How To Invest In Cryptocurrency - A Beginner's Guide

By Yash Saraiya

Cryptocurrency is the next big thing in the space of digital asset investing. In India more than 10cr people are trading in crypto-market, according to the data of 'Broker Chooser'. Every investor is dreaming of a bright future in this new asset class, but most of them don't know the right direction. They fail to do quality research and draft a good strategy for achieving investment goals. Thus, for such investors here is a beginner's guide that will provide a navigation from start to end.

Frame An Investment Strategy

Mapping your investment ensures more security and payback for longer time. An individual should do micro research of the categories which he aimed for investment. Parameters of fundamental analysis like MACD (Moving average convergence divergence), RSI (Relative Strength Index), OBV (On-Balance Volume), Hash rates should be evaluated thoroughly. These numbers are easily available on the live blogs of exchanges or can also be calculated manually.

Another crucial thing is designing a trading portfolio which should be built around your own investment goals. For beginners it shouldn't be too diversified, which many people do to extract rapid rewards from their capital. It must have 2-3 top currencies for a backup/security because initially all have less wisdom of the market. At the initial stage, it is better to bet on triumph horses instead of dark one's. While planning out everything, have a deep clarity about the purpose of investment in cryptocurrency.

Choose The Best Trading Exchange

The crypto-world is free from any check/regularity, so while choosing a trading client you should be cautious about a few things. As crypto exchanges are under zero vigilance it becomes a hunting ground for cyber criminals. The security breach of 'Bitmart’ is the latest example, this platform lost $195million worth of assets in the cyber attack. Safety of an exchange can be gauged through various ways like how much asset it keeps in tangible or intangible form. Such as 'Coinbase' and ‘Binance’ claims that it stores 98% assets in the physical form (cold storage). Also, while opting an exchange, you should thoroughly inspect its background regarding any vulnerabilities of the past.

Usually, an exchange with a big client base can be considered trustworthy. A strict scrutiny of a client's profile can also be a good indicator, because fraudulent exchanges give relaxation in such processes to attract big customers.

Open Your Trading Account

After opting the right trading exchange, you have to enroll and open a trading account. Initially, the legal scrutiny and document verification will take place to know the customer (KYC). After completing the checks, your account will be handed over to you in all readiness for the business. Afterward, you should moat it with strong security keys (pins/passwords) to shield it from any theft.

Saving Your Cryptocurrency

After initiating the trade, the next step is to safely store the purchased assets. Digital purses like Hot, Cold and Paper wallets are the best alternatives to use for better safety. Hot wallets provide 24×7 connectivity to the internet and caters extensive storage capacity to the users. Cold storage also comes out as the premier option to protect your hard-earned holdings. Secondary storage devices like USB, Blu-ray drives, Pen drives, are the modes available for cold/offline repository.

Paper wallets are also utilized widely, they have encoded keys/barcodes of currencies that are used during the transition. Meanwhile, most people use wallets provided by their exchanges, but they are highly vulnerable to cyber attacks. The reason behind is exchanges mostly hoard their assets in digital safe, which have minimal security and high exposure.

Regular Eye On The Market

Crypto-market is of a vague and volatile nature, which's why it's crucial to keep a close eye on its all corners. Here, the currency that is flourishing today, may not be tomorrow's rewardee. Also a regular evaluation elevates your wisdom about the market and the stocks. Like other ventures, you can't sit back here and let the market do the rest, this space is a big exception in this regard.

Conclusion

As a beginner, you should be conscious of the fact that cryptocurrency is still in its infancy. The above guide will provide you a handhold assistance, but still you can't be complacent about this domain. If you wanna strike gold, then keep absorbing the nuances of crypto-market and be curious all the way. Also track your investments regularly to check their longevity and bet on the new one's for the future.