If you are already an investor of Bitcoin or just a newbie who wanted to start investing in cryptocurrency, then you came to the right page.
Cryptocurrency seems to be a very complicated investment. Given its risks, managing your digital assets and investments is not an easy task. But before you think about investing, the first thing you must have knowledge of is choosing the right cryptocurrency where you can fully entrust your money. Experts at trading platforms like IMMEDIATE EDGE can lend a hand.
Bitcoin is known to be the first and original cryptocurrency. It was invented in 2008 and was launched in January 2009. Ethereum, the second-largest cryptocurrency, followed its footsteps in 2015. So when it comes to recommendations, these two might be the best choice for investors. However, the sad truth is that they may not be suitable for beginners or for small-time investors as they may require a huge sum of investment. So individual investors often rely on other alternative coins.
What are alternative coins?
Basically, alternative coins are cryptocurrencies that are not Bitcoin. Since it is considered the original and first cryptocurrency ever created, any other crypto after Bitcoin will be tagged as alternative coins. They often consider themselves as better alternatives or have greater features as compared to Bitcoin. Forty percent of cryptocurrencies in the market are made up of altcoins.
Understanding is the key to success in terms of investment. Here are some things to consider before investing in alternative coins.
How much money should I invest?
This is one of the most important questions you must ask yourself. When making an investment, make sure that you do not invest more than you could afford to lose and that you will not put yourself in a difficult financial situation.
How much you will invest will always depend on how many returns you are looking to get back.
Risk Tolerance. Compared to Bitcoin that has already established itself in the digital market, alternative coins are considered riskier. Some of them are just new, so expect a higher volatility rate. In addition, the amount of your investment should always have a correlation with your risk tolerance. While some were able to succeed in making high returns, others lost more than they expected. It is always important to do a background check of the alternative coins you want to invest in, as some of them are more volatile than others.
You are storing your digital assets. As for digital currency wallets, there are numerous available options in the play store app.
Of course, you should have one too. Digital wallets are essential in keeping or storing your cryptocurrency assets. You can also use these wallets in crypto exchanges. There are two types of digital wallets: hot wallets and cold wallets. Hot wallets are those that can be accessed online via your internet connection. On the other hand, cold wallets are often accessible without using the internet connection, which can be in the form of a hard drive or USB drive. It is necessary to find the wallet that is appropriate for your crypto.
Where can I buy digital currency? The market offers different options and various places to buy your cryptocurrency. One way is through a trading platform or online exchange. These exchanges allow buying and selling cryptocurrencies at reasonable rates. They also require personal information as a way of confirming your identity in order for you to comply with legal obligations.
You can also purchase vouchers that are redeemable with several exchanges.
The group or community behind the altcoins. With over 10,000 alternative coins out there, how will you check the ones with the greatest potential? Simple. Research from communities like social media platforms like Twitter, Reddit etc. You can ask questions from experts in order to better understand the asset.
Compare your different researches as a single community can be devoted to one coin, and they may have some bias about them.
Other things to consider are the technology behind the crypto. You must also check the motive of the creation of crypto in order to find one that is suitable for you.