How to Invest in Cryptocurrency 2023 for Beginners?
Cryptocurrency is a somewhat mysterious concept. Many people have a limited understanding of how cryptocurrencies work as an investment, much less how the technology powers them. Since the beginning of the decade, the value of cryptocurrencies has grown beyond many investors’ expectations. The moment you purchase your first cryptocurrency, you enter a new market that has now surpassed $1 trillion in capitalization.
Here, we will discuss this topic in more detail.
What Is Cryptocurrency?
The concept of cryptocurrency is a digital currency held and distributed online. It is a digital asset whose value fluctuates over time, like stocks and bonds.
Unlike cash, cryptocurrency makes use of a digital “coin,” “token,” or “unit.” Most cryptocurrency exchanges allow you to purchase cryptocurrency coins, tokens, or units.
As in stock trading, you can then trade, buy, or sell cryptocurrency with others who have it. Cryptocurrency (apart from the fact that there is no physical currency) is decentralized. Any central authority doesn’t govern it.
How Do Cryptocurrencies Work?
You may wonder, “What makes cryptocurrency valuable?” Assets are typically valued according to market factors. Let’s consider the real estate market. What drives its value?
A property’s value may increase if it’s in a desirable area, more luxurious, or in a neighbourhood where home prices are rising.
How about stocks? Company success – or its impending success – determines stock value. A higher profit means a higher dividend, and a higher dividend means a higher stock price.
However, the market also affects cryptocurrency values. This is because there are no physical assets to be affected. Their value is not affected by profits. The value of the cryptocurrency unit will increase if people buy it.
Cryptocurrencies are worth what consumers are willing to pay. The value will rise if there is a large demand. If no one buys crypto, the value will drop.
Neither new investors nor veterans will understand this concept. High-risk investors who deal with volatile assets frequently would not consider it crazy. A volatile asset’s value can change dramatically and rapidly. Owning penny stocks is more “socially acceptable”. Although they can yield extremely high returns for Wall Street wolves, they can be very risky for the average investor.
The cryptocurrency market offers high returns to investors who capitalize on market surges.
What does one need to invest in cryptocurrency?
Cryptocurrency may seem intimidating to novice investors, but there are a few requirements to get started. All you need is:
- Identification documents
- Information about bank accounts
- Secure internet access
That’s it! Stockbrokers also offer cryptocurrency purchases. Thus, your personal and financial data is already in the system.
Steps for Beginners to Invest in Cryptocurrencies
Using a regulated online broker, you can invest in cryptocurrency in four easy steps.
With eToro, you can also pay for cryptocurrencies instantly without paying transaction fees.
Here are some quick tips for investing in crypto on eToro:
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Sign up for eToro
To get started with eToro, you need to provide some personal information. To prevent money laundering, your ID will be required.
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Deposit
The minimum deposit with eToro is $10, and transaction fees do not apply (only for US clients). You can use ACH, debit/credit cards, e-wallets, etc.
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Cryptocurrency search
After funding your account, use the search bar to find the cryptocurrency you wish to invest in. By clicking Discover, you can browse all 60 digital currencies supported by eToro.
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Cryptocurrency investment
You will see an order box after clicking ‘Trade’. Enter your investment stake into the ‘Amount’ box and click ‘Open Trade’ when you are ready to invest.
Where can you invest in cryptocurrencies?
Cryptocurrency investors have access to more than 100 brokers and exchanges online. You should invest in cryptocurrency with a regulated provider to ensure safety.
A good platform should also support your preferred cryptocurrencies and have low fees.
Here are some low-cost and safe ways to invest in cryptocurrencies.
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eToro – Best Place to Invest in Crypto
eToro was established in 2007 and offers a variety of asset classes, making it a great platform to learn about bitcoin investment. It includes everything from index funds to Forex and commodities. You can buy 60+ cryptocurrencies with a $10 minimum investment here. You’ll be able to access Dogecoin, Shiba Inu, and ApeCoin. Those cryptocurrencies might explode in 2023, too.
First, you can experiment with crypto assets with little risk. You can also invest in cryptocurrencies like Bitcoin or Ethereum, worth thousands of dollars each, with a minimum trade size of $10.
eToro offers US clients fee-free deposits. You can use any deposit method. You can use ACH, online banking, PayPal, Neteller and online banking. It costs just 1% to buy cryptocurrency, which includes the commission. This method allows you to buy bitcoin and other cryptos with a credit card.
If you want to invest in tokens but aren’t sure which to choose, eToro offers two passive trading tools.
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Webull – Just $1 to Invest in Crypto
When using a broker like Webull, investing in crypto does not need to be risky. It only costs $1 to trade cryptocurrencies with this top brokerage site.
It will not require you to deposit anything to open an account. You can try out Webull’s cryptocurrency platform with a $1 demo deposit. Therefore, ACH deposits are recommended since there are no transaction fees.
A fee of $8 is charged for domestic bank wire transactions. There will be no commissions to pay when you invest in crypto with Webull. Consider the 1% bid-ask spread here in calculating investment costs.
Webull also offers traditional assets – stocks, ETFs, and options if you want to use a cryptocurrency broker. There is also the option of commission-free transactions. Webull offers no copy trading tool across its retirement accounts across IRA accounts.
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Binance – Low-cost Crypto Investments
Binance is by far the most popular exchange. Exchange offers a domestic website that is available only to US clients. This US-based exchange also supports 80+ markets compared to the 600+ cryptocurrencies found on Binance.
Once you open an account and deposit, you can trade cryptocurrencies. You are charged 0.10% per slide. You will not incur transaction fees when funding your Binance account via bank wire or ACH.
Debit or credit card deposits are subject to a 4.5% fee. A 0.5% instant buy fee is also charged. Trading tools are Binance’s strong suit. You can analyze cryptocurrency markets with technical indicators.
The tools you’ll need won’t be suitable for beginners, so bear that in mind if you plan to open a Binance account. You can also store tokens across multiple blockchains with Binance’s Trust Wallet app. You can store crypto investments in Binance’s main web wallet.
Benefits of Cryptocurrency Investment
Investing in cryptocurrencies has several advantages, including diversification and return potential. Diversifying portfolios helps investors spread risk and increase their odds of succeeding. The growing range of uses and applications of cryptocurrency makes it a popular diversification option. It is also an investment option. For example, investors can use cryptocurrency to purchase goods and services.
Cryptocurrency Investment Disadvantages
The downsides of cryptocurrency should also be considered. There is no central regulatory authority to oversee the market since it is highly volatile. Trade at your own risk.
Also Read How To Invest In Stocks
Summary
Cryptocurrency units are titled on a blockchain according to their ownership. The market completely determines its value. There is no intrinsic value. A volatile asset, a cryptocurrency needs to be handled with caution. Investing in cryptocurrencies is easy. Just open an account on a cryptocurrency exchange that serves as a broker.
