How To Invest In Cryptocurrency 2022

 How To Invest In Cryptocurrency

1. Pick An Exchange

The first thing you want to do when you are investing in cryptocurrency is pick a reputable exchange. The exchange you choose is important because you want to ensure your account is safe and secure. The exchange is what you will be buying, selling, and possibly even storing your crypto in.

The good news is that cryptocurrency has been around for long enough for there to be exchanges that are deemed trustworthy. The biggest exchanges available are some of the most trusted and they provide a great user interface that's both secure and accessible. There are plenty that can be recommended, but here are some of the top options for any beginners out there.

- Crypto.com

This is easily one of the more popular exchanges available. It offers support for a lot of different cryptocurrencies. Also, for those looking for more security, it has a good staking program. 

- Coinbase

Coinbase is typically one of the first cryptocurrency exchanges you sign up for when you start getting into decentralized currency. It's one of the best and most beginner-friendly options available. They happen to be a publically traded company with the company using the ticker symbol "COIN." They have more than 73 million users currently. They have one of the best apps and user interfaces in the industry.

- eToro

eToro is one of the options that are good for those looking to invest in more than just cryptocurrencies. The good thing about eToro is the fact that you can invest in stocks and ETFs on the platform too. They have a very simple and easy-to-follow 1% fee structure for purchasing and selling crypto. They offer an easy-to-use platform and a simple formula to add crypto to your investment portfolio if you aren't looking to dive too deep into staking and more.

- Binance

Binance U.S strives to compete with Coinbase by offering lower fees and a robust selection of different cryptos. Also, they are adding more and more features by the day. Binance unfortunately has been under a lot of government scrutiny for potentially breaking regulations and more. While it's not necessarily something that should inherently turn you away from it, you do want to consider it when choosing.

2. Choose The Crypto You Want To Invest In

There are a multitude of different cryptocurrencies that you can invest in. Bitcoin might be the most famous and most popular, but it's not the only one you can put your money into. See how to buy XRP UK.

The majority of reputable exchanges offer a range of different cryptocurrencies that you can invest in. They will typically offer only reputable cryptocurrencies that you don't have to worry about being fly-by-night operations. They usually have a respectable market cap attached to them.

Here are a few of the options if you are aiming to invest in cryptocurrency right now:

- Bitcoin (BTC)

This is easily one of the best and biggest cryptocurrencies. It has the biggest market cap and it is known to be the "king" of crypto.

- Ethereum (ETH)

This is another popular crypto. It's currently second in popularity and market cap behind Bitcoin. Ethereum is known to have some of the best technology behind it. It also started smart contracts and has innovated more than a lot of the other cryptocurrencies available.

- Dogecoin (DOGE)

Dogecoin was started as a meme. It since exploded onto the scene because of the likes of Elon Musk. It was created in under 2 hours as a joke. Despite it being a meme, it has since generated a whopping $85 billion in market cap. This only goes to show how fast cryptocurrencies can gain steam and grow.

- Binance Coin (BNB)

This is a proprietary coin of Binance. It's currently the global leader in terms of users. It has become increasingly popular primarily because it's become widely accepted and it is commonly used to minimize fees associated with trading on Binance.

Which crypto should you invest in? 

This comes down to what your investment thesis is and what your investment horizon is. Are you looking for a quick trade or a long-term investment? The truth is, that cryptocurrencies are all volatile. If you are in for a short-term trade, you can expect to lose money more often than not. Try to research the technology backing each cryptocurrency. If you believe Ethereum is the future because of its smart contracts, it might be worth investing in over Bitcoin. Whereas, if you believe Bitcoin is the best store of value, it could take priority over a more transactional digital currency.

While a lot of traders read form 10-K's when they are going through and vetting companies, those interested in cryptocurrencies are likely reading white papers and seeing what the technology is all about.

3. Figure Out How Much To Invest

Not only do you need to figure out what crypto to buy, but you also need to figure out how much you are going to be investing in it. To put it simply, you want to try to diversify your portfolio. Because it's so volatile, it's best to keep it to a small percentage of your portfolio.

- 10%

If you are looking to invest in crypto, putting around 10% of your portfolio in it could be a good idea. That way you don't have to worry about losing your entire portfolio if crypto ever tanks. Also, it's enough for you to make a killing if it rockets.

- $100 Every Month

You could consider adding $100 every month if you have disposable income. Keep in mind, that you could lose it all.

A lot of experienced wealth advisors aren't necessarily enthusiastic about investing in crypto because it's so unpredictable and volatile. It's hard to build a future with such uncertainty.

Bottom Line:

Try to start with a small investment. Understand that you could be risking it all.

4. Store Your Private Keys In A Wallet

Once you do purchase crypto, you are going to want to ensure that you are storing your private keys securely in a wallet. You will find both hot and cold wallets online and offline. A hot wallet is something that allows you to access your crypto and trade it securely. The problem is, that hackers are getting much more sophisticated. This is why a lot of traders are instead storing their private keys in a cold wallet. This is typically either a USB or hard drive that they can keep physically with them or stored securely in a safe.

If you are only invested in small amounts of crypto, you may be more inclined to use a hot wallet. However, if you are getting into it heavily and you are investing a lot of money, it might be time to opt for cold storage or to open a crypto savings account that will pay you interest as you store it with them.

 How To Invest In Cryptocurrency 2022