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You might have already heard how Bitcoin and other cryptocurrencies have made people millionaires overnight.Okay, that’s a little dramatic- but yes, people have turned a few thousands (and sometimes hundreds) in investments into millions in crypto assets.So, you want a slice of the action but are a beginner and don’t know where or how to begin.You’re in luck because today I will talk about how to invest in crypto, step-by-step for beginners.
Step 1: Find and Register on an Exchange
At this point, I assume that you have already done your research and are aware of the different cryptocurrencies in the market.
Most importantly, you’ve pretty much made up your mind on which coins or tokens you want to buy.
So, the first step is to look for a cryptocurrency exchange.
An exchange can be best described as a regulated marketplace where users can buy, sell, stake, or store a variety of cryptocurrencies.
It basically allows you to transfer money from your bank or credit card to an online account to buy the crypto you want.
There are many exchanges out there, but the most popular, and frankly, ones you should consider as a beginner, include Coinbase, Binance, Gemini, Kraken, and Crypto.com.
Keep in mind that these exchanges differ in fees, interfaces, and coin offerings.
Once you have selected an exchange of your choice and one that accepts customers from your location, register your account.
Here, you’ll need your personal identification information.
Step 2: Connect Your Account to Your Card and Fund It
Once you’ve registered an account on your preferred exchange, you’ll get what’s known as a wallet.
Basically, a wallet is an account where you store your funds and crypto.
Most exchanges come with in-built wallets. However, you can also find third-party wallets in software or hardware form.
If you’re a beginner, it’s much easier to stick with the exchange’s wallet and add security measures like two-factor authentication to secure your account.
Now, the next step is to load money into your wallet so that you can buy crypto.
Most exchanges accept bank and wire transfers.
Some also accept credit cards.
So, all you need is to connect your new wallet to your bank account and can load any amount you want.
In the same way, you can withdraw funds from the exchange and into your bank account.
Step 3: Buy Your Crypto
The third and most crucial step is to buy your coins or tokens.
Different cryptos trade at different prices, with the likes of Bitcoin going for thousands of dollars.
However, you don’t need that much money to invest even in Bitcoin.
With most platforms, you can go in with as little as $10 plus fees and you own a fraction of the coin.
That said, this step might be a little bit confusing.
On the one hand, you can put your entire initial investment into buying the coin of your choice at once.
But then the prices can plummet, and you lose money.
On the other hand, you might wait for prices to dip, and they just keep going up.
So, you regret not buying in sooner.
I find that the best solution to this dilemma is using the dollar-cost averaging strategy.
If, say, you plan on investing $5,000 into Bitcoin.
You can break down that figure into ten instalments of $500 each and invest it over time, for instance, every two weeks.
This way, you guarantee yourself a good average entry price while protecting your initial investment.
Step 4: HODL or Start Trading
Now, you have bought your crypto. What do you do with it?
Let me rephrase that, how will this crypto make you money?
You can take one of two directions.
The first is to start trading.
Trading is selling crypto when the prices go up and repurchasing it when they dip to earn a profit.
However, I would warn you that trading is risky and requires quite a bit of skill to analyze market trends and patterns so that you can make predictions.
But if you learn and get the hang of it, it can make you quick profits.
The other strategy is much safer but requires some patience to see returns.
That is HODL.
The term, which translates to “Hold On to Dear Life,” is where you hold your crypto in anticipation that it will appreciate over the long haul and make you rich.
Similar to how Bitcoin was worth $0 when it was first launched and nearly $60,000 in late 2021.
But as you wait for that, you can decide to stake your holdings and earn interest, also known as an APY.
With staking, all you have to do is lock up your crypto for some time in an exchange / wallet that provides staking for the coin you’re holding.
And that’s about it.
As you can see, getting into crypto in 2022 is quite easy, even for a complete beginner.