Whether it’s the idea of cryptocurrencies themselves or the diversification of their portfolio, people from all walks of life are investing in digital currencies. If you’re new to the concept and wondering what’s going on, here are some basic concepts and considerations for investing in cryptocurrencies.
What cryptocurrencies are available and how do I buy them?
With a market cap of around $278 billion, Bitcoin is the most established cryptocurrency. Ethereum is second with a market cap of over $74 trillion. Besides these two currencies, there are other options including Ripple ($28B), Litecoin ($17B) and MIOTA ($13B).
Being the first to market, there are many exchanges worldwide for Bitcoin trading. BitStamp and Coinbase are two popular US-based exchanges. Bitcoin.de is an established European exchange. If you are interested in trading other digital currencies along with Bitcoin, then this is a crypto market where you will find all digital currencies in one place. Here is a list of exchanges by 24-hour trading volume.
What options do I have to save my money?
Another important consideration is the storage of coins. One option, of course, is to store them in the exchange you buy them from. However, you will need to be careful when choosing an exchange. Due to the popularity of digital currencies, many new and unknown exchanges have appeared everywhere. Take the time to do your due diligence so you can avoid scammers.
Another option you have with cryptocurrencies is that you can store them yourself. One of the safest options for storing your investment is hardware wallets. Companies like Ledger allow you to store Bitcoins and many other digital currencies.
What is the market like and how can I find out more about it?
The cryptocurrency market changes a lot. The volatile nature of the market makes it more suitable for long-term play.
There are many news sites that report on digital currencies, including Coindesk, Business Insider, Coin Telegraph, and Cryptocoin News. In addition to these sites, there are many Twitter accounts that tweet about digital currencies, including @BitcoinRTs and @AltCoinCalendar.
Digital currencies aim to disrupt the traditional currency and commodity markets. Although these currencies still have a long way to go, the success of Bitcoins and Ethereum have shown that there is real interest in the concept. Understanding the basics of cryptocurrency investing will help you move in the right direction.