Whether it’s the very idea of cryptocurrencies or diversifying their portfolio, people from all walks of life are investing in digital currencies. If you’re unfamiliar with the concept and wondering what’s going on, here are some basic concepts and considerations for investing in cryptocurrencies.
What cryptocurrencies are available and how do I buy them?
With a market capitalization of around $278 billion, Bitcoin is the most established cryptocurrency. Ethereum is second with a market capitalization of over $74 billion. Besides these two currencies, there are a number of other options including Ripple ($28B), Litecoin ($17B) and MIOTA ($13B).
Being first to market, there are many Bitcoin trading exchanges around the world. BitStamp and Coinbase are two well-known US-based exchanges. Bitcoin.de is an established European exchange. If you are interested in trading other digital currencies along with Bitcoin, then the crypto market is where you will find all digital currencies in one place. Here is a list of exchanges according to their 24-hour trading volume.
What options do I have to store my money?
Another important consideration is the storage of the coins. One option, of course, is to store it on the exchange you buy them from. However, you will need to be careful when choosing an exchange. The popularity of digital currencies has led to the emergence of many new, unfamiliar exchanges everywhere. Take the time to do your due diligence to avoid scammers.
Another option you have with cryptocurrencies is being able to store them yourself. One of the most secure options for storing your investments are hardware wallets. Companies like Ledger allow you to store Bitcoins and several other digital currencies.
What is the market and how can I learn more about it?
The cryptocurrency market fluctuates a lot. The volatile nature of the market makes it more suitable for long-term play.
There are many established news sites that report on digital currencies, including Coindesk, Business Insider, Coin Telegraph, and Cryptocoin News. In addition to these sites, there are also many Twitter accounts that tweet about digital currencies, including @BitcoinRTs and @AltCoinCalendar.
Digital currencies aim to disrupt traditional currency and commodity markets. While these currencies still have a long way to go, the success of Bitcoin and Ethereum has proven that there is real interest in the concept. Understanding the basics of cryptocurrency investing will help you head in the right direction.