So you have been following the cryptocurrency market for a while not, but have not yet taken the first step towards becoming a cryptocurrency trader. What is holding you back? Lack of information? Doubts about your skills? There is a lot going on in the space, so it is perfectly understandable that many are still hesitant. Let us have a look at some of the things you should consider before starting to trade.
Decide on a cryptocurrency
Step one is, of course, to decide on which cryptocurrency token you should invest in. With over 1,500 different kinds of tokens in circulation, this can be a difficult decision to make. You could, of course, play it safe and invest in Bitcoin and Ethereum, as they are popular and have stood the test of time. However, these are quite expensive, so you might want to consider investing in some of the newer tokens. New tokens can be more volatile than more established ones, but can also offer much more return on your investment. Reading about new ICOs is a great way to not only discover new emerging cryptocurrency tokens but also find out about interesting platform developments. When assessing an ICO, you will want to look at the team that is behind it, what idea they have or what problem they are trying to solve, and then gauge what the rest of the market thinks about them.
Decide on your type of investment
There are many ways you can invest in cryptocurrency, so devising a strategy for how you should approach the market is a good next step. Some traders are in it for the long haul and are not afraid to hold on to their cryptocurrency tokens for long periods of time. This you like playing the waiting game, then this method could be for you. If you are less patient, you might want to consider short-term investments. There are pros and cons to each method. Long-term investments can generate huge profits over time, but it takes just that — time. The benefit here is that you will not have to pay very close attention to small movements in the market, but only the broad strokes. If, on the other hand, you want to invest short-term, you will have to pay close attention to changes in the market. Short-term investment can get you paid quickly but in small amounts.
Do you research
As with everything in life, doing your homework on the cryptocurrency market is important before diving in head-first. Pay attention to the market trends for the cryptocurrency token you have decided on investing in. Is it volatile? If so, how much? Has it always been fluctuating, or is it just in a transitionary period? In addition to numbers and graphs, it is also worth spending some time on reading what others say about the token or ICO. Trust is a big factor in the cryptocurrency space, as it is in any other trading industry. If people do not seem to trust a given coin or ICO, then there is probably a good reason for that.
Good luck with your first investment!