So, are you ready to give investing in cryptocurrencies a chance? You have chosen a great time to gratify your interest. The top cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) have seen uncontrollable growth in 2017, and with the arrival of mainstream, institutionally-backed Bitcoin future, it’s expected 2018 is poised to see even massive growth. If you are confused where to start, we have got you covered. We will guide you about all the major points a beginner should be aware of when it comes to investing.
1: Sign Up for an Exchange
Let’s get started with the simple basics. If you’re looking to buy something, you’ll have to go somewhere to buy it, and the cryptoverse is no different. You can sign up for Coinbase first as it’s the Wild West, and there’s no safety net for any screw-ups.
However regulation is coming, but not here yet, so although bitcoin was created just to avoid centralization – unfortunately, that’s not where it is now. But, I believe it’s definitely a good thing thanks to the lack of maturity of this market. Despite the major drawback is that if you get hacked, that’s on you. No one would help you to pick up the pieces, that money is just gone.
2: Enable Two-Factor Authentication
Hackers are everywhere, especially in the world of crypto, so make sure you have two-element authentication on every account. In order to do so, sing in like you regularly would then input a second code sent directly to you. This truly is the Wild West and saves for an exchange as if your crypto is gone, it’s gone.
Most importantly, don’t enable the option where they send you a text as it’s much easier for hackers to scrape together enough of your all details off the web to call your cell company, act like you, get your texts forwarded to several phones and you’re screwed entirely.
3: Understand Bitcoin’s Influence on the Market
Bitcoin basically belongs to the crypto world what the U.S. dollar is to the global economy. It’s the cryptocurrency that makes you purchase other cryptocurrencies with. And it’s the only cryptocurrency with mainstream branding. So, the market’s moves are indistinguishably linked to bitcoins.
Ethereum is a competitor with different tech to some extent; Litecoin is like a poor man’s version of bitcoin whereas bitcoin cash is a fork of bitcoin. The market logic has shown that where there are fear, uncertainty, and doubt in the bitcoin markets, scared money rushes to safe heavens. And the above-mentioned coins are typically where scared money winds up. So, if you have made up your mind to trade, don’t do anything until you look at bitcoin’s chart vs these others to see if any patterns are developing.
4: Always Listen to Smart People
You are highly advised to stick on expert advice to help wade through the fear, uncertainty, and doubt. You can follow up plenty of crypto investors, day traders and software developers on Twitter and Facebook. Furthermore, news outlets such as Coindesk are helpful to keep up with the day to day happenings in the space.
5: Don’t Forget About Taxes
In case you cash out your investment before one year the initial purchase, you’ll have to pay much higher taxes on it as the IRS classifies cryptocurrency as a property. So that is how taxes on it are paid.