This is a short, and to the point guide on how to get started trading in Cryptocurrencies. Wether it's Bitcoin, Ethereum, Ripple, Litecoin or any other coin that you are interested in, you may find some useful information here.
Buying Cryptocurrencies
When you first want to get started with cryptocurrency, you are going to want to aquire some coins. You may have heard about mining for coins, but unless you are experienced and knowledgable it is not recommended that you start here and it is likely to make you a loss. The easiest way to get into cryptocurrency is by investing a small amount of money in it and buying some via the age old adage: Buy low, sell High.
Where and how to buy
There are many exchanges on the internet, and even more cryptocoins to choose from. I recommend that you use one of the bigger, established exchanges on the internet. Some examples of these are:
You will have to sign up to one of these, or more, exchanges with an account. Because actual money and value is involved you will usually have to provide some personal information, which is to avoid money laundering. The above mentioned exchanges are generally considered safe and trustworthy, up to a certain extent (a hack or disaster can always happen, of course).
On some exchanges like Kraken you can deposit money by bank transfer. Others only trade in Bitcoin and other digital currencies, which means that you will likely have to purchase the coins elsewhere first and transfer them to the exchange.
Once you have deposited money such as US dollars to an exchange, it will be converted into USDT. These are not exactly dollars, but act as an intermediary between dollars and digital money. For all intents and purposes, you can view these as 'regular dollars'. In reality, they aren't regular dollars until you take them out of the exchange, though.
Setting up wallets
Before you can have digital currencies on an exchange, you will usually have to generate Wallets for your account to hold them. You will usually find a button named 'Wallet' which you can click and it will open up a screen with all your Wallets. This will let you enable the wallets per cryptocurrency that you are interested in.
Wallets usually consist of a long string of numbers and characters, similar to how generated passwords look. This is your wallet adress. You can see this adress similar to an e-mail adress. Anybody who sends the corresponding cryptocurrency to this adress, will deposit funds in your wallet. And when you send currency via this wallet, it will show this adress as the sender.
Once you have enabled the wallet of the cryptocurrency of your choice, you can start receiving funds in them.
Buying cryptocurrency
Wether you are buying coins with dollars, or with a digital currency, the process is the same. You will likely either have USDT or Bitcoin (BTC) or possibly Ethereum (ETH) on your account now and you are ready to buy.
How to determine which coin to buy? Do your research!!!
This sounds complicated but does not have to be. DO NOT blindly invest and think that ALL coins will go up and have use. People have smelt money and there are many, many, many worthless coins.
Some websites that may help you determine what to buy:
- www.coinmarketcap.com This lists the biggest cryptocurrencies, shows their worth, trading volume, etc.
- www.poloniex.com Even though i don't trade there, I do follow the prices on it because it's one of the easier sites to navigate
- www.coindesk.com Crypto news
- www.cointelegraph.com Even more crypto news
- www.cryptoking.org A site that fetches all the latest news from various news sites
- www.bitcoinwisdom.com Follow Bitcoin's price (and LTC) live. When BTC goes up or down, everything else usually follows
I would recommend new investors against investing in anything below the top 20 biggest coins. Most of the top 20 coins have some merit and probable future. Below the top 20 it becomes more risky and you had better do some really good research first.
Many new investors heard about Bitcoin and it's price increase and want to jump on board. I would advise to carefully consider this. I do think Bitcoin will inevitably keep going up, but I feel this way about many other cryptocurrencies also. The question then is not of wether it will go up, but by HOW MUCH. And when you consider that, it takes quite a lot for Bitcoin to double in value, while for other cryptocurrencies you would get massive gains even if they would only be 10% as popular as Bitcoin.
Picking the right moment to buy
Don't just buy as soon as possible! Investigate the price history of your chosen coin. Look at the highs, and also look at the lows. Usually you can detect some kind of pattern. You might find that everytime the price drops, it doesn't go below a certain point. And you might see that it keeps hitting a certain price, and then dropping. Do you see a long term upward trend, or does it slowly go down over time? If something has recently risen very high, there is usually a significant downward price movement afterwards.
My advice
My advice, and also my current gameplan when it comes to cryptocurrency, is to buy in and then HOLD (in the crypto world, we call this 'HODL'.. which is basically a misspelling of 'hold'). Accept that any money you put in might go up in smoke. Accept that you buy in today, and tomorrow you may be down 20%. Keep faith, hold your coins. Look at the history of Bitcoin, and look at how often it has peaked, crashed and died. Bitcoin was declared dead a thousand times over over the years. Yet it is still here, and stronger than ever. Don't let people tell you about the dot-com bubble either. Go look at the graphs, and notice how several years after the dot-com bubble burst, the value had climbed right back up and surpassed it, just like how Bitcoin surpassed it's previous highs this time.
And remember, you have not made a loss, until you actually SELL and take your loss. Only because I was stubborn, and did not succumb to fear, that I did not sell my BTC last year, and look at the gains we have now.
Blockchain isn't going anywhere. Cryptocurrency is growing and will only grow further I believe. I think pretty much every cryptocurrency in the top 20 is going to go up, the only question is: Which is going up the fastest?
I hope this guide will help some new investors to get started! If you've got suggestions or ideas on which cryptocurrencies you'd like to invest in, feel free to post them in the comments! I also have a blog which details my journey into the crypto world step by step, including all my investments and how they panned out. Learn from my mistakes and experience, and take a look and perhaps follow! https://steemit.com/@pandorasbox