Author: John Oladokun Opeyemi
John Oladokun Opeyemi is a Content Writer, Social Media Analyst and SEO strategist that loves helping brands and businesses achieve their objective via working digital solutions.
An Introduction to Cryptocurrency Investment Trading 2021
Cryptocurrency has come to stay, and several investors believe it will be the future of trading and investment worldwide. These digital coins that are not backed up by real assets or securities started out with Bitcoin’s introduction in 2009. However, since then, several other coin types have been produced into the crypto space. At the moment, there are thousands available for traders and investors within the industry. If you are looking to start cryptocurrency investment, then it is either because you are looking to make a massive gain from the crypto space. It could also be because you support the social vision of the different cryptocurrencies you want to invest in.
For some individuals, the reason behind their consideration of cryptocurrency investment is because they like the technology behind crypto. Whatever might be the case, it is important that you perfectly understand how the market works before opting to invest in crypto.
THINGS TO NOTE BEFORE INVESTING
ALLEVIATE FEAR
The first step to crypto investment is to remove fear from your heart as much as possible. Cryptocurrency investment is not for the faint-hearted. This is because of the several risks associated with investing in any cryptocurrency. Cryptocurrency investment involves serious risks because of the high volatility of the market. This implies that any cryptocurrency can experience a sudden bullish or bearish run at any time. The sudden price movement possibility is largely due to the fact that no government controls the market.
Hence, while investing in cryptocurrency, you should not be scared to take risks. However, you should also calculate your risk and try as much as possible to play safe when investing in any crypto. You can start out by investing a certain amount you can part with. This will help keep your morale steady in the case of any loss.
DO PROPER RESEARCH
Bitcoin was the cryptocurrency available in the space for only a short period; right now, there are several options to choose from. With this in mind, you need to spread your options across the board before investing in any cryptocurrency. This means that you need to do proper research on the available cryptocurrencies before choosing to invest. Often, the newer cryptos have the tendency of enjoying a sudden spike faster than the older ones. Finding the available coins you can invest in is not a problem. You can check out CoinMarketCap for the list of the available cryptocurrencies. The website lists the cryptocurrencies in order of decreasing market cap. This makes it easier to find what you are searching for and do your research around it.
Another important part of market research is to study the coin’s whitepaper before opting to invest with them. A whitepaper is a guide or report that outlines the technology behind a project as well as the utility potential of the project. The whitepaper will help you understand all you need to know about the coin as well as the utility it is offering to the ecosystem.
A whitepaper is important for every ICOs; however, some project inventors choose to neglect this when developing their coins. Once you realize the whitepaper is not detailed enough or easy to understand, it is best to steer clear of that currency. This is because the whitepaper talks about the coin and what it can offer to the crypto space. If, after reading the whitepaper, you still cannot make sense of the content, or understand its usage, then the currency is not worth your time and investment.
CHECK THE POTENTIAL VALUE
The reason behind the sudden growth of Ethereum in the crypto space is because of the value it brought to the market. Ethereum technology makes it possible for developers to build their dapps on the Blockchain. This attracted several investors and caused an increase in coin value.
Hence, before investing in any cryptocurrency, you should find out if it is solving any of the problems in the space. Every cryptocurrency should either be solving the problem of privacy, scalability, or interoperability. Once you find out that the coin you want to invest in solves either of these problems, then it might be safe to invest in them, provided other factors are also favorable.
FIND OUT THE TOKEN UTILITY
Any good cryptocurrency should need tokens. If you realize that the cryptocurrency does not need tokens, then the project might just be to raise money. Also, tokens are either meant to help investors get a certain amount of right in the ecosystem. The tokens could also be to help buyers and sellers to trade values within the system. Some tokens also help their holders to be able to use some functionalities of the system. Some other tokens can serve as a store of value or help in equitable profit distribution.
The token for the cryptocurrency you want to invest in should tick a couple of these uses. If that is not the case, and you cannot seem to figure out the functionality, then it is best not to invest in such. Checking out the token velocity can also go a long way in figuring out the value of the currency. The token velocity is the measure of how much people hold or sell off their currencies—the more time spent on holding, the lower the potential value of the coin. However, if most individuals are looking to sell it off or exchange it for Bitcoin or Ethereum, then the currency has a high-value potential. All of these will help you figure out which cryptocurrency to invest in.
CONCLUSION
A good coin presents itself as being transparent, and the development is obvious. You need to check the development rate as well as the community before investing in any coin. This will help you identify the level of authenticity of the coin. The last thing you want is to be a victim of a scam; hence proper research is important to avoid this.
Following all the steps highlighted above will help you understand the crypto space better. This will prompt you to better judge when deciding on the cryptocurrency to invest in and make many gains in the long run.
ABOUT THE WRITER
I am John Oladokun Opeyemi. Follow me on Facebook, Twitter, Instagram to access several updates on Business, Work, Marketing, Freelancing, and How to Build a Reputable/Profitable Brand or Business on the Internet.
About Me
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I am John Oladokun Opeyemi. A Content Writer, Social Media Analyst and SEO Strategist. I love helping brands and businesses achieve their objective via working digital solutions. Welcome to my Space.
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