- Beginner's Guides
A Beginner's Guide to Making Money with Cryptocurrency
Everyone who delves into the field of cryptocurrency is looking to make money. However, not everyone ends up making money. People either give up on it or fall into the trap of a rising crypto scam. Truth be told, there are some foolproof methods, other than trading, with which you can earn legitimate money. Here's a guide for beginners trying to make it big in the world of crypto.
Principle # 1: Never use the money you can't afford to lose.
While some investments have low risks like bonds, others have high risks, like cryptocurrency. If you're starting to invest in Bitcoin or another cryptocurrency, you must start small.
Many people think that if they're investing in crypto, they'll have to purchase 1 Ether or 1 Bitcoin. That's not the case. You can also purchase a small fraction for as low as $10 or $100. Start small and get accustomed to how the market moves. Learn about the token economics that influence the shifts in value and slowly increase your investment.
Principle # 2: Line Up your values with the investment.
You should invest based on your interest and values sot that you can discover investment opportunities that align with your beliefs.
While many people may have been lucky enough to make money through random cryptocurrency investment, you don't have to have to follow in their footsteps.
Principle # 3: Core-Satellite Strategy
Core refers to a primary investment that can help in confidently fulfilling the financial goal. For instance, it can be an investment into the assets proven to offer returns for the past 100 years. You know that if you continue to invest in it, you'll get returns. Therefore, a significant chunk of your investment should go to the core.
Satellite refers to a one-time tactic investment that performs on its own. With the core, you may conduct a dollar-cost average and invest in it frequently for an extended period. For satellite, you can invest once and stop. Satellite investment can be an opportunity for you to gauge the market. It can be a new venture that you want to embark on. Therefore, if you're a newbie to cryptocurrency, you can invest in crypto as a satellite. It's crucial to know about your core and satellite in this so that you don't mess up.
After understanding the three basic principles, here's what you should do when it comes to buying cryptos.
Step 1: Research
You can begin by researching different cryptos. You should start investing in mature cryptocurrencies like Ethereum or Bitcoin. There are hundreds of cryptocurrencies out there, and you may get lost or trapped in the wrong ones.
The crypto market moves 10 to 20 times per day, fluctuating much more than stocks. If you have cryptos that move with the fluctuations in bitcoin prices, your portfolio will be hugely shifting every day.
Generally, it's safer to invest in the top 10 cryptos because they've stood the test of time and garnered a big community.
Step 2: Open an Account
There are a lot of crypto exchange accounts to choose from based on your location. You can check out Binance, Kraken, or Coinbase. Usually, bigger crypto exchanges have more staking options, cryptos, and liquidity than others. Therefore, you can sell and buy instantly with several investment options.
Step 3: Buy Cryptos
After setting up a crypto exchange account, you can buy the cryptocurrency. Please note that you don't have to purchase the whole coin. For instance, you can buy 0.000001 bitcoin as an initial investment. However, please note that you'll have to pay the transaction fee which isn't low when the crypto price is soaring.
Step 4: HODL
HODL is a misspelling of 'hold,' which refers to a buy and hold strategy in crypto trading jargon. You must keep your cryptos and watch them perform. The price may fluctuate every day. To practice holding, you must separate your judgment from the equity market.
Here's an illustration of why you must keep your judgment away from the equity market. A person invested in Bitcoin when one bitcoin was for $10,000. When the prices went up 20%, the person sold it. As he referred to the equity market, the 20% profit seemed very good. However, if he hadn’t sold out, he would've made a 500% profit today.
Are you interested in making money with Bitcoin? Stay up to date on Urban Crypto. Their beginners site for crypto news and industry info brings you all the latest updates so that you can successfully trade and earn from crypto. Check out their Ledger Crypto Starter Pack to get going.
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