If you have little to no knowledge about cryptocurrency and you are thinking of getting in on the action, then this post is for you. One of the primary questions that plague most rookie crypto investors is where to invest? It’s a legitimate concern. Ever since the stupendous success of Bitcoin, the market has been flooded with new cryptocurrencies. While some of them might have a solid future, a lot of them are bubbles waiting to burst.
Now, if you are starting off, it’s best to choose between the two biggest cryptocurrencies out there, Bitcoin and Ethereum. Bitcoin routinely goes past $10,000 mark and Ethereum is currently hovering around $500. Long story short, these are relatively safe bets for new investors. If you want to build a cryptocurrency portfolio you should consider investing in at least one of them.
Understand the Realities
If you are a seasoned trader, then you already know how the market behaves. If you are not, here’s a crash course. The first rule of investing in cryptocurrency is to put an amount that you are prepared to lose. While no one likes to lose cash, there is no denying that the future of crypto has a certain degree of uncertainty. The second rule is to closely monitor market fluctuations. Investing in crypto is not like putting money in a slow-yield bond, where you check how your investment is doing once or twice every week. Market fluctuations in crypto are often drastic and they usually happen very fast. There have been instances where people doubled their investments in a few days. Sadly, the opposite is true as well. So, you have to constantly look at the value of the coins and keep a lookout for important Bitcoin news.
As mentioned earlier, you should start by investing in either Bitcoin or Ethereum. These are considered the blue-chip investments in the crypto world. Once you get the hang of things you will be ready to diversify and invest in other smaller cryptocurrencies.
While they are both cryptocurrencies, there are fundamental differences between Ethereum and Bitcoin in terms of their ambitions. Bitcoin thrives to be a global currency and a replacement for government-issued money. To a large extent, it has managed to take giant strives towards achieving that goal. There are Bitcoin ATMs and several countries like Switzerland and Malta are opening their doors to cryptocurrency and encouraging their citizens to trade in crypto.
Ethereum, on the other hand, has a much more ambitious plan. Ethereum wants to create a giant platform for housing decentralized apps and put Ethereum as the sole digital currency within that giant ecosystem.
Cryptocurrency was not around a decade back and with anti-crypto laws and government regulations, it’s difficult to predict its future. However, it’s probably safe to say that the crypto giants, Bitcoin and Ethereum will be around the next 5 years. This is why, if you are planning to park your money for a long time, these are the safest choices.