Investing in cryptocurrency can feel like a gamble. The market is extremely volatile, so values could skyrocket one day, then suddenly plummet the next.
It’s a lot like financing a start-up. A single coin could one day grow as big as Grab in value or it could fizzle and die. You have little way of knowing which it’s going to be.
But if that’s a chance you’re willing to take, then it might be worth getting into the crypto market.
Here are a few steps you need to take note before getting started on Crypto Investing…
1. Study the market
First, you have to do your homework. Focus on understanding the big picture, then zero in on specific coin markets. Do your research and find out the trends for established cryptocurrencies like Bitcoin and Ethereum, as well as up-and-coming ones. This can help when you’re choosing which coins to invest in. At first glance, the popular coins might be your best bet, but it’s also worth looking into rising cryptocurrencies like EOS and Stablecoins, as these might be better for beginners.
It’s also important to note that there are different ways to invest in cryptocurrencies. Trading is one avenue.
For example, fiat-crypto exchanges are highly regulated as it allows people to trade in cryptocurrency for traditional currency (like USD) and vice-versa. You can also engage in crypto-crypto exchanges, peer-to-peer exchanges, and brokerages.
Another avenue for crypto investment is in lending it. It works the same way as lending traditional currencies.
The difference is that it’s used to build up fundamental technologies that allow for the continued existence of cryptocurrencies. Through this, you can expect to be paid back with a handsome interest rate.
As you can see, there are a lot of ways to invest in the crypto market, so make sure you know where you want to start!
2. Utilize fintech services
Though the crypto market is relatively new, a lot of fintech services have been popping up, and these can be of great help, especially to a beginning crypto investor.
Luckily for you, Singapore is the central hub for cryptocurrencies and blockchain.
The country has been very welcoming of these new technological advancements and has even enacted laws geared towards consumer protection and anti-money laundering.
Even the country’s largest bank is planning to offer fintech services. DBS will soon be launching the DBS Digital Exchange, which will offer digital exchange, digital asset custody, and security token offerings.
With these laws and services, Singapore is, indeed, the ideal place to start investing in cryptocurrencies.
Once you know what you’re getting into, and you’ve made use of the services available, then you’re ready to dive in.
3. Take calculated risks
The emphasis here, of course, is on ‘calculated.’ Investing blindly is a no-no, whether it’s in cryptocurrency, forex, or property investment. Neither is it wise to invest in what everyone else is betting on. Values might plummet, regardless.
So, in line with the first point, make sure your bets are backed by knowledge. Due diligence goes a long way, and so does asking the right people for guidance. If you know the market better, then you’re in a position to make smarter choices.
Additionally, to reduce the risk of potential losses, invest in more than one cryptocurrency. The market is volatile, but that doesn’t mean that every coin is going to fail at the same time. That’s highly unlikely. There are thousands of markets to choose from. Just be wary of scam coins.
Finally, don’t put all your savings into these investments. Given the volatility of the crypto market, it would be best to invest only what you’re willing to lose.
Financial risks will always be present in the investing scene, but you have the power to control these risks. If you control your risks, you control potential losses, and that’s how to get ahead in investing.
This guest post is written by *Astrid Stacie Myrtle*