The Beginners’ Guide To Investing In Cryptocurrency In 2020

Learning how to invest in cryptocurrencies may seem like a daunting venture for beginners. There are so many terms and definitions that one has to grasp quickly to succeed.

What is Bitcoin, and what is blockchain technology? What are tokens, wallets, and ICOs? Can you get rich overnight? Do you pay taxes for digital assets? And, how does "Proof of Work"…work?

Like any other financial enterprise, the crypto industry has success stories and horror tales of bankruptcy-inducing scams. Some people enter the market with thousands of dollars and exit it with millions. Other less-inspired, and less-fortunate investors may travel the same path, but in the opposite direction.

More than a decade has passed since cryptocurrency became a real thing. The sector has developed at a rapid pace and has now become a solid, stand-alone market. Stepping into 2020 with an eye on crypto investment opportunities is the sensible thing to do for any daring investor that has a knack for innovation.

If you want to enhance the value of your assets, follow our beginner’s guides on the most popular cryptos. Read on to discover how to invest in cryptocurrencies and learn how to carve a successful trajectory on one of the hottest financial markets of our times!

How to Invest in Cryptocurrency – What you need to know FIRST!

If you've come this far, you have been pondering an investment in cryptocurrency more than once. Many people believe that Bitcoin and other blockchain-based assets are the future of financial transactions. These digital, non-palpable goods may reshape the global economy and change our understanding of money and property.

What is cryptocurrency?

The idea of virtual money has been around since the 1970s. For almost 40 years, it was nothing more than a geek's dream of a futuristic economy. It was only after the release of a revolutionary technology called cryptocurrency in the late 2000s that the fantasy started to take shape.

In 2009, an anonymous individual or group known as “Satoshi Nakamoto” came up with a digital asset called Bitcoin, which would be available on blockchain technology. At that time, all of these terms sounded like gibberish to most people. To the neophytes, they still do today, and if you want to invest in cryptocurrency, you must understand precisely what they mean.

Blockchain is a decentralized system that enables the creation, execution, distribution, and trading of cryptocurrency.

Cryptocurrency is any digital currency that is regulated by a set of encryption protocols on a certain blockchain.

Bitcoin is the first and most popular cryptocurrency to date. It is a digital asset that is not under the control of a central bank, and which users can freely administer in a peer-to-peer network.

Reasons to Invest in Cryptocurrency

We may be on the brink of a new era where digital assets replace hard currencies. However, investing in cryptocurrencies before it becomes cool is not the only reason to put your money in cryptos.

The main reason for learning how to invest in the cryptocurrency market is your overall understanding of it. More specifically, the way you perceive three fundamental factors:

  • The American Dollar, which is the current world-leading currency, is heading towards an imminent fall. Its replacement will not be another hard world currency.
  • Cryptocurrency trading is a free, decentralized process that has unlimited ways of development. It is available to more investors than traditional financial transactions.
  • The evolution of the financial market is subject to technological development and blockchain technology will influence it for many decades to come.

Nevertheless, cryptocurrency is not all milk and honey. Conservative financiers that shy away from investing in cryptos have their reasons, such as:

  • Entry-level investors lose extravagant amounts of money due to their fear of missing out on a trending method of making easy money quickly.
  • Just like any other financial sector, the crypto market is liable to scams and deceiving bubbles.

If you fall victim to these dire circumstances is only because you lack knowledge on how to invest in cryptocurrency. Through step-by-step learning, experimenting and acquiring more know-how, you can become a success story rather than an anecdote of failure.

Investing in cryptos became a global phenomenon between December 2016 and December 2017. Due to the staggering surge in the popularity of Bitcoin (BTC), the market reached a total market cap value of $500 billion. BTC tokens went on sale from $750 to $10,000 apiece in just 365 days!

Here is a graphic depiction of BTC price evolution throughout 2017, courtesy of coinmarketcap.com:

(Click on image to enlarge)

It is no surprise that buying and selling cryptocurrency became highly popular even for people who had never made any major financial investments before. Just when the crypto party was at its peak, the inevitable happened. The market dipped. The music stopped and Bitcoin together with other cryptos devalued overnight.

Many of the people who lost their lifelong savings in December 2017 Dip had not taken calculated risks. The disappointing outcome of their investments in cryptocurrency brings us to our first tip:

Only invest what you can afford to lose

The crypto market is highly volatile. There is no financial enterprise that will guarantee you substantial ROI come what may, and investing in cryptocurrency does not make an exception to this rule.

You need to ensure that funding a cryptocurrency venture does not liquidate your assets. Also, several factors can nullify your investment on the spot, such as:

  • Your country outlawing cryptocurrency trading
  • A hackers’ attack on your account
  • A severe market dip

In the days of blockchain development, it is a rookie investor's mistake not to hold cryptocurrency. It is just as worse to have all your assets in that form.

Bitcoin is not the only cryptocurrency out there

Bitcoin came into existence in 2009, and for 7 years it was the go-to crypto for investing in decentralized currencies. Many people even confused the two terms and generally referred to any blockchain-based token as Bitcoin. Some of them still do.

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Disclaimer: The following material is not a sure-fire investment plan. This guide is a well-researched compilation of data concerning the cryptocurrency market. Readers should treat it as an ...

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