Every year more and more people become interested in cryptocurrencies and invest in them. The reason is that today such tokens can be used even for online shopping and depositing to a live dealer casino Canada. What is electronic money, how can a novice investor understand the intricacies of its operation and what pitfalls can he encounter?
Where to start, which cryptocurrencies to buy, where to buy them – these and many other questions any beginner starts to ask himself.
There are plenty of successful examples of investments. Take BTC – in 2010, 5 thousand Bitcoins is barely enough to buy a pizza with mushrooms, but today its rate is already thousands of dollars.
It’s worth noting right away that the main way to make money from cryptocurrency is speculation. You buy crypto when its value declines and sell it when it rises – in theory, everything is simple enough. But problems begin to arise when you try to analyze these same declines and rises.
A separate question is the choice of tokens for investments. There are a huge number of tokens on the market, and each has its own advantages and disadvantages.
The exchange rate of most digital money depends on the demand for Bitcoin, because it occupies a large part of the market. For example, in second place comes Vitalik Buterin’s equally promising invention, Ethereum. This coin occupies less than 20% of the market.
Many coins are protected from inflation because they have a limited issuance. For example, bitcoin – the most popular cryptocurrency – can not exist more than 21 million units at the moment.
To invest your money, you need an investment plan. You have to decide for yourself how quickly you want and can benefit.
Besides, a novice crypto investor should be ready to lose money, so it’s worth investing only free funds, and also constantly monitor the news of the world of cryptocurrencies.
If you don’t want to throw your money away, you should start with a thorough analysis of the crypto market. Everything is the same as in ordinary trading – you apply fundamental and technical analysis.
This method is often used for analyzing a certain kind of kinoin, in order to find out how reliable it is, what possibilities and prospects it has, as well as how many people use it.
For example, if you want to invest in new promising crypto projects, you need to start by evaluating several factors:
When researching a particular currency try to collect as much information about it as possible from various sources and, if possible, ask the opinion of real people who have dealt with it. This way you minimize the risk of running into a fraudulent scheme.
You can use technical analysis to study electronic currency quotes at different time intervals. Most of the value prediction techniques are applicable to stable markets that have been around for over 10 years. Since the cryptocurrency market is relatively “fresh” and has high volatility, most of the technical analysis techniques are not suitable in this case.
So, focus on the fundamental part of the analysis to understand more clearly what you are investing in. But it’s still necessary to follow the quotes during the day.
Also, when investing in a particular cryptocurrency, don’t forget to follow the news. For example, if your coin has been added to a new popular exchange or a famous person has spoken about it.
it’s a good sign and you can expect an increase in quotes.
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