By Dare idowu-Agida September 25, 2022
Cryptocurrencies are the new frontier for investors. Crypto markets are volatile and highly speculative. Investors should not invest more than they can afford to lose and should be very cautious of markets riding high on news or sentiment.
In recent years, cryptocurrencies have become a global phenomenon and have made many millionaires. With the current hype of Bitcoin reaching new highs and low, becoming an early investor in crypto is one of the most popular daydreams. However, it is not as easy as it sounds. The cryptocurrency market is one of the most profitable markets right now. The meteoric rise in prices has yielded exponential profits for those on the right side of history.
This article will teach you five steps for building your portfolio. These steps will be essential for your success in this volatile but lucrative market. Today you’ll get the tips and focus on how to profit from cryptocurrency. It will summarize five critical steps for building your portfolio and provide a few examples of leading companies in this field and many more.
The crypto market has taken the world by storm. The decentralized currency is a great way to make some money.
Here are five key steps for building your portfolio
According to Investopedia, an investment portfolio is not always what people call it. So, how does an investment portfolio work?
A portfolio consists of financial investments such as stocks, bonds, commodities, cash, and cash equivalents, including closed-end funds and exchange-traded funds (ETFs). Most people believe stocks, bonds, and money are the three most essential portfolio components. In many cases, this happens, but it does not need to be the case. Many assets can be included in a portfolio, such as real estate, art, and private investments (fungible and non-fungible).
You can either manage your financial portfolio yourself or have it managed by a money manager, financial advisor, or another financial professional. The guide to getting you started is illustrated and summarized here to make it easy to read.
-Learn about Bitcoin and other major cryptocurrencies.
-Do your research.
-Diversify your portfolio.
-Follow the trends.
-Keep your portfolio safe.
1) Learn about Bitcoin and other major cryptocurrencies: Get educated about cryptocurrencies and blockchain technology – it will give you a clear understanding of what the market is about. Investing in cryptocurrencies is also more complex than owning stocks or bonds. Get educated, take free and paid courses from these online institutions: CryptoDetails, UNIC offers: Introduction to Digital Currencies, UC BerkeleyEdX also provides free courses, but the certification would cost you a few bucks, Udemy on Introduction to Cryptocurrencies and Blockchain or better use Google’s Tube and learn from the official website for Ethereum.
2) Do your research: You’ll be able to invest in the right coins after thorough research because there are over 20,000 different cryptocurrencies out there, but not all of them are worth investing in. You’ll need to do your research and find out which coins have the potential to grow and become profitable. Please, do your research frequently and know what you’re buying by researching the coin thoroughly before investing in it. The market might not guarantee the success of any currency, so research is necessary to determine whether a coin has a long-term future ahead of it. There are free and premium crypto research tools: Cryptoinvesting, coinmarketcap, Crypto trading, etc.
3) Diversify your portfolio: Don’t put all your eggs in one basket. If one coin starts to lose value, you’ll still have other investments that will maintain their value or even increase when others falter.
4) Follow the trends: Find Coins with Potential for Growth. So, once you have developed your strategy, it’s time to find coins with growth potential. Remember that there are no certainties here, so don’t put all of your money into one coin just because it will make you more money. Use the statistics on coingecko.com; they can help you a lot.
5) Keep your portfolio safe: You’ll have to develop a strategy to keep you safe in this volatile market. The right thing to do is to create a system for yourself. Before buying any coins, you need to know how much you are willing to risk and what you want to make from this investment. Furthermore, you can buy low and sell high: With the volatility in these markets, it’s important to buy when prices are low and sell when they’re high. You may like to try a strategy that allows you to make money while the market is down and reinvest when prices rise again.
What are the pros and cons of investing in cryptocurrency?
| PROS | CONS |
| 1. Open to everyone and liquidity | Up and down & unsteady |
| 2. Secure transactions (peer-to-peer) | Cyber attacks |
| 3. High rise ROI | High risk & many losses |
| 4. Privacy, user unknown and clarity | Not regulated |
| 5. Liberty & autonomy from government | Irrevocable |
Purchasing cryptocurrencies may seem risky, but there are other ways to benefit from their rise. Due to the lack of price correlation between Bitcoin and the U.S. stock market, holding some cryptocurrencies can help diversify your portfolio. It is wise to develop an investment thesis before investing in any cryptocurrency.
Coinbase, Square, and PayPal are some companies you can invest in, or an exchange like CME Group (NASDAQ: CME) can facilitate crypto futures trading. Investing in these companies may be profitable, but not to the same extent as investing directly in cryptocurrencies.
To recap, investors are increasingly turning to cryptocurrencies. Hence, the crypto markets are very volatile. It is essential not to invest more than you can afford to lose and be careful when markets are riding high on news or sentiment. It is advisable to acquire financial literacy before investing in any crypto market. You’ll save yourself a lot of trouble by doing it. Go through this content again and again and study the links that are attached to it. They are a wealth of free resources and guides everyone can use.
