Bitcoin came out about a decade ago, and it was just a phenomenon that people thought couldn’t last. Futurists and technicians could see its potential, but investors weren’t taking interest in it.
Throughout the years, though, it because the standard within the crypto industry, and other cryptocurrencies have come along. Since it is so popular, it’s time to learn how to invest in it the right way.
What Are Cryptocurrencies? How Do They Work?
Cryptocurrency uses blockchain technology. This chain of information focuses on distribution and regulator, but it’s not controlled by one institution. The blockchain is a record of all digital transactions, which are independent of a central bank.
There are various technical details about blockchain technology, but it boils down to this: there’s no middleman (bank), and buyers/sellers can make business transactions directly with each other. This usually eliminates or reduces transaction fees, which is why crypto is so attractive.
You can find hundreds of cryptocurrencies out there, but Bitcoin remains the most popular.
Why Is Crypto so Attractive to Investors?
Right now, it seems that people mainly like cryptocurrency because it’s anonymous to use and own it. Plus, there are price explosions out there that can make it a great investment.
How to Invest in Crypto the Right Way
You can’t go to your local bank or brokerage firm to buy cryptocurrency. Financial institutions seem to shy away from it, though they are getting more involved now. Since it’s unregulated, some companies and banks are still ignoring it, so it often functions on its own network.
1. Decide How Much to Invest
It’s important to know how much you want to invest and allocate to crypto before you go too much further. There have been recent advances with Bitcoin and a few other cryptocurrencies, so it can be hard to do that. Investments are ruled by fear and greed. Therefore, you should focus on controlling greed.
We recommend investing a small amount into cryptocurrency if you’re new to it. That way, you don’t go overboard and can learn about the market. In a sense, it’s best to allocate about five to 10 percent of your portfolio to crypto.
You should be aware that crypto isn’t like stocks. It isn’t going to pay dividends or interest, which is similar to gold and silver. Therefore, whether it’s a good investment or not depends solely on how much the price increases and stays there.
While cryptocurrency wasn’t designed to be an investment, many platforms and exchanges treat it like one. It’s just that the trading often takes place between two people instead of on a large exchange (like the stock market).
2. Choose Your Crypto
Now, you should decide what cryptocurrency you want to invest in. There are hundreds of them out there, with Ethereum and Bitcoin being the top choices. You can also find initial token offerings such as genesis coin, which are new coins that you invest in for a lower price before things get going.
Bitcoin is the top choice and has a dominant position on all cryptocurrencies. In fact, when people mention crypto, they often think of Bitcoin. What’s interesting here is that the media follows the price of Bitcoin only, but some cryptocurrencies have actually done better.
Consider investing in Bitcoin and another one, such as an initial token offering by a new crypto company. That way, you can even out the odds a bit.
3. Find a Platform
The biggest issue most investors have is that there’s no secure trading option. Most platforms are run by individuals, with CFD trades paving the way. These are highly risky, and most of them don’t have regulation at all.
Since you can’t buy cryptocurrency from a conventional financial place, you have to take your chances out in the internet world. This is scary for most people, but it isn’t the end of the world. It’s a matter of finding a reputable trading platform. For that to happen, it must be regulated by the EU, FINRA, and SEC. In fact, none of them are – yet.
In the near future, secured crypto trading like INX is going to be launched live, which is going to bring to everyone a fully regulated platform. Right now, INX is obtaining approvals with the EU, FINRA, and SEC. That’s going to protect the capital in your cash fund, keep crypto-assets safe, and give you a broker-dealer relationship where the online brokers have accountability for their actions.
What that means for you is that you’re going to be more protected. It’s truly an amazing thing, and it’s just about ready to launch, so now is your chance to buy security tokens and be ready for the grand opening.
4. Buy and Sell
Once you have registered to use the platform, you can start buying your security tokens through INX. There’s a limited amount and time to do it.
You aren’t going to be able to buy and sell (trade) them yet. The platform isn’t going live for a little while longer. The reason for that is because INX wants to get approval from the SEC and other regulatory agencies. That way, your money is safer, and people have to follow the rules.
5. Consider Security Tokens (New Crypto)
Security tokens are the next level for the capital market. It’s a new asset class, but they’re still based on the blockchain. The good news is they are issued and traded under the securities laws in place for your country.
That way, you have more flexibility and functionality. This brings you automatic KYC/AML compliance, access to more capital and investors, and more privacy and transparency.
Though the world of crypto is a confusing place, INX is making it easier for people to trade cryptocurrency. Its new asset class (security tokens) is based on the blockchain for all of those benefits. However, all the security tokens are traded and issued under the securities laws. That means you are protected, there are more efficient processes, and everything is still private. Now is the time to invest in your future!