Cryptocurrency has become widely popular over the last several years. With new coins entering the marketplace each week, investing in cryptocurrency has gone from a fringe hobby to more mainstream. If you invest properly, there can be a lot of money to be made in cryptocurrency, but if you don't time it right, you could also lose big. If you want to invest in cryptocurrency — at least successfully — you need to play it smart and keep your wits about you. Here's how.
1. Take a cryptocurrency class.
The idea behind cryptocurrency is basic. It's a digital currency created and traded in a secure way, using powerful servers. The reality, however, is much more complicated. The way cryptocurrency is "mined" and stored and the way it is changing the economy requires a more in-depth knowledge of computing and economics to fully understand. The best way to gain this knowledge is to take cryptocurrency trading classes. There are several online schools that offer them. Typically, you can learn at your own pace over the course of several weeks or months. When you're done, you will understand the background behind cryptocurrency better, which will enable you to make smarter investments.
2. Always look for new opportunities.
When playing in the stock market, people often like to buy stocks from established companies since they have a better idea of how those stocks will perform. But when buying cryptocurrency, you often stand to make more profit by buying the new coins from companies that are just emerging. Coin from a new company is initially worth very little, but then as the company grows, so does its value. You stand to earn so much more when you focus on investing in new coins rather than in established ones whose value has somewhat stabilized.
3. Be ready to pull out.
Another difference between playing in the stock market and investing in cryptocurrency is the strategy. When investing in stocks, it's usually best to weather the storm — keep your money invested through a downturn, and count on it going up again. Cryptocurrency has not been around long enough to be able to predict whether its value will go back up after a plummet. So you must be ready to pull your money when you think it has reached a peak and that its value will not continue to climb upward. There's more day-to-day trading involved.
With the tips above, you can play it smart when investing in cryptocurrency, which should hopefully pay off in a big way!