The usual and least requirements to be able to start as a digital investor are: an account on a cryptocurrency exchange site, a payment method, a secure internet connection, a digital wallet, and, of course, your personal identification documents. Take your time and continue reading to learn more about what you need to invest in cryptocurrency.
More recently, it is possible to trade Bitcoin at specialized ATMs. Accepted payment methods to buy cryptocurrency are debit or credit cards but also payments using Internet Banking from your bank accounts.
Privacy and Security are very important for digital currency investors.
Courage: When you start you know that you are putting money into something new and you are afraid of losing it. It is good to know that this digital money does not enjoy the same protection as when you use normal money.
Luck: The evolution of prices is not 100% predictable or something you can influence. You can’t know the future so it’s clear that you need plenty of luck.
The connection between blockchain and cryptocurrencies
Blockchain is a great technology that allows us as investors to make money. Who says he keeps money in crypto strictly for technology, he’s kidding.
Virtual currencies would not have appeared if blockchain had not appeared and blockchain would not have worked if there were no cryptocurrencies.
Blockchain and cryptocurrencies are interdependent. Blockchain is the technology and cryptocurrencies are the rewards for those who actively participate in the blockchain.
Even if they accept and encourage technology, banks feel threatened by the existence of cryptocurrencies. People transfer money to each other without the need for banks and without paying fees.
Is it risky to invest in cryptocurrency?
Yes, this type of business is risky. The general rule is: do not invest what you cannot afford to lose. Investing in cryptocurrency is highly risky and speculative.
Lowering the price of some cryptocurrencies is part of everyday life, it is something normal. Most people are very stressed when the price drops.
If the price of a cryptocurrency in your portfolio drops, it means that you will lose money, but if you allow yourself to lose that money, this will not affect you (mentally) at all.
On the other hand, the drop in price can be a good sign to buy even more cryptocurrency at a better price, because then, when the price recovers, you will realize that you have made a very good investment and you will be in profit.
We must also consider the fact that scammers ask people to pay with cryptocurrency because they know that such payments are usually irreversible.
How to Invest in Bitcoin
The most obvious cryptocurrency to buy for 2020 is Bitcoin (followed by Etherum, NEO, EOS, and Ripple).
Generally, you can buy Bitcoin or other cryptocurrencies using a debit or credit card but in some cases can be obtained through a process called mining. The normal money we are used to (coins or banknotes) is being replaced by this digital money. Do not confuse it with internet banking and the money you see online at the bank in your account.
Bitcoins (cryptocurrencies in general) are not issued by a central bank or government system.
The cryptocurrency is stored in a digital wallet that is online, on your computer, or on another device. It can be purchased as we purchase any other products or services.
Basically, we invest in a different kind of money, a digital asset. You can buy Bitcoin with Faster Payments.
Benefits of Paying with Bitcoin:
- Peer-to-peer focus
- No banking fees
- User autonomy
- Mobile payments
- Low transaction fees for international payments
Is it a good idea to invest in?
Investments are generally good, but it depends on what you invest in and how lucky you are. If we consider the benefits of paying with Bitcoin, we notice that we have some important advantages.
Let’s study the possibility of price evolution.
For example, today 27.05.2020, a Bitcoin costs £7.415. For someone who bought Bitcoin in March 2020 at a price of 4.141 pounds, we could say that it is an extraordinarily good idea to invest in cryptocurrency.
Those who bought then and sell today, have a profit of 3.274 GBP / Bitcoin.
On the other hand, those who bought this cryptocurrency in June 2019 (when the price was 10.200 GBP) and want to sell today will have a loss of 2.785 GBP / Bitcoin.
Investors in June 2019 will be able to say that it is a good idea to invest in cryptocurrency only when the Bitcoin price will be higher than 10.200 GBP. At this point in time, it was not a good idea for them to invest in bitcoin.
The best currency to invest in now
As of April 2020, there are approximately 5,392 cryptocurrencies being traded … how to choose the best one to invest in?
By market capitalization, here are the top 10:
- Bitcoin (BTC) $137bn
- Ethereum (ETH) $18.7bn
- Tether (USDT) $7.2bn
- XRP (XRP) $7.1bn
- Bitcoin Cash (BCH) $3.5bn
- Bitcoin SV (BSV) $2.8bn
- Litecoin (LTC) $2.3bn
- Binance Coin (BNB) $2.1bn
- EOS (EOS) $1.9bn
- Tezos (XTZ) $1.6bn
With huge potential in 2020, here are the top 10 Cheap cryptocurrencies:
- 1. QuantStamp (QSP) £0.0087
- 2. IOTA (MIOTA) £0.16
- 3. Ardor (ARDR) £0.0371
- 4. Nem (XEM) £0.0333
- 5. Ravencoin (RVN) £0.0166
- 6. Stellar Lumens (XLM) £0.0538
- 7. Cardano (ADA) £0.0449
- 8. BitTorrent (BTT) £0.000230
- 9. Pundi X (NPXS) £0.000115
- 10. Ontology (ONT) £0.41
Hoping that their price will increase a lot in the future, they represent the desired type of cryptocurrency in which to invest.
Surprisingly, inside this crazy world, we can find Stable Coins:
- Tether (USDT)
- TrueUSD (TUSD)
- MakerDAO (DAI)
- Paxos Standard (PAX)
- Gemini Dollar (GUSD)
- USD Coin (USDC)
With the purpose of benefiting the users with low cost and high-speed transactions, they are not affected by market volatility. Some experts believe that eventually the Stable Coins can be used for loans and remittances or wire transfers.
Here are just a few good reasons to invest in cryptocurrency:
- your desire to multiply some money
- fast payments
- lack of commissions
- no account maintenance or minimum balance fees
- lack of intermediary (bank or government)
- more autonomy over your own money
- your purchases are never associated with your personal identity
- to complete a transaction, no personal information is required.