Cryptocurrency investing for dummies
Investing in cryptocurrencies, in essence, is no different from stocks. By buying at a lower price, we predict an increase in price over time for subsequent profit-taking (selling). This seems quite simple, but there are many both positive and negative factors in the cryptocurrency market that you should be aware of.
What important factors should you consider when choosing a cryptocurrency exchange?
Choosing a cryptocurrency is a fundamental moment for investing. First of all, you need to analyze how trustworthy and reliable a particular cryptocurrency project is. There are several factors that may indicate this.
Presence on a popular cryptocurrency exchange
- If the coin you like is added, or will be added to an exchange like Binance, you can be sure that it is a verified cryptocurrency, with a large team of developers who will develop and improve the project. Such large exchanges value their reputation and will not risk adding something unclear.
Presence on popular decentralized exchanges
- The main difference between exchanges in the conventional sense and decentralized exchanges lies in the absence of intermediaries. With their help, it is easiest to make money on new cryptocurrencies that are not yet so popular. Of course, this is much more dangerous, but if you invest in the right cryptocurrency, and it gets listed for example on Binance, you will get a multiple profit.
- The most popular representatives of peer-to-peer exchanges are: Uniswap, Pancakeswap, Curve, DODO. If you found a coin, and it is present on one of these sites, it gives you a reason to doubt your decision a little less.
Where can you find information about cryptocurrencies?
To analyze or find a promising coin, you can use various websites with ratings, cost, and other information about cryptocurrency.
We personally like the functionality of CoinGecko the most, using which we will show how to analyze the available information. In turn, you can use CoinMarketCap and other similar sites.
When you go to the cryptocurrency page, the first thing you should check is where the coin is traded. If the information is not available, then as a beginner you don’t need to risk and try to figure out unknown exchanges to get the desired coin. Often this is a scam that collects investments and then disappears.
The second thing to pay attention to is the official website. You need to understand whether it is a dummy or if this project is a serious startup.
Check their social networks and see how actively they are managed.
Popular coins or listings?
With the development of cryptocurrencies, potential investors have the opportunity to independently choose options for investments, among which are:
- Buying large capitalization cryptocurrencies like Bitcoin and Ethereum at a low price and waiting for their value to increase;
- Making small investments in promising coins and waiting for their appearance on large exchanges;
- Participating in listings on popular exchanges and selling coins after the ban is lifted.
Each option has its own pros and cons. If the first one does not require any further actions from you after acquiring cryptocurrency, then the others need quick reaction and constant monitoring.
What suits you more is for you to decide, but it’s worth noting that you can simplify the process of investing in cryptocurrencies using automatic investment platforms, which independently find promising coins, earn on the exchange rate difference, and are simply more convenient for ordinary users. One of such platforms is BITCOIN LOOPHOLE PRO, which may be more practical for you than exchanges.