If you want to know how to invest in crypto currency, it is better to find out a little before acting. Better Living Your Money takes stock.
Although past performance does not bode well for future performance, the crypto market undoubtedly has attractive investment opportunities. It is not yet too late to take the bandwagon, there are so many innovations. However, you have to be vigilant and get information well before investing as this asset class is volatile. Overview to invest well in crypto currency without leaving its woolen socks.
Start with the least volatile crypto currency
Why not start with stil coin ? As the name suggests, it is a crypto currency that is not subject to variation and that perfectly conjures up the high volatility of other cryptos. Indeed, it is not uncommon, when the market is Bearish, (that is to say, downside), to see a crypto currency drop by 20% in a single day. If you have a stable dollar-backed corner, for example, you imperfectly secure your digital assets. Conversely, if the market continues to soar, you will not benefit from the capital gains inherent in the upheavals of the markets during the Bullish period (upward periods). Your course will remain stable.
There are mainly three types of stal coins: the “FIAT stale coin” (FIAT is assimilated to the dollar or the euro) ; the “unsecured stalecoin” (that is to say supported only by its value, thanks to a “smart contract”, a contract structured by the Blockchain) ; and the “stable coin crypto-collateralized”, backed by a strong crypto currency, like bitcoin.
If this crypto currency offers few surprises, it allows you to invest the (a little more) quiet mind. Be aware that in general, seasoned private investors use it a bit like a waiting room while waiting for a market opportunity (after a drop, for example). , Stable coin provides security and prepares for integration into the real economy in the short term through traders, who will soon accept it in their payment systems.
Invest little and diversify…
After arousing much reluctance in the leafy world of finance and banking, institutional investors have now integrated digital currency. This makes it essential, to the chagrin of the central banks, which are now thinking of creating their own corners, with considerable delay time. However, you have to use common sense and discernment and invest only the money you can lose.
It is therefore advisable to bet small sums at the start, in order to gradually familiarize yourself with this type of investment. For those who are more comfortable on the financial markets, but who are still a little interested in this sector, an ETF replicating the Nasdaq 100 may be the right way to invest indirectly in the growth potential of crypto currencies, NFTs and current ICOs.
Finally, and this is the corollary of this first point, it is good management not to forget to diversify your investments, so as to limit the risk in the same portfolio. Crypto has its place alongside investments such as real estate, gold, stocks, life insurance books and retirement savings, for example.
… in the rules
About twenty platforms are currently registered with the AMF. We mainly find among these Coinhouse, Paymium, StackinSat Bitcoin Avenue or Litebit. However, these are not necessarily the platforms most used by most French people. Many investors have chosen to turn to international platforms, such as Coinbase, Binance or Kraken. These are already well established, but find out what they offer – services are variable – and especially their prices. And for the others, check with the AMF those that are already on its blacklist.
At present, Binance and the French authorities are in talks for the platform to obtain its approval in France. Moreover, the famous Chinese platform has decided to invest 100 million euros in the creation of an R&D department in France dedicated to the blockchain, in partnership with France Fintech and Ledger. No doubt the beginning of a beginning of warming between the two entities.
Read Also :The Pros and Cons of Cryptocurrency
Favor an already well-known cryptocurrency
If there is a plethora of cryptos, positioning yourself on the best known also makes it possible to limit certain risks. In particular their resistance to market shocks, even the unpleasant surprises as to their functioning, sometimes very complex.
- Bitcoin (BTC): Created by the mysterious Satoshi Nakamoto, Bitcoin is the most famous crypto-currency. Since its origin, bitcoin will not be able to exceed the volume of 21 million units. This limitation leads each year to the enthusiasm of the crowds and an increase in its value in parallel, not without jerks.
- Ethereum (ETH): This is without a doubt the second most famous cryptocurrency. It is based on a decentralized exchange protocol where users can set up smart contracts. Thus a user can establish a future contract stipulating that he will buy something only under suspensive conditions, without having to go before the notary. In 2022, Ethereum should be in its 2 version, which should, if successful, enhance it very strongly.
- Solana (SOL): It’s the crypto currency that’s going up right now by coming to compete with her big sister, Ethereum with reduced fees. In addition, it has faster action times.
- Terra (LUNA): It is one of the ten largest crypto-currencies in market capitalization. Here, the idea is to supply the crypto-currency market with blockchain technology. Thus the Terra Money offers instant settlement for the merchant coupled with discounts on purchase, via his platform.
- Avalanche (AVAX): This platform deploys smart contracts via sub-networks. The crypto is ultra-fast and very ” scalable” (ability to process the most transactions without harming performance). It has thousands of producer nodes while integrating Ethereum’s development tools.