With the rise in popularity of cryptocurrencies like Bitcoin and Ethereum, more investors are looking to add crypto to their portfolios. However, the crypto space can be risky for beginner investors. Choosing a secure crypto wallet and using verified crypto exchanges are key to safely buying, storing and trading digital assets. This article will provide tips on how to safely invest in cryptocurrency as a beginner.
Pick a reliable crypto exchange
When looking to purchase cryptocurrency, it’s important to use a trusted platform. Leading exchanges like Coinbase and Gemini allow you to easily buy popular cryptos like Bitcoin and Ethereum. These platforms are regulated, offer robust security features like two-factor authentication, and insure assets in case of breach. Less established exchanges may have lower fees but can carry higher risk.
Choose a secure crypto wallet
Once you purchase crypto, you need a wallet to store your assets securely. Software wallets like Exodus and Electrum work well for everyday use. For long term storage, hardware wallets like Ledger and Trezor offer offline storage. Always enable two-factor authentication on your wallet and safely back up your recovery phrase.
Dollar cost average into positions
Cryptocurrencies are highly volatile, with prices changing drastically week-to-week. Dollar cost averaging – regularly buying small amounts over time – can help smooth out volatility risk. Invest a set amount each week or month rather than trying to time the perfect entry point.
Manage risks wisely
While the crypto market offers potential upside, it also carries significant risks. Never invest more than you can afford to lose. Crypto investments should make up only a small portion of a diversified portfolio. Take profits occasionally to manage risk. Also beware of scams – if an investment sounds too good to be true, it often is.
Cryptocurrency offers a novel new asset class for portfolios, but requires research and caution to invest in safely. Using regulated platforms, robust wallets, dollar cost averaging, and managing risks can help mitigate the volatility and potential pitfalls of the crypto space.