Investing in Cryptocurrency Guide
We are investing to increase wealth and prevent losses from rising inflation! Investments fall into different categories in terms of investment time and type of investment. Such as long-term investment in real estate and short-term investment in bonds! Digital currencies or correctly cryptocurrencies are also one the type of investments!
Stay tuned to Adaas Investment Magazine for a guide to investing in cryptocurrencies in simple language! (EDUCATIONAL PURPOSES ONLY!)
Table of Contents
What is cryptocurrency?
The following definition introduces you to the nature of cryptocurrency:
“Cryptocurrencies are a special form of digital and virtual money made under cryptography and blockchain technology!”
Now you are familiar with the scientific concept of cryptocurrencies and this concept is enough for investment, technical discussions are needed for developers and people active in other parts of the cryptocurrency market and its applications! Of course, there is a direct relationship between the level of knowledge and the return on investment, but this is Beginner’s Guide to “Investing in Cryptocurrency”
Benefits of investing in cryptocurrencies
The intrinsic value of cryptocurrencies is examined from various aspects such as technology, politics, etc. but we at Adaas Investment Magazine have prepared for you the benefits of investing in the cryptocurrency market only from the perspective of investment in financial markets:
Preserving the value of assets
Any kind of investment is made to maintain the value of assets and increase wealth.
Given the nature of the investment and the allocation of cryptocurrencies as an investable asset, we have a simple conclusion that this asset will not lose its value relative to inflation in the future!
Of course, in a more specialized layer, we can say that the policy of supplying Bitcoin, which is one of the best cryptocurrencies at the moment (2021), is an innovation against the challenge of inflation, which makes this asset with more demand and less supply over time.
Other cryptocurrencies also have indicators for preserving the value of assets over time that require a specialized review of each cryptocurrency separately and conclusions.
Invest in Blockchain Technology
Blockchain technology is a revolution like the Internet!
Blockchain technology is known for its cryptocurrencies, but the intrinsic value of this technology is so great that celebrities describe it as a revolution like the Internet. There are other cryptocurrencies that are based on other technologies such as the Hash-graph, but most cryptocurrencies are powered by Blockchain technology.
The future would be digital!
Due to the exponential growth of the technology function, you will live in a digital world!
If you have seen an ad investing in artificial intelligence and self-driving cars in the past, would you invest in these technologies? If your answer is yes, cryptocurrencies are just like any other powerful technology and it can be suitable for your investment! People who invested millions of dollars in oil and fossil fuels saw a momentary drop in the value of their assets during the Covid-19 Pandemic, and Amazon or Netflix, which provided digital services, saw instant profits!
Risks of investing in cryptocurrencies
When analyzing any investment position, you should be fully aware of all the weaknesses and the possibility of losses and enter with full knowledge and compliance with capital management rules!
Just as investing in the cryptocurrency market has brought good profits to investors so far, it has also had huge losses! The definition of risk is “the probability of occurrence in the direction of profit or loss”; And you are buying risk by investing technically!
Economic bubble theory
A price bubble occurs when the value of an asset experiences irrational growth due to high demand.
Well-known figures such as Mr. Damon, CEO of JP Morgan Bank, have theorized about the irrational growth of the cryptocurrency market and view prices as an economic bubble. According to this theory, due to the lack of financial and legal support for these currencies (which is one of the ideals of cryptocurrencies, lack of political and legal support) as well as high fluctuations and other indicators cause prices to fall in the cryptocurrency market.
Cryptocurrencies against governments
One of the ideals is to decentralize financial processes and not need Fiat currencies!
Governments have not yet formally adopted cryptocurrencies, and restrictions on the technology and its use may reduce prices in the future. This article was published in 2021 and may increase the price of cryptocurrencies by accepting that in the future.
Cyber-attacks (Hack)
Given the digital nature of this asset and technology, the risk of cyber-attacks should be considered.
Cyber attacks take place in different aspects; For example, attacks on the cryptocurrency networks, attacks on the cryptocurrency storage by individuals (wallets), etc., which is a relatively specialized matter and we will not address in this article.
But it should be noted that people who run powerful cryptocurrencies such as Bitcoin are aware of all these challenges, and this knowledge of developers reduces the risk.
The best cryptocurrencies for investment
In general, there is no best! You must have complete information about the projects or follow reputable analytical sources. We do not publish the name of any cryptocurrency in this article, but we have prepared the features of cryptocurrencies suitable for investment for you.
Acceptability and credibility
It must be generally acceptable for exchanges and have high liquidity.
Features and advantages
It should be noted what innovation cryptocurrencies offer and what is superior to their competitors.
Security
Project safety is a very important indicator and of course a bit technical, but the test results are understandable to the public.
Suitable Price
Before buying, you should have a price analysis so that you do not enter the price ceiling.
The indicators you have studied are quite sufficient for the initial analysis and review, and the confirmation of all these indicators will guarantee you the growth of the project and ultimately profit. Of course, with a simple search, the names of the top cryptocurrencies will be listed for you, and you can start investing in any of them by your own decision.
Personal or professional investment?
We are sure that you are looking for a headline to start investing in cryptocurrency! Join us for more reviews:
First of all, you should keep in mind that this article is a Beginner’s Guide to investing in cryptocurrency. In the next step, you should be fully aware that investing in the cryptocurrency market is very different from investing in the stock market in terms of indicators such as capital management, how to buy and sell, and so on. Of course, we must say that in the future these challenges will disappear completely and any person with a basic level of knowledge can easily enter a personal investment! But now, with the basic knowledge level, it is possible to lose assets, block assets, and so on.
Simply put, if we want to make a useful suggestion to you who are studying, it is that more than anything, knowledge in the cryptocurrency market will be useful for you, and in this ratio, not having enough knowledge will cause you to lose your capital.
The summary of these paragraphs is that if you are confident in your level of knowledge, start investing personally or any other activity to increase wealth in this market, but otherwise be sure to seek help from an expert.
The end words
At Adaas Capital, we hope that by reading this article, you will become familiar with the topic of Beginner’s Guide to Investing in the Cryptocurrency market and gain useful information. You can help us improve by sharing the article “Investing in Cryptocurrencies Guide” published in Adaas Investment Magazine and help optimize this article by submitting your comments.
References
- Investorjunkie.com
- Nerdwallet.com
- The Everything Guide To Investing In Crypto Currency by Ryan Derousseau
FAQ
What is the minimum investment in the cryptocurrency market?
Depending on the type of cryptocurrencies targeted for investment, the minimum investment amount is a variable.
What are the best cryptocurrencies to invest in?
Investing in cryptocurrencies requires a lot of knowledge. Examining projects under the indicators of technology, application, method and amount of supply, etc. helps the investor to contribute his capital in the right direction.
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