A Quick Guide to Crypto Investing for New InvestorsJan 28, 2021, 6:22PM
Crypto investing is a relatively new method of investing. Instead of investing in stocks or bonds, people invest in various cryptocurrencies.
There are many types of this currency, with the best known being Bitcoin. Crypto investing is very different than the average type of investment, as it involves different methods of transactions and use of the blockchain. As noted by the experts at SoFi Invest, added security is needed to protect this relatively volatile investment: "Before you purchase crypto through SoFi Invest, it is important to understand the volatility of its value, and therefore its inherent risk."
All of this has many people asking, "How do I buy cryptocurrency?" Here's a quick guide to give you the answers to these important questions.
What Is Cryptocurrency?
A cryptocurrency is a digital form of currency. It is bought and sold in digital exchange methods. Like any other form of currency, it's value rises and falls based on a variety of factors. Many people use exchange rates and invest in foreign currencies in order to earn a return on their investment, but cryptocurrency is different from your average form of foreign currency. This is for many reasons. First, cryptocurrency works via the blockchain, a decentralized technology that is spread across vast networks of computers in order to make it essentially impossible to hack or manipulate the records of who owns what sort of cryptocurrency. Indeed, it's security is one of the main appeals of cryptocurrency. While Bitcoin is the most popular and well-known form of cryptocurrency, there are many other types. Right now, there are over 6,700 cryptocurrencies that are publicly available. They also contain a huge value: As of the end of 2020, the entire market capitalization of all cryptocurrencies was more than $640 billion. The decentralized nature of cryptocurrency - combined with the unique method in which they can be bought and sold - makes cryptocurrency a highly disruptive form of currency. Its value is not controlled by a central bank, and for many, this is a highly appealing aspect.
How can I Buy Cryptocurrency?
There are many different websites that allow you to purchase and sell cryptocurrency. You should evaluate all of these websites carefully in order to ensure that they are properly protecting your financial information and various assets. Once a purchase has been made, that information is stored on the blockchain.
There are many different places to purchase cryptocurrencies. One such example is Tastytrade, a website that allows you to purchase many forms of stocks, bonds, and cryptocurrencies. If you're interested, you can also trade options and take a variety of finance courses that are designed to increase your comfort level with all of these financial tools. Tastytrade also has a variety of financial information available that will allow you to research financial information and make you a more informed investor.
What types of Cryptocurrencies are Available for Purchase?
The most popular and well-known type of cryptocurrency is Bitcoin. At the moment, one Bitcoin is worth almost $35,000. However, you must realize that Bitcoin is not the only type of cryptocurrency on the market today. Indeed, there are several alternatives, and in many cases, these alternatives may make for a better purchase, depending on your investment strategies and tolerance for risk. Other forms of Cryptocurrency include Ethereum (ETH), Litecoin (LTC), Cardano (ADA), and Polkadot (POT). Since the area is so new and the technology and legal systems that regulate the trade of Bitcoin are still evolving, it is worth noting that these are very unlikely to be the only coins available on the market today. Indeed, it is highly likely that more coins will emerge to satisfy a variety of different investing needs. Furthermore, like stock and bond purchases, Cryptocurrency can be purchased via a number of apps. This makes it easy to make a purchase and increases the odds that more and more people will become involved in this area.
Cryptocurrency is still relatively new to the market. However, making Cryptocurrency purchases is getting easier by the day. Just make sure you fully understand what kind of investment you are making before you actually make the purchase.
Disclaimer: information contained herein is provided without considering your personal circumstances, therefore should not be construed as financial advice, investment recommendation or an offer of, or solicitation for, any transactions in cryptocurrencies.