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Cryptocurrency

Key Steps Required for Investing in Cryptocurrency

One of the hottest and most interesting trends in investing over the last decade has been the rise of crypto assets as a viable option for portfolios. With the creation of Bitcoin, which came to the market in 2009, a new era was ushered in where digital currency became one of the choices for investors open to a certain amount of risk. Cryptocurrency has been a hot, and extremely volatile, market at times. One Bitcoin was, at its peak, worth $17,000 and it later dropped to only $3,500. Because of the potential for wild market swings in virtual currency, it’s a good idea to limit your holdings to perhaps 1 to 2 percent of your portfolio. As with any risky asset, you should accept the fact that you could lose most or all of your investment.

Do Your Research

In a way a virtual currency like Bitcoin is more of a speculative bet than it is an investment per se. When you buy one of these assets you are betting that you are purchasing at a low point and the coin will increase in value. Factors such as the faith of investors and public interest in cryptocurrency can drive price changes. Since the emergence and early adoption of Bitcoin, a number of other crypto assets have also come to market. One of the most popular new offerings is Ethereum. There are also many other altcoins to evaluate before making your buying decision.

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Get Your Bitcoin Wallet

Even virtual coins need a wallet, and in the cryptocurrency world you can choose between a software or hardware wallet. A software wallet is a third-party application that connects with your bank account. Coinbase is the most popular choice, but you should be careful because other providers have been hacked or collapsed in the past. Hardware wallets are kept off-line and are therefore considered to be more secure.

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Connect Your Bank

Before you can buy a Bitcoin, you will need to link your bank account with your wallet. Purchases made via bank account can take four or five days for processing. With credit cards or debit cards you can buy crypto assets immediately. If you are a college student one way you can free up some money for investing is to apply for and take out student loans to pay for your education. In general, student loans do not need to be paid back until six months after you graduate or leave school. This will free up funds and allow you to use your savings or job income to build your portfolio.

Join a Cryptocurrency Exchange

The next step on the road to purchasing one of these virtual currencies is selecting an exchange platform. Basically, the exchanges are online marketplaces where you can buy coins and can also exchange bitcoins for assets like U.S. Dollars. Among the most popular exchanges are Bitfinex and Coinbase. To make entry to the marketplace easier, you will be able to purchase a fraction of a Bitcoin. You can also buy altcoin assets but it’s necessary to pay for those purchases with Bitcoin or Ethereum. There are even Bitcoin ATMs across the world so you will have quick access to cash if you need it.

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Adeline Gibbs

Adeline Gibbs is a writer and a vital contributor to Tokenhell. She always stay up-to-date with latest happenings in crypto world.

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