When bitcoin was still in its infancy, few wanted anything to do with it. It took over a year before the premier cryptocurrency garnered enough attention to appeal to notable investors. Today, bitcoin has grown to become one of the most liquid and valuable assets available.
However, bitcoin is only one among thousands of other cryptocurrencies available on various exchanges today. If you want to invest in cryptocurrency, consider adding some of these alternative digital currencies to your portfolio.
So, how do you choose the right cryptocurrencies? How do you get your hands on the cryptocurrency of your choice? What can you do with the cryptocurrencies you purchased? Continue reading to get all your questions answered.
Choosing the Right Cryptocurrency
As already established, the number of cryptocurrencies available is immense. What should you look for in a cryptocurrency before you decide to invest in it?
1. Market Capitalisation
Market capitalization is the total market value of the equity in a publicly traded asset. Simply put, it is the total value of the cryptocurrency in circulation. Choosing cryptocurrencies based on their market cap is an easy way to find a cryptocurrency with potential. Bitcoin has the highest market cap of any cryptocurrency, and it is followed by Ethereum. These two coins make up more than half the total cryptocurrency market cap. This strongly indicates that both cryptocurrencies should be considered in your portfolio.
2. Total Available and Current Supply
Find out how much of the cryptocurrency has been mined and how much can still be mined. For example, out of the 21 million bitcoins that can ever be mined, 19.8 million are already in circulation. The implication is that bitcoin’s value might skyrocket due to scarcity. Therefore, check the current supply of your chosen cryptocurrency and the total supply to get an idea of how valuable it can become.
Also Read: Selecting The Ideal Crypto Platform!
3. White Paper
White papers are a tradition in the cryptocurrency world; every crypto investment has one. These show the purpose of a cryptocurrency, the underlying technology, its roadmap, and other information about it. A white paper will show you the cryptocurrency’s plans. It also serves as a guideline for you to know how well the cryptocurrency is achieving its goals.
4. Use Cases
How will the cryptocurrency be used in real-life situations? For example, bitcoin can be used to purchase physical merchandise ranging from wristwatches to cars; it can also be exchanged for fiat currency on some exchanges. These are some use cases for bitcoin. Some cryptocurrencies, like meme coins, for example, are created as jokes without having real functions. The use cases of a coin are usually outlined in the crypto’s white paper, another reason you should check it out.
Where Can I Buy Cryptocurrency
Cryptocurrency can be bought and sold in many ways. But since we’re assuming you’re new to cryptocurrency and are getting crypto for the first time, we’ll only discuss how to buy. You cannot buy crypto at the bank, at least for now. The most popular platforms for purchasing cryptocurrency are cryptocurrency exchanges, and they are essential tools if you want to get into cryptocurrency. All exchanges are not created equal, so you should try your best to find one that offers fair rates, fast transactions, and maximum security.
How to Invest Your Cryptocurrency
You’ve finally gotten the cryptocurrency you wanted. Well done! But what do you do with it? Do you just leave it chilling in your crypto wallet? You could make money this way if you sell it in the future at a higher price. You can also make money by staking your coins. This requires you to keep your coins in your wallet and get rewards for it; think about the interest you get on your credit balance. Crypto trading is another avenue for generating a profit from cryptocurrency. You speculate on the future prices of the cryptocurrency, and you get rewards for correct predictions.
This article is an abridged form of how you can get into the cryptocurrency game. However, how do you stay in the crypto game? By constantly learning and evolving your strategies. The crypto market is still being developed, and you need to stay abreast of these developments if you want to play a winning game.
Also Read: Top Tips To Succeed In Cryptocurrency World