Increasing the capital. The best way to invest in cryptocurrency
Digital currencies offer tremendous opportunities for future investors. But for effective and efficient activity on the cryptocurrency market, one has to have certain knowledge and specialized skills, which often scares beginners.
Which way of investing in cryptocurrency should you choose to be completely safe? Let’s look at several strategies.
Buy & Hold
The simplest and safest way to invest in cryptocurrency in 2018 is to buy promising coins and wait for their value to grow. The strategy is also called Buy & Hold.
It is considered to be the most effective way for those who are interested in long-term investments.
How does this way of investing in cryptocurrency work?
- First, you need to select a digital coin for purchasing. Beginners should choose currencies with the largest capitalization. As a rule, such coins are reliable and have good profit indicators. You can see cryptocurrency rates on special websites; one of the most popular resources is CoinMarketCap.
- Virtual currencies are acquired on cryptocurrency exchanges or regular exchangers.
- After buying the cryptocurrency, you should put it on your e-wallet. Do not leave the purchased currency on the stock exchange, because if the trading platform has any problems, customers can lose their funds.
Income on the investment comes after a year or two. Also, note that during this period, rate of the acquired cryptocurrency can change many times - for both good and bad. Either way, investor shouldn’t constantly monitor the rate, especially if the investment period has been determined in advance.
Trading on the exchange
This method involves actively concluding transactions, each of which can take from few seconds to several weeks. Market movements are used to generate income.
The key advantage of cryptocurrency trading among other ways of investing is the possibility of receiving revenue regularly. A professional trader trades with a positive balance regardless of growth or decline in the exchange rate.
At the same time, cryptocurrency trading involves deep knowledge of exchange processes and the need for impressive experience. Beginners, who trade with large deposits from the start, often lose their capital due to a lack of practice. To effectively trade on an exchange, you need to not only know technical analysis in theory, but also be able to properly use it. Cryptocurrency trading is a rather complex way of investing in cryptocurrency; it requires continuous practice and good market orientation.
Investing in ICO
ICO is the most unpredictable way of investing. But first, let's clarify what is ICO.
ICO stands for Initial Coin Offering. During ICO, a project sells its tokens to investors - venture capitalists or regular people.
The main problem of this method of cryptocurrency investment is accessibility: unprepared and even fraudulent projects often enter the market. In this regard, investing in ICO is a pretty dangerous deal.
Therefore, when evaluating a blockchain project, investors should pay special attention to the team. If a startup does not have any full-fledged developers, none of the founders has the knowledge and experience in relevant fields, this should strike a warning note. Twitter and LinkedIn can come to the rescue in this matter. However, personal data needs to be checked profoundly.
Often, startups sell only the idea; they don't have a real product to show to potential investors. Even a successful project selection can not guarantee high profit.
At the same time, ICO has several advantages. The price of tokens can grow after some good news appearance and the value of undervalued coins often grows many times after getting on the stock exchange.
For those who are not confident in their strengths and capabilities, the best way to invest in cryptocurrency in 2018 would be the Buy & Hold strategy. It can bring high returns and does not require special knowledge and skills. You can also make profit with the help of ICO, but potential investors should carefully choose startups and be prepared for unpredictable twists in the development of the project.
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