6 tips to safely invest in cryptocurrency – here’s what you need to know
The popularity and price rise of Bitcoin and Ethereum, for example, has made these digital currencies a target for hackers. As a result, hackers are looking for ways to take advantage of these valuable assets.
Jack Mannino, CEO of nVisium, had said that the economics of hacking suggest that attackers will continue to gravitate towards digital currencies. This is due to the increase in the value of assets, which means that hacking is becoming more common in our daily lives.
To save yourself the stress of tracking the work of hackers (which can frustrate you) as their tracks cannot be digitally removed, it is better to be aware of cryptocurrency security tips.
1. Research exchanges
This is the first step you need to take, especially if you are doing this all by yourself for the first time. It is important that you research the exchanges before you invest a penny in cryptocurrency. This way, you will learn about cryptocurrency exchanges as platforms that offer the ability to buy and sell digital currencies.
According to Bitcoin.com, with over 500 exchanges to choose from, you need to do your research, read reviews and consult more experienced investors before selecting an exchange.
Coinbase, GDAx, eToro, and Bitfinex are some of the top exchanges that are highly recommended.
2. Keep most of your wallet offline
When it comes to digital wallet security, you need to take a hybrid approach as online wallets are becoming increasingly popular and attracting the attention of hackers. Offline or physical wallets should be used to store most of your cryptocurrencies while keeping only a small number of currencies in the online wallet.
Also, make sure that the physical wallet is kept in a secure place like a safe or safe deposit box. It is therefore necessary to separate the private and public keys, and both should be secured with strong passwords and multifactor authentication.
It is expected that more security measures will come as cryptocurrency becomes more mainstream, but for now, you need to keep your cryptocurrency safe.
3. Diversify your investments
Diversifying investments is a key strategy in business. You should practice this in the cryptocurrency industry as well. To have a shock absorber, never put all your money in Bitcoin, for example, just because it’s the only cryptocurrency you know. Look at other options in this business and spread your investment across multiple currencies.
To even get good advice on diversifying cryptocurrency investments, you could consult a good financial advisor who will advise you on good asset allocation. Such a person could even invest your money for you. For example, some exchanges have SmartAsset’s free tool that can match you with advisors in your area based on your financial needs.
4. Prepare for the worst
In an unregulated industry, anything can happen. Since cryptocurrencies are not regulated by any government, it is a volatile business. So be prepared for ups and downs.
In this business, you will see dramatic fluctuations in prices. So, it is important to be mentally prepared for what the market tends to offer.
Once the mental aspect is taken care of, it can be said that cryptocurrency is a wise choice for you.
As an initiative that is still in its infancy, cryptocurrency is an investment that comes with a huge challenge. So to be prepared, get involved, do your research, and invest conservatively to get started.
5. Understand the volatility
Since it is an unregulated industry, it comes with a lot of risk that you must be prepared to bear. For this reason, it is important to know where you are buying and selling your digital currencies. You need to know some basic rules to survive in this industry that is always evolving, in simple terms.
Many have asked if Bitcoin, as the number one cryptocurrency, is safe. But you should know that the business is a maelstrom of risk.
The /simple fact here is that buying bitcoin is much like buying any other currency. So, you need to pay attention to the price volatility compared to other currencies.
6. Secure your digital asset
The digital currency business is different from traditional investments because you either have to hold the coins yourself or entrust a third party to do so.
If you hold them yourself, you run the risk of not storing them properly and losing them forever to hackers.
But if a third party holds them for you, they may have necessary ways to protect them. Digital coins are unlike dollars or stocks that can be stored. Once you lose the coins to hackers, they cannot be easily replaced.
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Nothing on Cryptinus constitutes professional and/or financial advice. Always think for yourself and make sound decisions when investing. Never invest money that you can’t afford to lose.