Bitcoin is reportedly the highest-performing asset over the last decade. Crypto, despite being an emerging asset class, is making great waves, and for all the great reasons. The golden rule of investment is to put your money in an asset that can assure the potential of high returns. What makes crypto a favorite of contemporary investors is that the asset class is currently booming and is poised to scale up to even greater heights in near future. However, not all cryptos are made the same, and hence not every crypto out there could guarantee a high ROI investment portfolio. Thus, an aspiring investor must focus on the biggest selling points for crypto before making an investment. Mex group
The post below sheds light on the key aspects to check before making an investment in crypto, followed by a brief on how to make an investment.
How to make an investment
Trading volume
Trading volume metric offers insights on the trading potential of a crypto asset or any asset in general. High volume shows that the asset is in demand and you have a long line of buyers waiting to put their money in the asset. Thus, if you invest in the asset, you won’t have problems in finding buyers and a great price for the crypto asset.
High trading volume is one of the biggest selling points for crypto. You should check the 24 hours trade volume of your chosen crypto not just for the previous day but also for over a few months. The study will help you to get an idea on the average daily trading volume of the crypto asset.
Volatility
The next thing to check here is the rate of volatility of the crypto.
Crypto is a highly volatile asset – in fact, one of the biggest handicaps of crypto is its wild volatility. But, all cryptos are equally volatile. Your focus would be on the ones that show comparatively lower volatility than ones. Lower volatility speaks for higher stability and hence is one of the biggest selling points for crypto.
Strong fundamentals
There are multiple aspects that make up strong fundamentals for a crypto project-
- Solid use case
- Realistic mission and goals
- Experienced team with expertise in crypto or tech or finance or fintech
- Plans for continuous upgradation
- Ambitious roadmap
Consider these pointers while choosing a reliable crypto asset for investment.
Growth potential
When it comes to crypto investment, don’t just focus on the current price of the asset. You have to check what the crypto has to offer in the long-term. You can’t put your hard-earned money in an asset that is unable or unsure about offering high ROI in the long-term. This point is especially valid if you are aspiring for HODLing. Bottom line is, put your money in a crypto asset that shows potential for stellar growth in the coming years.
How to invest?
There are two major points to be discussed when you are looking for a guide on how to invest in crypto assets for a safe and successful investment.
First, you must start small. You are yet to check whether at all the crypto market is suitable for you. Let’s get acquainted with the industry first. Mistakes are not uncommon for new investors- but if the investment capital is small, you would face at least lesser risks. Later on, when you have gathered clarity about how the asset works, you can invest some more.
The other tip is- practice caution while choosing a crypto exchange for investing in your chosen crypto asset. The exchange must assure cutting-edge safety features to ensure a protected and safe investing and trading experience for investors and traders. A reliable crypto exchange will adopt cold wallet storage to protect user funds from hackers. As cold wallets are offline wallets, they can assure safety from hackers. Also, the crypto exchange must follow 2FA Authentication.
Begin your crypto investment journey with one crypto, say Bitcoin. But, once you get comfortable in the crypto market, make sure to expand your asset to at least two more crypto assets. One of them should be a PoS cryptos as PoS cryptos allow holders to earn passive income through the process of staking. A diversified investment portfolio helps to support with backup if one of the cryptos fare below expectations.