A Beginner’s Guide to Crypto Investment
If you haven’t heard of Crypto investment before, you’re not alone. Many seasoned wealth managers are skeptical about this new currency, because it doesn’t fit their asymmetric risk profile and cannot guarantee 99% wealth. Nonetheless, they say you should add cryptocurrency to your portfolio as little as 10% or even 5% of your portfolio, to diversify and protect your assets. Besides, the new technologies behind cryptocurrency, such as hot wallets and cold wallets, make accessing your digital assets safer than ever.
One way to make money with cryptocurrency is to buy shares of cryptocurrency companies. There are many companies that offer stock options in cryptocurrency, including Hut 8 Mining, Nvidia, and Coinbase. In addition, you can purchase stocks in the blockchain technology itself. In 2014, two of the top 100 publicly traded companies invested in blockchain projects. Therefore, if you’re looking for a good way to invest in cryptocurrencies, you need to understand how they work.
In addition to purchasing coins, you can invest in shares of companies that accept bitcoin or invest in Bitcoin exchange-traded funds (ETFs). While these funds are risky, they can help you diversify your investments and buy shares of companies that support the currency. The most important thing to remember when investing in crypto is to choose a reputable exchange. The exchange is where you purchase, sell, and store your crypto. Many beginners will begin with Coinbase, as it is one of the biggest publicly traded companies with over 73 million users. Though Coinbase has higher-than-average fees, you can get free crypto through Coinbase Learn. It also does not allow you to extract your private key from your cold wallet, which means it will always remain encrypted and safe.
Before investing in cryptocurrencies, it is important to remember that all investments are risky, so it’s important to do your due diligence and make sure you can afford the losses. The value of a particular cryptocurrency depends on how much it’s worth at any given time. If it is worth more than its current value, you’ll profit from it. However, because Bitcoin is so volatile, you should be prepared to ride it out on a bumpy ride.
Another popular choice is the ARK Fintech Innovation ETF, which holds stocks of companies using or developing blockchain technology. Many people believe blockchain technology will be a game-changer, and ETFs containing companies using this technology have proven to be a sound investment. The largest ETF, BLOK, holds shares of companies like Accenture and Coinbase. Also, the ARK Fintech Innovation ETF contains shares of Fujituo, Samsung, and MicroStrategy.
As with any investment, there are risks and rewards associated with cryptocurrency. It’s important to be aware of scammers and avoid investing in crypto if you don’t know anything about it. Because of the rocky nature of the crypto market, a risk-reward ratio is unknown. But if you’re smart and savvy enough to avoid these potential pitfalls, you’ll be well on your way to success. Cryptocurrency is a smart way to diversify your portfolio and diversify your risk.