So you have decided to invest in cryptocurrency. I don’t blame you, there is money to be made.
Choosing which cryptocurrency to buy is your next step. Do this badly and you will see your hard-earned cash disappear into the void, so it is critical you get it right.
Keep reading for things you need to keep in mind when deciding the best crypto to buy.
What Do You Want From Cryptocurrency?
Your strategy when buying cryptocurrency depends on your investment goals. Do you want a safe investment that you can forget about? Or do you want a risky investment that will provide an astounding return if it pays off?
Your portfolio will ideally contain cryptocurrencies of varying riskiness. Just how safe, or how risky, is up to you.
Bitcoin vs Ether: Which Cryptocurrency to Buy
The two biggest cryptocurrencies by market cap are Bitcoin and Ether. Their reputation and widespread adoption make them the “safest” option. But remember, like all cryptocurrency prices, Ether and Bitcoin pricing are still subject to large fluctuations.
Bitcoin was the first cryptocurrency to break out into the mainstream and is the most adopted cryptocurrency to date. For a cryptocurrency to increase in value in the long term, it needs to be adopted by buyers and sellers so people want to hold it. Bitcoin clearly has the advantage here for the moment.
Ethereum, the blockchain technology that hosts the Ether cryptocurrency, can run “smart contracts”. These provide a completely decentralized way of managing applications and contractual agreements. As more businesses embrace blockchain technology, Ethereum will grow in popularity.
The Ethereum blockchain also supports non-fungible tokens (NFTs), which continue to grow in popularity.
The bottom line is Ether may have the potential to bridge the gap to Bitcoin in the coming years.
Finding Hidden Gems
There are thousands of cryptocurrencies, many of which use the Bitcoin or Ethereum blockchain.
The majority of these are currently very small. Study these small projects carefully. For every gem, there are countless more with little to no growth potential. So what should you look out for?
Once again, adoption is key. If you think a cryptocurrency has use beyond speculation, make the investment. Use the news and expert analysis to inform your decision.
Monitor trading prices and volumes. This allows you to assess market trends and predict future price movements.
Consider the supply of the currency. Some coins have a pre-determined cap. If demand increases once the cap has been hit, the price will increase dramatically.
Be Smart and Safe
Deciding which cryptocurrency to buy is a decision that requires research. Choose Bitcoin and Ether for stability, or take a risk and look for a new project with explosive potential.
Whatever you prioritize, you must understand that crypto markets are volatile. Choose a diverse portfolio to limit your exposure to shocks. Never invest more than you can afford to lose.
Why not share this article with your friends and make this step into the crypto world together?