One major rule when it comes down to the cryptocurrency ecosystem is Do Your Own Research (DYOR), this means that one should never rely on information from one source to be the truth. For starters, be well informed in what you are about to throw your finances into. Investing in cryptocurrency could be quite risky, though it’s the best way to branch out your investments. Therefore to make an informed decision on this high risk investment, careful research and analysis are paramount and one should never risk or invest more than they can afford to lose.
There are many cryptocurrencies (altcoins) out there, and different altcoins have different benefits and risks. Some altcoins have their own Blockchain such as Bitcoin while others use pre-existing network.
Wondering what a Blockchain is? Well Blockchain is a of database with unique rules on how data can be added in structures called blocks, that secure the data from any alteration in any way whatsoever. Data added cannot be changed but just updated.
With so many different cryptocurrencies one can be stuck on which one to trade or invest in, not forgetting the many scams that are there in this field. So once again remember your due diligence is key here. Some may choose to diversify their options and reduce the risks. And how can one diversify? This is done through Asset diversification, which involves investing or trading in more than one cryptocurrency. This primarily prevents you one attracting huge amounts of loses in cases where a certain cryptocurrency may collapse.
So should one invest or trade?
These two options are often confused and one may end up taking a route that was not intended. Whether to invest to trade majorly depends on what you want to buy.
Investing, which involves picking an asset or assets and holding on to them over a long period of time, requires minimum time to commit to it, however the risks involved are quite high. On the other hand trading, which involve making short or medium profits or gains through frequent buying and selling, requires a lot of time and commitment.
As a trader, one needs to understand the market very well and develop complex trading strategies. This require a lot of practice. They also need expertise on how to handle significant amounts of losses if any occur.
Investing should be the appropriate direction for new comers in this world as minimum loses are experienced when investing. While investing one should consider the viability of the project. Short term price changes should not be a bother to you but consider the gains in terms of years. However if you want maximum profits within a short time then consider trading, but first do your research properly. Some may choose to trade and invest all at the same time. This highly depends on one’s strategy, profile and risk tolerance. The decision is primarily up to you, but remember, never risk by investing or trading with funds, or more than what you cannot afford to lose.
Some of the strategies one can use when investing or trading crypto are holding on to cryptocurrencies or selling them or buying more. If one chooses to hold on to the crypto, there are accounts such as the Binance account that one van use to keep their crypto and later on transfer them to other external crypto wallet.
As mentioned, short to medium-term price changes aren’t so important when investing. In general, long-term investment is more concerned with the intrinsic value of a coin or project, which relates to assessing the potential of an asset based on the projects viability, including its utility, whitepaper, team, development, management, marketing, reputation, long-term goals, and other factors.
If you wondering on which altcoin one can invest in, you might want to consider World Causecoin (CAUSE), which is a peer-to-peer digital currency built on the foundation of Cause Capitalism, which finances cause projects across Africa. How is this achieved? For every World Causecoin (CAUSE) bought or traded, 2% is contributed to non-profit partners across Africa to help finance charitable projects. The key non-profit partners include Africa Children Hospital which will build several maternity and children hospitals across Africa; The Goat Foundation which is giving a pair of goats to poor widows across Africa starting with Kenya; Food for Africa which will provide free agricultural education to farmers to help improve their production and learn value addition. Am sure you would want to participate in a cause action and help create abundance for all.
It takes some time to learn how to invest or trade cryptocurrencies. Improving your knowledge is a good way of reducing your overall investment risk, leading to more informed decisions. It’s easy to panic-sell an asset based on emotion, but the chances of this happening are much lower when you study up on investment and trading
