Despite it being on the market for a fairly short period of time, cryptocurrency has definitely made some ripples in the financial world, and it’d be a shame if you missed out on its golden age.
Of course, you’ve probably seen currencies like Bitcoin reach astronomic heights only to come crashing down a few weeks after, and this can make the most seasoned of investors think twice before committing to such a volatile asset.
However, crypto has proven to be one of the most promising alternate assets on the market right now, with many analysts comparing its potential to that of gold, as it’s a great store of value, at least in the long run.
On the other hand, the volatility of the asset means you could make a 100% return on your investment in just a few weeks, but it’s a double-edged sword, and you’ll want to know everything about it before jumping in headfirst.
What is crypto?
If you’re unfamiliar with cryptocurrencies, you’re probably not alone, and seeing as they’ve practically taken the market by storm you’ve probably got a lot of catching up to do.
Essentially, this digital currency is stored on a ledger of sorts, commonly referred to as the “blockchain”, and it can be traded in for other currencies or their value in the US dollar.
The biggest advantage crypto has on actual money is that it’s completely decentralized, meaning that the government doesn’t have control of its value, but rather, that the community of miners and traders contributes to it.
Among the many currencies on the market, Bitcoin is the most recognizable one, and it’s reached a value of around $69k/coin in November last year, and while it did crash down to a fifth of that a couple of months later, many investors believe it to be a solid investment option.
On the other hand, NFTs are an even newer form of cryptocurrency on the market, with the twist being that they’re a store of value tied to a piece of media, often a picture, animation, or an audio file.
It’s highly likely you’ve seen the Bored Apes collection NFTs, which are a series of artistic depictions of monkeys wearing human clothes, some of which have sold for tens of thousands of dollars.
This asset has shown SOME promise in the past, especially with the development of the metaverse, a decentralized alternate reality platform where these assets can be owned, bought, sold, and traded.
Sometimes, even a single tweet can become an NFT, which has been the case for Twitter founder Jack Dorsey’s first post on the platform that sold for millions of dollars.
How to get your own piece of the cake
The only thing you need to become a part of the ever-growing network of crypto investors is a platform where you’ll buy them and a wallet where you’ll store all of these digital currencies.
A number of different exchanges are available to prospective investors, and some of them even offer you the ability to buy a fraction of a certain currency, meaning you don’t have to invest tens of thousands just to buy a single bitcoin, but rather just a few dollars for a small part of it.
On top of this, you don’t even need crypto to begin investing, as the majority of the currencies on the market can be bought using your debit card.
However, if you wish to purchase altcoins, which are essentially currencies whose value is tied to another currency like Bitcoin or Ethereum, you’ll first need a wallet with a certain amount of said currency in it.
There’s also a fee for every transaction, which can vary immensely over the span of one day, so you’ll want to time your investments in a way where you’ll be getting the most out of every dollar you put forward.
Where is it stored?
Due to them being digital, these coins can’t be stored in a mattress or your actual wallet, and you’ll also need a digital counterpart to those if you want to actually own some of these currencies.
You’ll find that you can choose between a software or a hardware wallet, where the former is essential for active traders, whereas the latter is used for investors that are banking on a certain coin appreciating over time.
Hardware wallets are similar to the standard USB drive you’re used to seeing, and due to them being disconnected from the network at all times, they’re a much safer way to store your investment.
To put it simply, a software wallet is something like a checking account, which you’ll be using every so often, while your hardware wallet is more like a savings account, and you’ll use it for all of your long-term crypto investments.
That being said, you’ll want to gauge these investments very carefully, and most importantly, you’ll want to dedicate only a small portion of your portfolio to them, as the asset’s volatility makes it a less-than-favorable investment for those faint of heart.