Cryptocurrency has become a popular topic in the investment community, as more and more people want to participate. If you're familiar with the cryptocurrency world, but want to learn more about how to begin investing, this article is for you.
In this article, we'll discuss the fundamental principles of cryptocurrency investment and introduce you to Nonbank, a reliable digital wallet that can facilitate your beginning in the cryptocurrency investment field.
Firstly, let's understand what cryptocurrency is.
Cryptocurrency is a virtual currency that is based on cryptography, which makes it highly trustworthy and resistant to fraud. Bitcoin, Ethereum, Litecoin, TRON and other digital assets are incorporated into this growing landscape of digital assets.
A cryptocurrency is different from a cash currency. The latter incorporates paper money and metal coins, but the cryptocurrency employs a virtual currency called a "coin", "token" or "unit". You can purchase a "coin", "token" or "unit" from any company that facilitates cryptocurrency transactions, you can also exchange these for cash or another cryptocurrency.
Additionally, the unique characteristics of cryptocurrencies (beside the fact that there is no physical cash) are that they are decentralized. There's no single entity that controls the currency. For instance, the Federal Reserve is in charge of the national currency of the U.S. and has a role in price regulation, interest rate determination, and the total amount of money in circulation in the country. Cryptocurrencies lack any oversight.
If you're prepared to begin investing in cryptocurrency, there are a few steps that you need to take.
Before making any investments, learn about the market itself. Research different cryptocurrencies, their intended uses, technology, and the blockchain itself. Understanding the fundamental concepts is pivotal in making accurate investment decisions.
We encourage you to read more posts in our blog section or find information on the following trusted websites:
- Investopedia's Guide to Cryptocurrency;
- CoinDesk Cryptocurrency News;
- CryptoSlate Cryptocurrency News.
Select a trustworthy cryptocurrency platform (with a user-friendly interface and extensive security features), where you can buy, sell, and keep your digital assets. We recommend starting with CEX and Nonbank (as CEX may be integrated in the future).
Get a digital wallet that safely stores your cryptocurrency. Wallets are available in various forms: hardware, software, paper etc. Nonbank digital wallet is considered to have a high degree of security, allowing for long-term storage.
Diversity is essential to dealing with risk in any investment. Buy different cryptocurrencies to diversify your risk and maximize your return. Bitcoin is perhaps the most well-known of the cryptocurrencies, but other cryptocurrencies have unique attributes and potential for growth.
If you are new to the investment industry, begin with a small investment. The cryptocurrency markets are highly unstable, and it’s most effective to begin with a quantity that you can lose comfortably. It's more of a learning opportunity than a guaranteed revenue.
Cryptocurrency investments often require a long-term perspective. Volatility can cause large changes in the market, so be ready for periods of high and low prices. Avoid quick decisions based on the short term movement of the market.
Keep track of the latest cryptocurrency information, market shifts, and regulatory changes. Join online communities, observe experts in the industry, and read trustworthy sources in order to stay aware. Understanding the dynamics of the market is essential.
Establish boundaries and have a plan of exit. Figure out how comfortable you are taking risks and set parameters for both gains and losses. Avoid taking on more of a risk than you can comfortably handle.
The cryptocurrency space is not sheltered from frauds. Be cautious about scams, phishing attempts, and promises of guaranteed profits. Always do your research before making an investment.
Consider seeking advice from financial advisors or experts in the cryptocurrency investment field. They can offer guidance and insight, especially in the ever-increasing world of digital resources.
These experts can be:
- Vitalik Buterin (Co-founder of Ethereum) - follow Vitalik Buterin on Twitter;
- Anthony Pompliano (Co-founder & Partner at Morgan Creek Digital) - follow Anthony Pompliano on Twitter;
- Andre Cronje (DeFi Developer & Founder of Yearn.Finance) - follow Andre Cronje on Twitter.
This list is not exhaustive, so feel free to conduct your own research on DeFi and cryptocurrency experts.
Several advantages of cryptocurrency investments are obvious.
One of the most attractive features of the crypto market is the potential for high returns. Although cryptocurrencies are highly volatile, they have also historically provided high returns, depending on the time of purchase. However, it is important to understand that past performance is in no way a guarantee or indication of future results.
Additionally, the decentralized nature of cryptocurrencies is also an advantage of crypto investments. Cryptocurrencies were designed to be decentralized without the control of a single government or central bank. Users have full access to their assets, but also take full responsibility for their security.
Similar to any other form of investment, there are risks associated with taking a cryptocurrency investment.
The greatest risk that users may encounter are the extreme volatility of the crypto market that occur on short periods of time. The cost of crypto has demonstrated to be highly unstable, which means that it changes frequently and has its highs and lows. While trends are usually reversible, several factors can cause price fluctuations (cryptocurrency supply, market demand, availability, competing cryptocurrencies, etc.).
To mitigate this risk, you must always diversify your portfolio of investments across different cryptocurrencies and other types of assets. Diversification can reduce risk and minimize potential damage, which has a more consistent effect on your investment approach.
Unlike custodial wallets that involve a third party, non-custodial wallets grant you full control over your personal keys and assets. This distinction is important in the cryptocurrency world, as it conforms to the basic philosophy of cryptocurrencies: decentralization. Control over your personal keys requires you to keep and safeguard your resources. Some non-custodial wallets even utilize advanced security measures and allow you to connect a hardware wallet to your digital wallet in order to protect the private keys and transactions associated with them. One of such wallets is Nonbank. In future releases, users will be able to connect both custodial and non-custodial solutions, but for now, non-custodial features are available.
Nonbank is an excellent option for those who want to invest in crypto. Its features and consistency are reasons for its upcoming popularity. After its launch it will provide superior security measures that are going to keep your assets safe (i.e. AML Watchtower, assets analytics features and the opportunity to connect a hardware wallet to your Nonbank wallet), along with an intuitive and user-friendly interface with Spaces that facilitates the multi asset management of your investments.
Other advantages of Nonbank include support for multiple cryptocurrencies. However, Nonbank will work with a limited number of cryptocurrencies at launch, but in the future it will provide users with the ability to manage multiple assets in one app. This will eliminate the complexity of transitioning between different assets in different wallets, making Nonbank a simple to use all-in-one solution that allows you to diversify your portfolio and explore different opportunities for investment.
Cryptocurrency investments can be considered an exciting and potentially profitable venture for those new to the field. By utilizing the appropriate digital wallet like Nonbank, you can safely store and manage your assets.
