Some years back, when Ethereum first appeared, I started investing heavily in this new blockchain platform. I’d started off with Bitcoin some time before and that had proved its worth. But it is fair to say that the crypto world is both exciting and unpredictable, which is part of its attraction for a number of investors. What you have to remember is that there are opportunities for huge games, but there is always the possibility of loss. Does this mean that cryptocurrencies are too volatile to invest in? No, but there is a sensible way to go about it and minimise your risk.
Be patient
First off, don’t aim to get rich overnight. Take a more steady, long-term approach to investing in crypto. Investment is a tricky game and the patient person usually wins. Remember the story of the tortoise and the hare? Well, you want to be the tortoise.
Diversify
You know what they say – don’t put all your eggs in one basket. That’s very true for investing in crypto. Don’t put all your cash on one coin. Bitcoin may be the best known of these currencies, but if anyone tells you it is the only one worth investing in, they are misinforming you. There are others that will likely out perform Bitcoin eventually. It’s better to have a spread across the Top 10 currencies, which currently are: Bitcoin, Ethereum, Ripple, Bitcoin Cash, Litecoin, Dash, NEM, NEO, BitConnect and Monero.
Buy in a range of blockchain categories
Blockchain technology has evolved to a point where currency is just one of the many functions a cryptocurrency can have. Ethereum offers ‘smart contracts’ and there are decentralised storage networks like Sia Coin, and exchange platforms like Waves. My suggestion is that you spread your investment throughout multiple options inside each category. This will allow you to reduce the risk of investing in one single currency.
Don’t ignore the new coins
Small market cap cryptocurrencies have more growth potential than the ones at the top. Of course, other factors will determine if the price rises, but the idea is that if you invest in a currency before it gets big, you will hopefully get to see your investment grow several times over. That doesn’t mean you should rush out and buy any new currency; do your research, read the white paper and the road map. Do everything you can to satisfy yourself that this is a product worth investing in.