A true game-changer for the financial world, cryptocurrency has disrupted markets everywhere since coming to prominence on the back of Bitcoin’s success. As the cryptocurrency that started it all, Bitcoin remains the most valuable and well-known. However, the market has expanded far beyond it with hundreds of different offerings now available.
With the staggering amount of choices out there now, it’s not easy for novice investors to easily decipher the best ones to invest in, but there’s plenty of information about the best crypto to buy to help new investors out. If you’re looking to start investing in cryptocurrency or advance your position as an existing investor, there’s no better time than the present. If you’re looking to embrace change in the new year, here’s a guide to investing in cryptocurrency in 2024.
Choosing Wisely
One of the first things to consider when investing in cryptocurrency is how much it has grown since its early days when Bitcoin was still a relatively new concept. Back then, not many people were truly certain how well it would do. We now know that Bitcoin and subsequently successful cryptocurrencies made many people tons of money, even turning ordinary people into millionaires overnight in some cases.
However, these kinds of success stories led to a boom in its popularity and a massive surge in how many cryptocurrencies there are out there right now. This has shifted the considerations of investing from a simple choice of whether to do so or not, into a plethora of other decisions before you can even start investing.
Choosing the Best Crypto Trading Platforms
The growth of cryptocurrencies created an expansive market for trading platforms to help investors get into crypto trading and manage their investment activities. These platforms can be a space for buyers and sellers to trade cryptocurrencies or help new investors explore options such as swap cryptocurrency to build up and manage a crypto portfolio.
Whether you’re a big or small investor, an experienced one, or a first-timer, crypto trading platforms can be beneficial in many ways. Like the currencies themselves, there is now also a huge selection of crypto trading platforms to choose from. This means that a potential trader will first have to decide which platform to use based on research and reviews.
Once you have a better idea of which cryptocurrencies you’re looking to target for investment, it’s best to find a platform that offers and specializes in that particular one, even if others are also offered by it. Considerations such as their fees and commission structures, whether they are available to use in your region, and if there are minimum investments to use them should be taken into account.
For novice traders, other considerations may include the user-friendliness of the interface and the complexity of the types of trading offered, or whether there are demo accounts, sign-up bonuses, or training facilities provided. Features like these can help make it easier for inexperienced traders to learn the ropes in a safe, secure, and helpful environment.
Doing a little bit of research can point you in the right direction when choosing a platform. Your personal budget, goals, experience level, and willingness to invest short or long-term are factors that can help you devise a tailored investment strategy.
Of course, with the success of crypto investing, there are also a lot of scams out there. Research should therefore also be geared toward evaluating the trustworthiness of a platform by checking things like its history, reputation, and record with compliance.
Understanding Cryptocurrencies and Choosing the Right One
Before choosing the right platform and getting into cryptocurrency trading at all, any serious trader should have a basic understanding of what they are. Cryptocurrencies are basically digital assets that utilize blockchain technology; a decentralized and digitized ledger to record and authenticate transactions.
The fact that cryptocurrencies exist on a model of encryption allows them to function independently from central banks and governments. However, regulation of them is rapidly increasing around the world.
The rise of Bitcoin and other major cryptocurrencies created a modern-day type of gold rush that saw people all over the globe flocking to try and get in on the massive returns that defined them. However, although there have been plenty of real rags-to-riches stories, this boom also resulted in an explosion of new currencies.
By November 2023, according to ExplodingTopics, there were a staggering 10,748 cryptocurrencies in circulation, with other outlets putting it at a much higher number. All that choice means that while many investors were smart or lucky enough to cash in big, the sheer number of currencies now available means investment strategies now have to be a lot more streamlined.
The reality is that not every currency will boom, and it’s difficult to predict which ones will and at what point in your investment cycle. Choosing the correct cryptocurrencies to invest in is therefore an integral choice investors have to make.
The Different Types of Cryptocurrencies
Bitcoin is the oldest, most valuable, and best-known cryptocurrency. It is also the most sought-after since its value has recorded massive gains since it first came about. There are many other types of cryptocurrencies out there like it now. A key aspect is that they all operate on the same basic premise of being a digital currency that can be used as a medium of exchange, with many of the same applications that fiat money traditionally has.
On the other hand, currencies like Ethereum, which has also become well-known, has a more advanced range of applications. It allows for the utilization of so-called smart contracts that are decentralized and allow for programmable processes between two parties, making it well-placed to usher in the Web3 ecosystem.
Another popular cryptocurrency innovation and investment opportunity comes from NFTs. Standing for Non-Fungible Token, an NFT is a digital asset that can be bought and offers the benefit of being uniquely attributable so ownership and authentication are built in as part of its value.
Crypto Exchanges and Brokers
Before taking the leap into investing in cryptocurrency in 2024, a few other things should be considered. Among these are the differences between a crypto exchange and a crypto broker. Once you know this, you can make an informed choice about the best ones to use.
A crypto exchange is a marketplace for traders to buy and sell crypto assets from each other. There are usually small fees involved, and wider trading options may be available. The prices of the assets are determined by market value, which in turn may fluctuate according to traditional free market principles like supply and demand.
On the other hand, a crypto broker may be a person or company which acts as a third-party middle person between buyers and sellers. They would usually set the prices themselves, and although offering fewer trading options, can make the process easier by facilitating trade in a user-friendly manner.
Conclusion
If you’re thinking of investing in cryptocurrency in 2024, be sure to have a basic understanding of what cryptocurrencies are. It’s a good idea to then research things like market volatility, the history and performance of the cryptocurrency in question, your own budget, needs and goals, and applicable regulations and taxes in your region.
Once you have a good handle on such things and a good idea of what crypto assets you want to trade in, the platform, exchange, or broker you want to use may be selected to assist in facilitating your trading needs. The next step is simply signing up, making the required deposits and payments, and waiting to see how your asset performs.
