As investing in cryptocurrencies becomes more and more popular, you may be wondering where and how to start investing in cryptocurrencies and whether it is a good idea. This guide will teach you how to start investing in cryptocurrency.
What is Cryptocurrency?
Cryptocurrency is a cryptographically secured virtual currency, making it nearly impossible to counterfeit or modify. Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers.
One distinguishing feature of cryptocurrencies is that they are generally not issued by any central authority, making them theoretically immune to government interference or manipulation. So it is completely based on the market, which the market can monitor and analyze.
How Does Cryptocurrency Work?
Cryptocurrencies are digital or virtual currencies underpinned by cryptographic systems. They allow secure online payments without the use of third-party intermediaries. “Crypto” refers to the various encryption algorithms and encryption techniques that protect these entries, such as elliptic curve encryption, public-private key pairs, and hash functions.
Cryptocurrencies can be mined or purchased from cryptocurrency exchanges. Not all e-commerce sites allow cryptocurrency purchases. In fact, cryptocurrencies, even popular ones like Bitcoin, are hardly used for retail transactions. However, the skyrocketing value of cryptocurrencies has made them popular as trading tools. To a limited extent, they are also used to transfer money across borders.
Investing in Cryptocurrency for Beginners
When it comes to investing in cryptocurrencies, there are many directions to choose from. To start investing in cryptocurrencies, one must first have a clear understanding of the risks and laws in order to make the right decision. Next we will start with the basics.
How to Start Investing in Crypto
- Create an account Olymptrade Platform: To invest in cryptocurrencies, you need to open an account on cryptocurrency exchange. To open an account with a cryptocurrency broker, you need to provide personally identifiable information such as your address, date of birth, official state-issued identification, and email address, as well as the following requirements: about Know Your Customer (KYC).
- Deposit money to broker: Once you have signed up with an exchange, you will need to fund your account by connecting your bank account. The majority of cryptocurrency brokers or exchanges accept debit cards and wire transfers.
- Training and trade: In the cryptocurrency market, there are many currency options for trading. However, you must understand how crypto work.
- Buy and Sell: You can use the Olymp Trade platform or the Virtual Currency Exchange unit to place an order. If you want to buy crypto, go to “buy”, select the order type, enter the amount of coins you want to buy and confirm the order. The “sell” order follows the same process.
- Store your crypto in a wallet: Once you have acquired a unit of crypto, it will be added to the wallet received when you registered an account on an exchange or brokerage platform. The wallet will store all your crypto tokens.
Must know about Cryptocurrency
- Capital Gains Tax: In many countries, cryptocurrencies are considered assets, similar to stocks or real estate. If you make a profit from the sale of cryptocurrencies, you will have to pay taxes. Keep this in mind when planning your annual budget and preparing for taxes.
- Short Term Investing: Because cryptocurrency is such a volatile asset, many investors view it as a short term rather than long term investment. Crypto will likely become a solid investment in the future, with long term ownership yielding considerable profits. However, that is a huge “maybe.”
- Keep an emergency fund for backup: Cryptocurrencies are extremely volatile. Prices fluctuate considerably. Investors should set up an emergency fund before investing in assets to cover unexpected costs. Before purchasing any cryptocurrency, ensure you have enough cash saved in case an emergency occurs. You can be compelled to sell all of your assets at a loss if you don’t have a backup.
- Before taking any action, do your own research (DYOR): Spend some time researching projects before you start investing in cryptocurrency to see if they have viability and are something you are interested in holding as an investment.
Where to Invest in Cryptocurrency
There are more than 100 online brokers or exchanges where you can invest in cryptocurrencies. However, not all of them are reliable, which is why Olymp Trade is a great broker to choose from. Olymp Trade offers Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Basic Alt Index, all of which are available on Olymp Trade as underlying assets. Because Olymp Trade never makes you hold your crypto assets, there is less risk while you can still profit from the volatile crypto market.
In addition, you can deposit and withdraw from your Olymp Trade (OT) account using both Tether (USDT) and BTC for added flexibility and access to other great markets other than cryptocurrencies like stocks, forex and commodities. All these features without the need to manage multiple brokerage accounts in different currencies.