Have you been thinking of buying some cryptocurrency? Whether you’re a seasoned investor or just starting, it’s important to do your research before investing in any digital assets. The crypto market can be volatile, so it’s important to understand the risks before making any purchases. If you’re thinking of buying crypto, here are six things you need to know.
1) High Volatility
First and foremost, you need to be aware of the volatility associated with cryptocurrencies. The crypto market is still very young and many popular digital assets like Bitcoin or Ethereum can see price fluctuations of up to 20% in a single day. If you’re planning on buying crypto for short-term gains, you might end up with some serious losses. Beware of crypto volatility before you make any purchases. As a beginner, you have no idea how the market will evolve. It’s always better to play it safe and don’t invest more than you can afford to lose.
2) Crypto Regulations
Crypto regulations are still non-existent in many countries. Be careful if you’re planning on using a peer-to-peer exchange to transfer money from your bank account. In the past, these exchanges have been known for being hacked, resulting in stolen funds. Remember, always do your research before transferring any money. The best option is to buy crypto from a reputable online exchange that accepts fiat currency. To ensure your security, always go for a platform that comes with the latest security features and two-factor authentication.
3) Crypto Exchanges
Many crypto exchanges allow you to trade dozens of popular digital assets. Before you sign up, be sure to check out some reviews on various crypto exchanges. Some of these platforms can be a scam and steal your hard-earned cash. Usually, you should avoid P2P exchanges and use regulated online trading platforms. The best crypto exchanges for Australians include CoinSpot, Swyftx, and Digital Surge. Make sure you compare fees, security features, and customer support before making the final decision. If you’re new to crypto, you might want to start with a trusted exchange that offers a variety of coins.
4) Crypto Wallets
Crypto wallets are digital wallets used to store various cryptocurrencies. There are many different types of wallets, but the most popular are desktop, mobile, and online wallets. Desktop wallets can be downloaded and installed on a PC or laptop. Mobile wallets are ideal for people who often use their cell phones for cryptocurrency transactions. Online wallets are usually free, but they don’t let you control your private keys. As a beginner, it’s best to use secure wallets that come with the latest security features.
5) ICOs
ICO stands for Initial Coin Offering and it’s a fundraising method used by new crypto projects. During an ICO, a percentage of the cryptocurrency is sold to early backers of the project in exchange for legal tender or other cryptocurrencies. ICOs can be a great way to invest in new and upcoming cryptocurrencies, but they can also be very risky. Before investing in an ICO, you should read up on the project and try to understand its goals and roadmap. If you’re looking for new crypto investment, start by looking at ICOs.
6) Mining Cryptocurrency
Cryptocurrencies can only be mined by using powerful computers that solve complex algorithms. The process of mining Bitcoin, for example, consumes a lot of electricity and can be quite expensive. If you’re thinking of starting to mine cryptocurrency, you need to be aware of all the associated risks and costs. Some mining rigs can pay for themselves over time, but most people never recoup their initial investment. The best way to make money from mining is to join a mining pool and share the rewards with other members.
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