If you are just starting their venture into the digital assets industry, there are some things you should be aware of first. There is a process in place and several steps to be considered, so you can gain proper exposure to cryptocurrencies.
Because prices are moving up and down aggressively, there are many who are afraid of buying and selling these digital tokens right now. On the other hand, exchanging crypto has become very accessible. Nevertheless, that should be done with caution and awareness. Let’s take a look at some tips for anyone who wishes to enter this fascinating sphere, but is concerned about how it operates.
Crypto prices are volatile
Like any other emerging industry, stability can’t be used to characterize cryptocurrency prices. The past decade saw the market going through booms and busts, but overall, valuations have been moving up.
Right now, Bitcoin is plummeting, and based on exchanges like Bitnomics, the price is much more affordable right now for anyone who is interested in selling fiat for crypto. However, despite a sharp retracement from all-time highs, it does not mean there’s only upside potential ahead. Volatility is expected to remain elevated and that raises a lot of challenges for those who wish to allocate capital to crypto.
Working with an online exchange
One of the most affordable and accessible ways to buy/sell crypto is by using an online exchange platform. Brands like Bitnomics allow users to sign up for an account and then exchange fiat into crypto or vice versa, at attractive rates.
The offer, in terms of exchanges, has increased over the years, but you should only work with a company that is licensed, in order to ensure your financial security and privacy.
You need to have a crypto wallet
To hold cryptocurrencies, you must have a crypto wallet, there’s no way around it. Not all exchanges offer these wallets, so you might have to set up one on your own. Rest assured, though, since there are plenty of guides on the internet, which explain exactly how to do that.
It’s possible to store crypto in hot or cold wallets, and thus important to know the difference between them. Hot wallets are online solutions, storing information on servers. Cold wallets generally store crypto without being connected to the internet, offering a higher level of protection.
Both wallet categories come in hand with pros and cons, and the best option is to actually hold both. For example, you can use the online wallet for actively exchanging crypto, as the market creates more opportunities, and the cold wallet as a place for keeping crypto that is not yet intended for exchange.
Global demand is influenced by several factors
Crypto price fluctuations are not random, but rather influenced by multiple variables. Regulatory fears, the performance of major fiat currencies such as the US Dollar, broad risk appetite for volatile assets, and economic expansion/contraction are just a few to note.
With that in mind, you need to monitor these factors, because it can put you in a better position to understand price movements and then spot price areas where buying/selling crypto can potentially generate returns in the longer run.