In this guide, we will help you make your first move on cryptocurrency, what kind of cryptocurrency you should have in your portfolio, where to buy them, and how to tax them. Before we start, it is important this material is for educational and informational purposes. Let’s begin.
First and foremost, it is prudent to try your luck with cryptocurrency investment. However, there are many options and you are overwhelmed. You don’t know where to start. Well, this happens in any type of investment. When it comes to deciding the best asset to invest, it is always going to be a hard task. There are tons of things you need to put into consideration before you begin buying cryptocurrency.
Cryptocurrency being a new wave hitting the technology market, it can be quite confusing to learn where to buy them. Luckily, this guide makes it simple for you. You can begin by answering the following questions:
• Where do you find cryptocurrency?
• How to buy any type of cryptocurrency using USD, GBP, and EUR?
• What is the perfect way to purchase cryptocurrency?
• Can you use a credit card to buy cryptocurrency?
Cryptocurrency or virtual currency such as Bitcoin and Ethereum are the most popular coin to invest right now. They will supposedly become the first non-manipulative money in the world. Their advocates are promoting it and hoping that they will eventually substitute Euro, Dollar, and Pound in the future and create the pioneering free and hard world currency.
Investing in cryptocurrency like Bitcoin means that you play a role in this revolution. If Bitcoin replaces the currency of central banks or as people expect, it becomes dominant world currency for international trade, the value of 1 Bitcoin will be worth more than 20,000 Dollars. With that in mind, buying and holding cryptocurrency is a good bet. A bet on the success of this money revolution. Buying and HODLING cryptocurrency will be like having the security of a large ecosystem.
People who invested in cryptocurrency in the past have been very successful. That is due to the fact that since 2011, Bitcoin alone has seen an increase in its value of at least 25, 000 percent. Another type of cryptocurrency called Ethereum increased its value by 2,700 percent, making it the fastest rally a cryptocurrency ever displayed.
The market capitalization of all cryptocurrencies shot up from $18 billion at the start of 2017 to over $500 billion at the end of the same year. Although these currencies have seen a steep decline in the market capitalization, it is still worth over $200 billion. That is as of September 2018, translating to more than 10 times since the beginning of 2017.
Before you start investing, is it important to understand that these cryptocurrencies are not your everyday investments. Their volatility exceedingly exceeds that of other investments. Cryptocurrencies are unregulated and there is always the risk of them getting banned, or the exchanges getting hacked or even worse, you lose your cryptocurrency getting stolen. So, the best advice is: invest only what you can afford to lose.
What cryptocurrency should you buy?
Initially, the only crypto everybody knew was Bitcoin. Nevertheless, this has changed with an emergency of new cryptos like Ethereum and other altcoins. Indisputably, Bitcoin is still the must-have asset on any crypto portfolio but it should not be the only asset. You can check this link to help you put together your crypto portfolio. A well-balanced portfolio will always have the following coins:
It is a good strategy to focus only on the highest valued coins for your portfolio. Take your time and read everything about these coins before making a decision. Although they are all cryptocurrencies, they have various use cases based on their functionality. For example, coins like Dash, Monero, and Zcash focus on privacy. Some Cryptocurrencies like Ethereum and Ethereum Classic focuses on smart contracts, while some like Litecoin, focus on scaling payments.
How to Buy Cryptocurrencies
These days, there are numerous ways to buy cryptocurrency. Most valued cryptocurrencies are usually listed on multiple exchanges. You can use coinmarketcap to find these exchanges. For instance, for Bitcoin, you can use exchanges like Binance or Coinbase to buy Bitcoin. If you want to buy Bitcoins directly rather than from an exchange, you can do that using the following platforms:
If you are from Canada or the USA, the best platform is:
Buying other Cryptocurrencies
You can also buy other cryptocurrencies like Monero, Ethereum, and Litecoin on many major exchanges. Although this is not as straightforward as buying Bitcoin. First, you have to buy Bitcoin and then convert to your cryptocurrency of choice. You can do that using the following exchanges:
What is the best payment method when buying cryptocurrencies?
Before you start buying cryptocurrency, it is important to check your country’s regulations. If you consider the “best method” as the exchange having the lowest fee, then check out this here. I review the top 6 exchanges to buy Bitcoin with the lowest fee. All of these exchanges accept credit cards as a payment method. But, some exchanges also accept bank transfers and other altcoins as payment. Bank transfers usually have the lowest fee.
How to Store Cryptocurrencies
You can store your cryptocurrency using a cryptocurrency wallet. Most cryptocurrency wallets only support a handful of coins. But there are some wallets that support hundreds of coins. Check out this article where I show you how to have all your cryptocurrency in one place.
There are plenty of options to choose from when looking for a cryptocurrency wallet. Just like any other caution step you take with your real money, choose a crypto wallet that is secure. If your cryptocurrency gets stolen from your wallet, you can never get it back. These are the main three types of cryptocurrency wallets:
- Online wallets – the least secure
- Software wallets – comes in the form of an app that you can download. A bit safer than the online wallet.
- Hardware wallets – it is a portable device that you plug into your computer using USB. It is by far the safest option.
Investing in cryptocurrencies is just like other forms of investment you make. However, it is important that you speak to a financial analyst before making any major decision. Remember, always invest what you can afford to lose.