Over the past few years, cryptocurrency has become an ideal investment option. Even though most people had reservations earlier, the boost following the coronavirus pandemic has made crypto investment a popular choice. It has become the best alternative to traditional stocks and other commodities.
Given it’s still new to the market, most people don’t know how to get started. Here is our step by step guide to getting started.
1. Allocating a portfolio to cryptocurrency
The first step to getting started in crypto investment is to understand your finances. In most cases you already have various items in your portfolio, crypto is another way of spreading risks. This is the time to understand how much you are willing to spend on cryptos.
The cryptocurrencies work similarly to stocks such as gold and silver. It attracts risks and is highly volatile. Therefore, only invest the amount you are willing to lose. You should consider making it a small part of your investment portfolio. For example, more than 5% – 10% of your portfolio being crypto is unwise.
2.Choosing the cryptocurrency
Once you have established how much you are willing to spend, you now have to look for where exactly to spend it. The crypto market is so big with thousands of tokens in the market. Take your time to consider the various cryptos and find the best one for you.
To understand crypto, look into its whitepaper, the price history and price prediction. Also, look into the current events and news about the crypto market and future development plans for the crypto.
Currently, Bitcoin and Ethereum are the top cryptos. While they come with more stability they might be too expensive for a start. Look for lower cryptos like XRP that allow more market position while still promising developments. You can also invest in more than one crypto to spread risks.
3. Choosing the trading platform
The next step is to find where to buy the crypto of choice. There are various good cryptocurrency exchanges in Australia that allow you to trade cryptos. These platforms allow you to create an account then top it up with a fiat currency which you can then use to buy the crypto.
When choosing an exchange, look for the supported payment options, the available cryptos, and security. For Australian investors and traders, we highly recommend CoinSpot as it supports more than 370+ cryptocurrencies with a reasonable fee scheme, flexible payment methods, stringent security measures, and 24/7 customer support. You can read our in-depth CoinSpot review to learn more about its fantastic features.
4. Storing the cryptocurrency
Once you have purchased the crypto, you have to store them safely. Look for a reliable wallet to store the cryptos. Even though various crypto exchanges provide wallets, they are only ideal for short term use. For long term holding, look for various hot or cold wallets to use.
The hot crypto wallets are the ones available online that come with convenience. Cold wallets are offline and are more secure. You use crypto keys to access the wallets.
5. Securing your investment
The last step into crypto investment is security. Given the online existence of crypto platforms, they are susceptible to hacking. Access your accounts and wallets only from secure computers. Also, do not share your private keys with other people and back up the keys.
