Everything About Investing in Crypto

While thinking about your finances, you might get pensive about how to fulfill your needs during the upsurge of inflation. You might ponder how to pay their kids' fees for the next 4 or 5 years, facilitate health economically, and much more. Likewise, you could’ve always wanted either to save your money or make more out of it. However, you couldn’t! Therefore, you could’ve even tried to invest your money in committees (a group of people putting their money for a lucky draw) to aggravate your money. But you might not have realized the risk factor involved in these tiny investments. 

Moreover, according to the time value of money, what we have today has a higher worth than what we get tomorrow. However, when we start investing we forgo this factor of finance and are more concerned with the opportunity cost. Furthermore, who wouldn’t want their money to grow 10 times or more? It would just be a miracle, wouldn’t that be? Something like this known as CRYPTOCURRENCY (crypto) is a hot topic these days. Investment in these could make you rich overnight like Barry Silbert, Brian Armstrong, and Michael Saylor. However, one imprudent decision could even make your clockwork anticlockwise. Therefore, there are ways to wisely invest your money to win a jackpot. 

What are cryptocurrencies?

Cryptocurrency is not like the liquid money that you have in your hands. It is an intangible and digital asset; however, is not a financial asset. According to International Financial Reporting Standards (IFRS-9), cryptocurrency is neither debt security nor equity security; however, a digital asset could be considered as an equity security. In addition, they also do not show any legal possession interest in an entity. Despite, these all, crypto has grasped the attention of investors and people who invest in the pool.  

Moreover, there are different kinds of cryptocurrencies and the one that is popular among all is bitcoin. The process of investing in crypto is all monitored by a technology known as ‘block chain’. It records the amount that every investor owes and these block chains are decentralized. They are not controlled by a government or so. However, crypto is considered one of the riskiest investments due to its volatility in return. Therefore, there are things that you need to know before you start investing in cryptocurrencies. 

Know these before you invest

If you have already made up your mind, only to invest in the crypto market, make sure to know the below before investing. 

a.      Why only crypto? 

Before you invest in cryptocurrencies, the most crucial question you should ask yourself is why you're doing it. Why is there a need of investing in crypto? There are other investment options available, many of which provide you with more stability and lower risk than digital currencies. Perhaps, are you interested in cryptocurrencies simply because it is popular?  Is there a compelling rationale for purchasing one or more specific digital tokens? Of course, various investors have different financial goals, and some may find it more beneficial to investigate the bitcoin field than others. Therefore, you need to make sure of the ‘WHY’ and answer it before you invest. 

b. Know about the digital market 

The prerequisite knowledge about the market is significant. Because you cannot jump into a pool out of your curiosity, you need to stay alive after jumping as well. Also, before investing, it's critical for investors, especially those who are new to digital currencies, to gain a better understanding of how the digital currency world operates take the time to learn about the many currencies available. . There are ample of hundreds of cryptocurrencies out there. Yet it is necessary to have a look beyond the ones that are popular like bitcoin and Ether. 

Furthermore, as I mentioned earlier about block chains you need to have a clear idea of this domain as well. To know the working of crypto, basic information on block chains is indispensable. If you know nothing about coding or computer science, then you are at a dead-end and you could be deceived easily. However, once you've decided which cryptocurrency to invest in, research how those tokens utilize block chain technology and whether they offer any unique features that set them apart from the competition. You'll be better equipped to judge whether a possible investment opportunity is worthwhile if you have a deeper understanding of cryptocurrencies and block chain technology. You will be well equipped to invest just like soldiers wearing combat uniforms are ready for the battlefield. 

c.    Online cryptocurrency fan club 

Now you might be wondering why I named it a fan club! There are numerous fan clubs for the dramatics world and pop world, why not for a digital asset? You see there are plentiful online enthusiasts on the internet, who plunge into it and nose-dive into the buzzing market of cryptocurrency. One of the best examples is Reddit which aggregates social news and American-based Company. 

d. Whitepaper cryptocurrency

Perhaps it may sound more like an A-4 size paper, yet it is not. A whitepaper is a document that advocates people about making decisions, sorting out a solution to a problem, and understanding the issue. The characteristics of digital money, rather than publicity, are more significant. Likewise, every cryptocurrency project should have at least one, and it should be easy to find. Reading this carefully could tell you about the project's author intention, which associates a timeline a basic summary, and specifics. It is often regarded as a negative if the white paper lacks statistics and precise facts about the project. A development team's chance to put forth the, who, what, when and why of their project is the white paper. If the white paper feels insufficient or misleading, it could be a sign of deeper problems with the project.

e.      Key is time or time is a key

Whether its key is time or time is a key, what matters in both is ‘The Time’. Every successful person has a defined timetable that constrains them to use time wisely. Perhaps, it’s a cliché that says ‘time waits for no one and it doesn’t. The same thing happens in the crypto market too which is why its digital currency has more volatility. Therefore, investing in a hot new currency before it explodes in popularity and value may drive other investors to do the same. In reality, monitoring the sector before making a move will increase your chances of success. Thus, there are different price trends for cryptocurrencies and hence have volatility.   Bitcoin could be seen as the pioneer among digital currencies, with others falling into line. News of an exchange hack, fraud, or price manipulation can send shockwaves through the cryptocurrency world, so it's crucial to keep an eye on what's going on in general.