Do you want to invest in Bitcoin but don't know how it works? Look no further because here is a guide for you to cryptocurrency.

Cryptocurrency markets are steadily building curiosity among many people across the world. Investing in cryptocurrency is risky but has excellent potential for making profits. The first cryptocurrency, Bitcoin, emerged in 2009, and it has gained tremendous popularity. However, since the invention of Bitcoin, other cryptocurrencies have been introduced, borrowing the same idea.

Cryptocurrency refers to any form of digital currency and uses cryptography to secure transactions. Bitcoin uses a decentralized system to issue new units and monitor transactions. Apart from Bitcoin, other cryptocurrencies are gaining popularity, such as Ethereum and Binance Coin. But before you venture into cryptocurrency, it is crucial to gain insights into how the digital currencies work before investing.

Bitcoin for Dummies: Guide to Cryptocurrency
Bitcoin for Dummies: Guide to Cryptocurrency Pixabay

Things to Know Before Investing in Cryptocurrency

Crypto is a lucrative investment, but new customers risk losing their funds if they get scammed or invest in a new currency without observing its track record. Here are some of the things you need to know before investing in cryptocurrency:

Watch out for Scammers

You may have heard a lot on social media about investment strategies that promise huge returns in crypto assets. Others exaggerate claims on how bitcoin will rise. Don't be fooled! There are some dishonest actors in the crypto markets, and many have lost to such Ponzi schemes. Before you invest in any platform, you need to conduct a thorough search to prove its credibility and it's a legit one.

Do your research

Research is everything when you are trying to find information. By conducting thorough research, you will acquire more knowledge and prove the investment opportunity. Do not jump into any investment before doing your homework.

Choose a good crypto exchange

Go for an exchange with high levels of liquidity, various crypto assets, resilient security measures, and reliability. As a beginner, choose an exchange that is beginner-friendly and to use. You will also need to look at the accepted payment methods and their regulations.

Create an investment strategy

For an investor to become successful, they must devise a plan for their assets. It may involve setting a limit order which means that your bitcoin will automatically sell when prices hit a certain point and cannot sell below that price. There are those exchange platforms that will allow you to borrow the moves of established traders. Instead of going through much trouble looking at the markets, you can turn to Yuan Pay Group that helps you monitor, analyze and evaluate the trading industry.

Safeguard your private keys

It is mandatory to keep your cryptocurrency safe which you can achieve by hiding your private keys. Invest in a wallet that cannot be easily tampered with and one that is convenient for you.

How to Invest in Cryptocurrency

If you decide to take the risk of investing in cryptocurrency, you might have questions about how you invest. Cryptos are a bit different from each other, but let's look at how you would start investing in Bitcoin:

  • Choose a cryptocurrency exchange: Select a crypto exchange you want to invest crypto with then you can create an account with them.
  • Start purchasing cryptocurrencies: Many exchanges will allow you to purchase using your debit card. You can choose between various coins such as Bitcoin and Ethereum. You don't have to buy the entire Bitcoin. Instead, you can buy a fraction of it, which is economical for a first-time investor.
  • Store your cryptocurrency: After purchasing the assets, you will store them in a virtual wallet that you received after opening an account with the exchange. This wallet will hold codes for all currencies you buy. There is a software wallet and a hardware wallet, and you can choose depending on the size of your crypto and what you intend to do with it.

Bottom Line

Cryptocurrency is a highly speculative market and comes with its risks. As a beginner who wants to venture into the market, it is essential to do thorough research to become vast with all the market information. To succeed in Bitcoin trading or investing, start small to reduce any losses and learn.