5 tips for getting started with crypto investing
Crypto trading is a great new addition for retail investors. Launch your portfolio in this digital asset field today
Cryptocurrencies offer a fantastic space for investors looking to grow new and exciting asset classes within their portfolios. Crypto investing works in much the same way that trading stocks, bonds, or commodities do, with the added caveat of a 24/7 marketplace and the digital decentralization that makes crypto coins like Bitcoin (BTC), Ethereum (ETH), or Ripple (XRP) a unique asset for US citizens and other traders to hold.
With these five great tips, breaking into the cryptocurrency market can be made far easier for the investor looking to lock in great price action with Litecoin, Ethereum, and many of the thousands of other unique coins and tokens that exist in the world of blockchain technology and digital assets.
1. Choose a low-fee cryptocurrency exchange to handle your trading volume.
Fees are a significant consideration for any trader—in the cryptocurrency market or any other trading space. Choosing an exchange that provides a low fee structure while giving you the best blend of features and research that you’ll need in order to make smart trades is a crucial aspect in creating a successful trading strategy.
2. Chase after additional financial services to augment your digital assets.
There are a number of crypto friendly banks that are getting in on the action in the current climate as well. With an ally bank institution in your corner, making the seamless transition between your crypto assets and fiat currency holdings can be simplified for better cash flow consideration.
In the United States, crypto banking is just starting to take root, but keep your eyes peeled for greater crypto-friendly bank offerings in the future. As cryptocurrencies become more mainstream over time, financial institutions will continue to offer more plugins and inclusions for consumers when it comes to digital assets beyond the typical financial services.
3. Don’t forget the tax burden.
As with any new investment opportunity, there comes a tax implication in the buying and selling of crypto assets. With a crypto calculator, you can easily quantify the difficult calculations required to understand the fiat value of your investments and the tax burden that you’re obligated to pay during any given tax year. This is an important consideration for anyone who is serious about trading cryptocurrencies because the portfolio value will often be thought of in Bitcoin rather than dollars (U.S., Canadian, or Australian, for instance).
Making sense of the tax implications is your obligation as a taxpayer, of course, but if you’re doing the accounting on your own it can be tough to compute.
4. Remember the importance of high-quality research.
The research time you put in while looking for new investments doesn’t go away when transitioning into the crypto marketplace. In fact, there may be a higher need to engage in great research when approaching this market than many others. Cryptocurrency pricing moves quite rapidly and it relies on real-time information that affects the decision-making processes of investors and long holders alike. Understanding the market drivers and other data that will help you select great trading opportunities is crucial here.
5. Consider staking as a hedge against price volatility.
In the crypto sphere, the ability to stake tokens or coins and earn daily interest is a departure from other investment opportunities that exist in the stock market or elsewhere. This is a great option for those looking to secure their assets against a sudden price dip. By using crypto like a savings account as well as a trading portfolio, you can build long-term security that will see you through anything the market can throw your way.
Crypto trading is a great new addition for retail investors. Launch your portfolio in this digital asset field today.