Investing in Cryptocurrencies

At the time of writing, the crypto market capitalization was $2.39 trillion and the average daily trading volume was $100 billion. There are already more than 100 million cryptocurrency owners worldwide and their number is growing. Many of them are concentrated in the CIS and Europe. In Ukraine, more than 5.5 million people own cryptocurrencies. In percentage terms, this is more than in the US.

This data shows that cryptocurrencies continue to gain popularity, which means that many people still want to make money from them.

Crypto investors and crypto traders: what is the difference

Crypto investors are often confused with traders. In fact, these are different concepts.

A trader is a person who buys or sells financial assets via cryptocurrency investment companies. In our case, these are cryptocurrencies. A trader trades on crypto exchanges and invests for a short period of time. To be successful, you need to treat trading as a full-time job.

The main advantage of trading over investing is that you get money virtually every day and can dispose of it immediately.

An investor choose best cryptocurrency to invest for the long term. That's not the only difference. An investor also has a broader list of investment options - from the trivial purchase of bitcoin to ICOs and mining. Unlike a trader, an investor needs to understand where the market is going, form a strategy and stick to it, keep an eye on the projects in which he invested.

For example, we buy bitcoin and hold it for six months. Then we plan to exit the market at about x-price and there we will re-buy on lower rate and wait for the growth. This is a simple enough strategy, don't take it as financial advice.

Cryptocurrency investment companies work more calmly than traders. It's just a matter of investing and waiting. Without a clear strategy and control an investor will not make money. Plus, it is worth understanding that the money is invested in the project today, and the profit will be only in six months, a year or even five to ten years.

The only general rule for both traders and investors is that there is nothing to do in the crypto market without knowledge. It is too risky and will probably end up losing money.







How to invest in cryptocurrencies

As mentioned above, because of the risks involved in investing in cryptocurrencies, you need a well-thought-out strategy. There are many approaches to start investment in cryptocurrencies. One of them looks like this:

  1. Conservative - buying stable and time-tested coins. Among them - bitcoin (BTC), ether (ETH), Cardano (ADA), Solana (SOL). This is a long-term crypto investment.

  2. Medium - cryptocurrencies with potential, but with high rate fluctuations. This category also includes promising, but little-known projects. For example, you like a game, platform, or other product from the development team. It could even be the tokens of your favorite soccer club.

  3. Ultra-risky - you buy cryptocurrency and tokens that you highly doubt. These could be projects that have released news about their revolutionary product, have a fast-growing rate, or are actively promoting themselves online. Here you can risk a little more, because you allocated a small part of your deposit.

If you choose correctly what to invest in, you can double or triple your investing in cryptocurrency. What projects to pay attention to and what to keep in mind when investing in cryptocurrency, we will talk in the following materials.