Mark Tencaten | A Quick Guide on How to Invest in Cryptocurrency

 Cryptocurrencies have established themselves as an important component of the current investment landscape. Investors are flocking to cryptocurrencies, devoting a portion of their wealth to them to obtain quick and significant returns. Because of its excellent returns in the past, cryptocurrency has become a popular investment option, particularly for young people.

It's amazing to realize that cryptocurrencies have more investors than the entire stock market, despite having barely existed for ten years. Because there are dozens of cryptocurrencies in use right now, they can help you generate huge profits.

Cryptocurrency investment may appear complicated at first, but it can be done in a few minutes. Here's a step-by-step guide to investing in cryptocurrencies.

1.    Recognize and allocate your financial resources

An investor must first comprehend the asset class and the requirement for investment in that asset class before making any investment. It's crucial to keep in mind that the cryptocurrency market is quite volatile. Only a limited portion of the portfolio should be committed to such risky investment opportunities.

Cryptocurrency is a medium of exchange that investors must understand. According to MarkTencaten and industry experts, investors should not invest more than 5–10% of their portfolio in digital tokens. Investing in cryptocurrency is akin to stock investing but not identical.

Many of the cryptocurrencies that have surfaced on the market over the last decade have either remained steady or vanished entirely. As a result, any investment you make could end up being worthless.

2.    Select a Cryptocurrency

The most challenging task for every crypto investor, according to Mark Tencaten, is to choose which cryptocurrency to invest in. You've probably heard of Bitcoin, Ethereum, Dogecoin, and a few other popular cryptocurrencies. Surprisingly, the world of digital tokens has almost 5,300 digital tokens. It makes the decision more difficult.

Cryptocurrency is a relatively new concept. It has only been around for a decade. Given its volume and value, Bitcoin is the most traded. It is almost synonymous with 'cryptocurrency' for many investors. Many other cryptocurrencies, on the other hand, have outperformed the top ones.

3.    Know the Cryptocurrency

Digital tokens, like any other asset type, have fundamentals. Various blockchain technologies support them, and Mark Tencaten recommends keeping an eye on accessibility, the mining process, community engagement, and intrinsic value.

4.    Select the platform to buy

Banks or investment brokerage firms do not sell cryptocurrency. These digital currencies can only be bought from cryptocurrency exchanges that specialize in them. Everyone who trades in the most popular cryptos can expect to pay a fee for both purchasing and selling.

One can purchase cryptocurrencies directly from an exchange or from a peer selling their current holdings. Investors should be aware; however, that bitcoin trading is entirely anonymous.

5.    Wallets to store cryptocurrency

Cryptocurrencies are kept in cryptocurrency wallets, which can be either hot or cold. The hot wallets have internet access, while the cold wallets do not. It's a strange and complicated procedure. This wallet is a software tool created specifically to hold the cryptocurrency rather than a physical wallet.

It keeps track of the private and public keys that link the user to the blockchain, where their cryptocurrencies are stored. They don't really store the cryptocurrencies; instead, they use public and private keys to allow you to access cryptocurrencies on the blockchain. To complete the transaction, the user must have both. They're named 'keys' because they're used to unlock the blockchain's cryptocurrencies.

Desktop wallets, mobile wallets, online wallets, and hardware wallets are all examples of digital wallets. The best wallet is one that strikes a balance between security and convenience. Users can get digital wallets from some exchanges.

6.    To make a profit, buy and hold for a while, and then sell

Cryptocurrencies are a long-term bet because of their fundamentals and the communities they support. Their use is distinct from what we've seen so far in terms of access. As a result, they should not be viewed as a get-rich-quick plan. When purchasing cryptocurrency, investors should consider their investment horizon and book profits on a regular basis.

Also, keep in mind that, in comparison to other investment options, the crypto market is still in its developing stage. As a result, new coins will enter the market, creating hype, and the excitement will evaporate. As a result, investors should be alert to such tricks. Profits should be booked as soon as possible.