The word “cryptocurrency” may sound scary, but it’s basically just virtual money. You can purchase things and receive payments with it, as well as treat it like an investment, as its value changes rapidly. Here’s a more in in-depth view.
I can’t fully explain cryptocurrency, but that hasn’t stopped me from hopping on the crypto-train while it’s still moving. Recently, I found a very simple and safe way to purchase bitcoin (the most well-known cryptocurrency) through an app I had called SquareCash. Here’s some info.
What I’m here to talk about, though, is how people like me and you—who may not be well versed in the world of virtual funds, and investing in general—can become comfortable with the risks involved. Here are my dos and don’ts for beginners.
Do Your Research
A lot of experts think investing in cryptocurrencies is risky. While that is true, you can say the same thing about any investment. You never really know until you do your research.
For cryptocurrencies, find the types of coins that you wouldn’t mind investing into, buying, or selling—there are more than a thousand out there. You can watch several tutorials on YouTube and read write ups online. It’s all about equipping yourself with the necessary information.
For me, I felt comfortable with bitcoin because the app offered a safe and secure way to invest. Also, since bitcoin is the oldest and largest option around, I wasn’t worried about my money disappearing overnight.
Don’t Overextend Yourself
I think the most important strategy is to never invest more than you can manage without. If you invest $100 and realize that you will need that money in your immediate future (like for rent), then that in itself is too risky.
Investments take time to grow. You can’t expect an 80% turnaround in a few days—investing isn’t a get-rich-quick scheme. Instead, use money that you don’t immediately need.
I’ve had my bitcoin purchase for about a month now. I don’t check it every day, just when I remember. That’s because the whole point of the investment is to let it sit there and hopefully grow.
Do Start Small
The more you invest, the more you stand to gain. However, there’s nothing wrong with investing small amounts of money—you don’t have to invest hundreds of dollars at once.
To see what would happen, I invested just $5 in bitcoin. That’s a fraction of a single coin, which cost more than $6,750 apiece as of this writing (their value was as high as $19,000 apiece late last year). I’ve seen my investment rise and fall. I only have $3.87 as of this writing, but it’s been worth as much as $7 as well.
Because I invested a small amount, I’m not too bothered by the shifting value. I’m now considering investing more, and the prospect of making some actual money (because it has happened) keeps me motivated!