Over the past few years, it seems like everyone has been buzzing about crypto investments. The news, social media, and even casual conversations point to the same captivating notion: the world of cryptocurrencies and its opportunities.
This widespread fascination is not entirely unjustified. Cryptocurrencies represent a new era of investment. They’re changing the financial landscape by offering decentralized and borderless transactions, opening up new opportunities for investors worldwide.
In fact, a survey conducted between July 2022 and January 2023 suggests that 46% of millennials across highly populous countries, including the United States, own cryptocurrencies.
That’s a lot of people investing in crypto. So you’re probably wondering, What exactly is this all about? What are crypto investments and how do they work?
First of all, it’s important to take the time to do your homework, just like with any other type of potential financial opportunity. Don’t rush into these investments blindly. There are several aspects of cryptocurrencies that you should be aware of before embarking on this journey.
In this article, we’ll explore the hype around crypto investment and what you should know before you dip your toes into this brave new world. Let’s get started!
What is a crypto investment?
Crypto investment refers to the practice of buying and holding cryptocurrencies. The goal is to keep digital assets for a certain period of your choice, with the expectation of a return in the future.
Let’s say you decide to invest in Bitcoin, the most well-known cryptocurrency. You sign up on a reputable crypto exchange platform, which allows you to buy and trade crypto. You might start by, for example, depositing $50 into your account.
On the platform, you see the current price of one Bitcoin. The number may be intimidating, but there’s no need to panic; you don’t have to purchase an entire Bitcoin. You can use your available funds to buy just a few fractions of it!
Following the transaction, you officially own Bitcoin. And if there’s one thing you can be confident in, it’s that its value will almost certainly change over time. In fact, it’s important to remember that the price can fluctuate suddenly and dramatically, sometimes in just a matter of hours.
Going further, imagine that over the next few months, the price of Bitcoin increases. As that happens, so does the value of your investment. At some point, you might decide to sell your Bitcoin when its price reaches a level you’re comfortable with and it aligns with your goals.
You might also choose to hold onto your Bitcoin for the long term, trusting that its value will continue to grow over the years.
But before going any further into the idea of crypto investments and how to start making them, let’s first step back and establish some of the basics.
What is cryptocurrency?
Cryptocurrencies are virtual currencies that only exist in the digital world, and are stored on computers connected to the Internet. Instead of relying on banks or governments, cryptos use a special technology called “blockchain” to keep everything secure and transparent.
Why are they called cryptocurrencies? The term “cryptocurrency” is a combination of “crypto,” which stands for cryptography, and “currency,” as they possess financial value similar to conventional money.
Besides crypto investments, you can also use the coins to make online payments and purchases, similar to using a credit card. For those who need to send money abroad, crypto can be used for remittances as well.
Each cryptocurrency has its own name and value, just like different types of real money (dollars, euros, Mexican pesos). While the most famous cryptocurrency is Bitcoin, there are many others, each with its own unique characteristics.
Some of the most popular cryptos include:
- Bitcoin (BTC)
- Ethereum (ETH)
- USD Coin (USDC)
- Cardano (ADA)
- Dogecoin (DOGE)
- Litecoin (LTC)
- Solana (SOL)
- XRP (XRP)
How do you get cryptocurrency?
Getting your first digital coins is easy, as you can buy cryptocurrency through a complete platform for crypto solutions, such as Bitso. Other options to get them are directly on the crypto’s website or a P2P platform (peer-to-peer).
Keep in mind that there are a few factors to take into account when choosing an exchange. Consider the security measures, fees, minimum investment requirements, and variety of cryptocurrencies available for purchase.
In general, the steps to get cryptocurrency are as follows:
- Sign up for an exchange platform.
- Research and choose the coin you want to buy.
- Make a deposit and transfer money from your bank.
- Manage your crypto assets, and you’re ready to go.
Now that you know what cryptocurrencies are and how to acquire them, let’s get back to the topic of investments!
What are the benefits of crypto investments?
Why should you choose to invest in crypto instead of other assets? Well, there are several important advantages to consider.
Security
Investing in crypto is secure because the digital assets themselves are secure. As mentioned earlier, they operate in a structure called the blockchain, and all their functioning and transactions take place within this network.
In practical terms, a blockchain network works like a ledger. All transactions are recorded there and can be audited or verified at any time by the community using it.
Learn more about the topic: What Is Blockchain? How Does It Work?
Transparency
Since all transactions are conducted on a blockchain network, everything is transparent and can be verified by anyone. This ensures the authenticity and integrity of the processes.
Investment freedom
You can make crypto investments all by yourself. You have the freedom to do it on your own terms and schedule without needing a professional, bank, or organization.
But hold on! If you don’t have the necessary knowledge about digital currencies, this freedom can be a double-edged sword. To make the most of this investment freedom, it’s essential to learn as much as you can about cryptocurrencies. Keep track of Bitso’s latest blog posts and news to stay informed!
How do you stay safe when investing in crypto
Better safe than sorry, right? Whether you’re a beginner user of digital currencies or an experienced investor, you should always keep an eye out on the market and keep your money safe!
Remember that cryptocurrencies are volatile
Crypto is volatile: their prices can go up and down at any time. This is one of the most important things to keep in mind about crypto investments.
Not even cryptocurrency experts can ensure the appreciation of digital currencies. Take into account the fact that, as with any type of asset, you need to do your research to understand the market.
Watch out for scams
Unfortunately, there are many cryptocurrency scams out there, and even the most experienced individuals can become victims of fraud.
If anyone promises you guaranteed returns through cryptocurrency investments, walk away from the conversation which could be misleading or outright deceiving you.
Bitso goes the extra mile to offer you a secure platform for all of your crypto tradings. Bitso follows strict standards regulated by the Gibraltar Financial Services Commission and even provides insurance for some cryptocurrencies.
Is crypto worth investing in?
Investing in crypto is a choice that largely depends on your investor profile. That means you should know your goals and identify your level of tolerance for financial risks before starting to build your portfolio.
Find out more: What is an investor profile? How to know yours?
You should also bear in mind that the use of digital currencies is expanding, and their increased roles are positioning them well for the future of the financial sector.
For instance, today there are many products and services you can purchase with cryptocurrencies, ranging from simple movie tickets to real estate. Cryptocurrencies, in other words, have more uses than just as investments. Click here to see stores that accept cryptocurrencies in Mexico!
On top of that, digital currencies can serve as a means to protect your money from inflation, as evidenced by the case for investing in stablecoins.
A stablecoin is a type of cryptocurrency in which its value is pegged to another asset, commonly a fiat currency like the dollar. In practice, it means that one stablecoin is equivalent to one dollar.
How do you start a crypto investment?
With all that in mind, let’s get to the heart of the matter. How do you start investing in cryptocurrencies?
1. Learn more about the crypto you want to buy
Each cryptocurrency has a different purpose and intended use, and getting to know these specifics should be your first step on the path to investing.
After all, your investment should align with your interests and be financially beneficial to you, whether in the short, medium, or long term.
Keep track of what experts are saying about the future of crypto and its potential for growth, how it operates, and other aspects that make it more or less appealing for buying and selling.
2. Decide on how to get cryptocurrency
Remember when we talked about how to get cryptocurrency? In acquiring cryptocurrencies, you should choose between three primary methods.
The options include the currency’s website, peer-to-peer platforms, or the best crypto exchanges.
Exchanges tend to be the safest and most practical option. As legal, established companies, the layers of security implemented by these platforms prevent you from falling victim to scams or financial fraud.
If you do choose to invest in cryptocurrencies, you can find dozens of types all in one place. Bitso offers more than 50 different ones!
3. Choose the wallet to store your crypto
When you invest in crypto, you will have to store your coins in a crypto wallet. There are several different types of crypto wallets, including hot, cold, and warm.
Hot wallets are connected to the Internet, and you can access them through web browsers or mobile apps. They offer convenience for frequent transactions and are ideal for holding smaller amounts of crypto intended for everyday use.
A cold wallet, on the other hand, is an offline storage solution. It provides enhanced security by keeping private keys away from internet exposure, making them less vulnerable. These wallets are suitable for long-term holdings and large amounts of cryptocurrencies.
The last option is to get a warm wallet. Warm wallets are a mix of the first two, providing users with the benefits of utility and security. Even though these wallets are connected to the Internet, you can also download the software on your devices for maximum safety.
4. Research and keep track of market movements
Finally, staying informed and monitoring crypto market movements is vital for any aspiring cryptocurrency investor. Digital currencies have a dynamic nature, and because of that, they demand vigilance and adaptability to make well-informed decisions.
By conducting thorough research, crypto users can uncover valuable insights about specific cryptocurrencies and their underlying technologies.
Moreover, keeping an eye on market trends, price fluctuations, and trading volumes enables you to strategically identify potential entry and exit points.
Various resources can help you in staying updated on the latest crypto news and trends. Reliable websites, legitimate financial experts, and crypto-focused forums offer real-time updates and valuable discussions from experts and enthusiasts alike.
Do you want to start investing in cryptocurrencies right away? Open your account on Bitso through our website or the Android or iOS application!
Bitso is much more than an exchange. It’s a complete platform for crypto solutions, including buying, selling, custody, and much more.
Visit Bitso website now and join the more than 6 million people who trust our services!
