The growing interest, adoption, and investment in cryptocurrency, also called crypto for short, has many investors curious about getting into the game. Learn what crypto is, the different types, what to consider before investing, and details to help you determine if it has a place in your portfolio. And if you decide you’re ready to start investing in crypto, you’ll find a step-by-step guide to getting started.
What is crypto currency
Cryptocurrency is a virtual currency that, like cash, is a source of purchasing power. It’s also an avenue for investment and, like other investment assets, can be bought with the objective of financial return.
cryptocurrencies are decentralized, meaning they are not issued, backed, or regulated by a central authority like the U.S. government. Units of cryptocurrency, known as coins or tokens, are created digitally through a validation process that relies on blockchain,
blockchain produces a secure encrypted record of the value of each virtual coin and its associated transactions. Those records are distributed and linked across the network of parties, or computers, accessing the blockchain; in theory, the blockchain can be accessed by anyone with an internet connection.
How to invest in cryptocurrency in 2024
investing in cryptocurrency? Understanding where and how to buy and store it is crucial. With numerous exchanges available, similar to traditional investment platforms, setting up an account is quick and easy. However, conducting thorough research on each currency is advisable before investing.
Types of cryptocurrencies
there are many different cryptos: over 2.4 million as of May 2024. Bitcoin was one of the earliest cryptocurrencies created and remains the best known.
Several cryptocurrencies have gained high profiles, amassed large market value, and developed broad bases of users and investors in recent years.
Top 5 cryptocurrencies by USD market cap
As of 24 May 2024:
- Bitcoin
- Ethereum
- Tether
- BNB
- Solana
Is crypto currency a good investment ?
crypto will be a good investment for you depends on many factors. As with all investing, the answer comes down to things like your tolerance for risk.
The volatility of crypto means that the value of your coins can go up or down quickly, and sometimes dramatically.
How to keep your cryptocurrency secure
precautions to keep your crypto investment secure is one of the unique concerns that come with this type of investing. Some tips that may help
- Don’t share your password or key with anyone.
- Deal with reputable exchanges and digital wallet providers.
- Protect access with strong passwords, two-factor verification, and secure internet connections
How much should invest in cryptocurrency
When looking at how much of your portfolio to invest in crypto, limiting your overall exposure to crypto is crucial. It’s important to never invest more than you can afford to lose. While having a small exposure to crypto may improve the risk adjusted return profile of a diversified portfolio.
What to consider before investing in cryptocurrency
Cryptocurrency can be volatile, with large swings in value over short periods of time, which may give you pause if you’re risk averse. Keep in mind that anyone can launch a cryptocurrency, and how it’s regulated is in flux