The current cryptocurrency market is unlike anything else in the history of finance. It’s been years since the introduction of Bitcoin paved the way for a new type of finance and since then experts have been scrambling to find out which altcoin would become the next Bitcoin.
The Absolute Beginner’s Guide to Cryptocurrency Investing
While it’s relatively easy to buy and sell digital currency, knowing what you’re doing before investing will save you money and heartache in the long run. There are two types of investors: beginners and experts. Beginners should start on an exchange, while experts can research the best cryptocurrencies to invest in.
Some of the most important things to note when investing in cryptocurrency are:
- It’s easier for new cryptocurrencies to be a scam than it is for established ones. If you’re buying into an established coin like Bitcoin or Ethereum, you’re much less likely to fall into a pump and dump scheme.
- If you see a new coin with a huge price bump right after it hits exchanges, chances are it’s a scam. These scams aren’t hard to spot as a newcomer because you’ll see one or two huge bumps in the value of a coin, and then it crashes almost instantly.
- Finding an informational initial coin offering ppt online can keep you updated on when and how to buy tokens before the cryptocurrency is released on exchanges. This is similar to an IPO (Initial Public Offering) for stocks. However, since new cryptocurrencies are so volatile, ICO’s are much riskier.
How to Find Your Next Cryptocurrency Investment
With the steps below, you can learn all about initial coin offerings, the history of cryptocurrency, how to start investing in crypto, and the pros and cons of ICO’s.
This guide will help investors of all experience levels to find their next cryptocurrency investment opportunity.
1. Get Familiar with the Current Cryptocurrency Market
The first thing that every investor should do is get familiar with the current state of the cryptocurrency market. Although money can still be made by investing in undervalued coins, it’s also important to know which cryptocurrencies are already valuable.
By researching altcoins and trading with strong technical analysis, you can profit from the price swings of cryptocurrency. That doesn’t mean that this is a way to get rich fast; paradoxically, patience will make you money.
2. Watch Out for Altcoin Pump and Dump Schemes
Cryptocurrency investors will often find that the market is flooded with pump and dump schemes.
A pump and dump is when a new altcoin gets some hype, and some people attempt to make a profit by quickly buying up all of the available COI (Coins of Interest). This allows the currency to charge an exorbitant price quickly before eventually crashing back down to its original price. Pump and dump schemes can be extremely stressful for price speculators, and they’re usually one of the first things that investors should avoid when looking for new cryptocurrency investments.
Researching altcoins can be time-consuming. Between checking out social media, relying on online forums, and scouring the internet for the latest crypto news, it’s easy to get overwhelmed with information overload.
You can also find and use an initial coin offering checklist online to see if your project is a viable investment, which includes how it will use blockchain technology and whether or not the team is credible. If it does meet these requirements, you’ll want to compare the market cap of a project with gold or Bitcoin.
3. Look at Altcoins Where the “Flippening” Hasn’t Happened
While it’s true that some cryptocurrencies have already reached an astronomical price, it’s also important to realize that there are still plenty of altcoins that haven’t yet reached this stage. As such, investors should avoid investing in coins without significant momentum behind them.
While researching altcoins, it is vital to note that flippening might happen when a small market share coin gains traction and takes over from a larger competitor. This often happens when a smaller coin starts to gain general recognition and is used either as a store of value or as a medium of exchange by the mainstream.
4. Invest Only What You Can Afford to Lose
No matter how much you plan on investing in cryptocurrencies, it’s always a good idea to keep a close eye on the value of your investment. Whether it’s your retirement savings, your home, or even the other things you own, there should never be more cash tied up in investments than you can afford to lose.
There is no guarantee that any cryptocurrency you invest in will increase in value, and even if it does, there is no guarantee that you will be able to sell it for a profit. There are plenty of traders on the market who have been around for years, and they continue to lose money.
But if you can’t afford to lose your entire investment, then you should never place any money in the market. It would be best if you continue using your savings or retirement funds to invest instead.
When you totally understand how to find altcoins before they spike, you will be on the way to financial success.
5. Look at the Long-Term Potential of Altcoins
Investing in an altcoin that most investors don’t yet recognize is a great way to profit from its future potential. However, some people will also profit from an altcoin without realizing the long-term value it has.
While Bitcoin and Ethereum have climbed to incredible heights in recent years, plenty of altcoins will likely achieve the same status in the future. The price of many of these coins could easily be higher if they were recognized by most investors today.
Before buying an unfamiliar altcoin, it’s best to check the long-term potential. As we’ve seen with Bitcoin and Ethereum, it’s possible for cryptocurrencies to reach extremely high levels.
6. Buy Coins Whose Value Is High Above Their Current Price
When most people think about investing in cryptocurrency, they tend to think about investing as soon as possible. There is a good reason for this, as it is possible to make a lot of money from cryptocurrency if you buy it at the right time.
In the world of cryptocurrency, however, the current price is only one part of the equation. A coin’s value has a lot to do with its history and what you’re willing to pay for it. While Ethereum is one of the most famous coins on the market today, that hasn’t always been true.
It is essential to know how to find altcoins before they spike because that can happen anytime; there is no guarantee when they will be at their peak. But to find coins that might be on the rise, one needs to focus on the markets and not just go with what’s trending.
Anyone who invests in cryptocurrency should always be prepared to lose money. While they can profit from dealing with cryptocurrencies, it’s always best to invest just enough to keep you going. If you have enough cash tied up in altcoin investments, it might be best to save up for a few months or a year instead.
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