How to start investing in cryptocurrencies

How to start investing in cryptocurrencies

Decentralized digital currencies stored in the blockchain system have taken the world by storm. The dramatic rise of cryptocurrencies saw their market capitalization reach $2.977 trillion in early November 2021, securing them the 8th place in the world economy in terms of gross domestic product.

There are risks to investing in the crypto market, such as volatility and regulatory uncertainty (legal in 104 countries but banned in 40). Yet one of the biggest risks right now is cryptocurrency-related crime. According to these crypto statistics released last year by the Federal Trade Commission, the median loss for 7,000 investors through theft or fraud averaged $1,900. Their losses amounted to over $80 million, mostly due to investment scams. Guarantees and promises of huge returns are a sign of a scam, and investors should read how fake websites work, urges the FTC.

Invest in cryptocurrencies

Mars Tech is a comprehensive and diverse blockchain technology services group that leverages blockchain technology to create innovative digital currency products and services. They integrate their resources to create links with all industry players. The company has several successful businesses, including its DeFi platform MarsDao, their Mars Learning Academy and venture capital platform MarsVC. MarsTech has participated in all phases of blockchain technology, including NFTs and the metaverse. It aims to promote the development and adoption of blockchain technology globally.

Investing in cryptocurrencies can seem like a maze, but the design of blockchain technology ensures a more secure, decentralized way to conduct these monetary transactions. Whether you want to use cryptocurrencies to buy and sell goods or just as an investment, this is how MarsTech says you should start investing in them.

Understand before investing

Whatever you invest, it is essential to understand the pros and cons. There are thousands of cryptos you can invest in, and they all work differently. Learn about them and analyze their performance before deciding which ones you prefer. Earnings for most cryptos are highly market dependent and do not work like corporate stocks.

The management of cryptocurrencies also differs. Bitcoin generates new units by mining on its own blockchain. Many digital currencies, including Bitcoin, have a limited supply, creating demand and increasing value. Some altcoins have a different process for producing and validating transaction blocks. Ether is the cryptocurrency of the Ethereum network and uses decentralized applications to automatically enforce clauses. These are known as “dapps”.

Some of the most popular cryptos currently include Bitcoin, Ethereum, Cardano, XRP, and Dogecoin. MarsTech is a strong supporter of Ethereum, having purchased 1000 at $7 each.

Expect volatility

Cryptocurrencies are very volatile assets. Their prices rise and fall sharply, and investors can see huge swings within seconds, depending on what news or rumors are circulating. Seasoned crypto investors know the fundamentals that allow them to execute trades during these sudden moves. As a new investor, this volatility can be scary and requires strong nerves, so practice the waiting game to avoid buying high and selling low.

Look at the future prospects

Future growth is far more crucial than past performance when determining which cryptocurrency to invest in. Some, like Bitcoin, have seen meteoric rises, but as an investor you need to consider the outlook ahead.

Learn to analyze metrics

Valuation metrics for cryptocurrencies vary slightly from those for traditional investments. These require pairing them to deliver a good picture rather than looking at them in isolation. These crypto valuation metrics include market capitalization, trading volume, hash rate (used to gauge the strength of the blockchain network), active address activity, and transaction fees (to gauge stability and reliability). security).

Practice of risk management

Only money you don’t need should be invested in stocks, ETFs, digital currencies, and other types of assets. Depending on the duration of an investment, risk management is essential. Volatile assets traded in the short term require greater risk management than long-term investments. Long-term investors hold a position without selling as the price rises.

As a short-term trader, risk management requires a strict set of rules to follow on buying and selling prices. MarsTech suggests that new traders keep a small reserve of their trading money to allow for further trades if their position moves against them.

Selling at a loss has a cost, but practicing risk management in cryptocurrency trading is essential, especially as a newcomer.

To start

Since discovering the world of Bitcoin and blockchain in 2014, the MarsTech team has made significant strides. Through their venture capital division, MarsVC, in the last year alone they have invested in over 100 projects. Once someone understands the fundamentals, signing up with a broker and getting started is the next step to acquiring digital currencies.