Three Tips for Making Your First Cryptocurrency PurchaseBy Angelica Malin
Cryptocurrencies have been in the news a lot lately, so you might wonder whether now is the right time to buy them for the first time. While digital money has gone mainstream in the last couple of years, there are still a few points to consider that not every newcomer to the subject is aware of.
Choose a Token
Bitcoin is almost certainly the token that you’ve heard most about recently. This currency has earned countless headlines due to its price volatility, the celebrities who support it and the many price predictions made for it. You’ll see many blogs and websites dedicated solely to this currency, yet it’s far from being the only cryptocurrency you could decide to buy.
There are hundreds of different tokens that you could buy on crypto exchanges, with Ethereum, Tether, Cardano and the Binance Coin among the biggest. Some of these coins carry out a specific purpose, such as letting you access a certain platform or being able to earn interest by lending it to others, while others are general-purpose currencies for investing or sending money.
Consider Whether You Want to Use, Trade or Invest
One reason people buy cryptocurrencies is to use them, whether it’s to send money abroad cheaply or buy things safely online. The other big reason is to try and make money thanks to the price swings that they often undergo, which means that the value of your coins can change greatly in a short space of time. However, what if you plan to try and make a profit on them? The key here is to understand the differences between long and short positions in any type of trading.
If you think the token will rise in value over time, you will want to buy and hold it, which is called a long position. If you think the price will fall, trading on a short position means selling the asset and buying it back at a lower price later. Contracts for Differences (CFDs) are commonly used to speculate on future price changes for currencies, shares and other types of assets in this way. This doesn’t have to be on just crypto, and positions can be placed on stocks, commodities and other financial instruments.
Keep Your Tokens Safe but Accessible
Cryptocurrencies are regarded as being extremely safe thanks to the fact that it’s virtually impossible for anyone to hack into your wallet. However, you still need to be careful when making this transaction, and that starts with using one of the most reputable crypto exchanges to buy the coins.
After that, you’ll want to choose the type of wallet that best suits you, with the choice between hot and cold wallets the first step to take in this respect. You then need to consider how to keep your password safe so that no one else can find it but remember up to a fifth of all Bitcoin has reportedly been lost due to users losing access to their own wallets.
By taking all of these points into account, you can confidently enter the cryptocurrency world and find out whether this new way of handling money is right for your lifestyle and financial needs.