s no demand for it, and it’s as dead as a doornail.
Also, make sure that the altcoin that you’re interested in is doing a world of good. Good offerings with innovative technology is always a good sign that it’s worth investing in. Finally, learn about company leadership, the CEO’s track record, and whether or not there’s a solid technical team.
Time Your Trades By Crucial Dates
When you follow company feeds on Twitter, official websites, or blogs, you’ll most likely learn of important dates before anyone else. Therefore, this can be great opportunities to you’re your trades based on when partnership announcements, project milestones, and other critical dates happen. This strategy requires that you fully engage in your selected cryptocurrency; so, if there’s something like a price jump around these dates, and if you know about it in advance, you’ll be already anticipating it. Be ready to acquire coins once you hear such news.
Know And Monitor Your Portfolio
“Only you know your portfolio and assets,” says Natasha Hopkins, a journalist at Law Writing Service and Paperfellows. “So, as an investor, make it your job to pay attention to the political climate and regulatory shifts, or else you’ll risk having big losses for not making sure that your portfolio and assets are in check. The price of crypto is affected by laws regarding cryptocurrency, based on the jurisdictions that you abide by. No matter which cryptocurrency you decide to invest in, make sure you’re up-to-date on any news regarding your investments. In this way, you’ll be ready to sell when needed, or know when it’s best to grow your position.”
Choosing altcoins to invest in is not as easy a task as most investors tend to tell you. However, if you stay cool and stick to this useful information, you’ll be sure to pick the cryptocurrency that’s right for you. Just keep in mind: you won’t see astronomical growth overnight; but with the right knowledge, mindset, and enough awareness, you’ll get the hang of this kind of investment. So, don’t be afraid to get out there and invest in cryptocurrency today!