Purchasing bitcoin isn’t the end-all solution. These are 4 ways to start investing in cryptocurrency without losing all your money.
I’d be richer than some of the cryptocurrency millionaires making headlines if I had a dollar for every email I’ve received with the words “bitcoin” or “NFT” in the subject line during the last few years.
That may be a slight exaggeration.
However, I will add that separating the fanfare from the realities in this industry is really difficult.
New data shows that a majority of young billionaires hold the majority of their wealth in cryptocurrency, despite “experts” on the internet touting it as the “investment of a lifetime.”
What comes next? Kim Kardashian is endorsing a cryptocurrency that isn’t well-known. Oh, hold on…
Then there’s the recent severe sell-off in the cryptocurrency market, which reflects the market’s continuous volatility and anxiety about the future.
In my research, I’ve discovered that investment professionals and financial and tech journalists agree that cryptocurrency has become a part of our lives and will not go away.
At the same time, there is a great deal of investment misinformation.
Too many people make financial decisions based just on emotion and speculation.
Georgia Lee Hussey, the creator of Modernist Financial in Portland, Oregon, believes, “Investing should be dull.”
“You’re doing it incorrectly if you’re overly enthusiastic about your portfolio. There is no more to say.”
Spencer Jakab, a longtime Wall Street writer and author of The Revolution That Wasn’t, believes we don’t have to engage at all.
He says, “There’s no rhyme or purpose to it… I’m not a fan.”However, we can’t help but be intrigued.
Many of you have expressed an interest in learning how to approach this market with clarity and substance.
Is there a method for testing the crypto waters that is calculated, emotionally savvy, and strategic?
I’ve come up with a few suggestions on the best 4 ways to start investing in cryptocurrency without losing all your money.
These are the top 4 ways to start investing in cryptocurrency without losing all your money.
1. Look into crypto-related job opportunities
Working for a cryptocurrency startup is one method to “invest” in the market. And there are now more options than ever before.
According to LinkedIn, the number of crypto-related job openings in the United States increased by 395 percent between 2020 and 2021.
This is about four times the number of job openings in the larger tech industry.
Lauren Post, a corporate communications executive, was hired by Bakkt, an Atlanta-based digital asset platform, after spending the most of her career working for traditional financial firms like TIAA and BlackRock.
Bakkt, which went public last fall, collaborates with non-crypto companies who want to provide bitcoin experiences to their customers.
This includes collaborating with credit card firms to provide crypto benefits to cardholders, as well as collaborating with banks to assist them in integrating crypto trading into their platforms.
“Because I didn’t know anything about crypto,” Post wrote in an email, “I was both intrigued and slightly frightened.”
However, after working in traditional financial services, I understood that learning about crypto was no different than learning about target date funds, fixed income, credit default swaps, or any other aspect of finance.
I also recognized that the abilities I’ve developed for explaining hard concepts to laypeople can be used to any sector and are particularly relevant in the cryptosphere right now.”
2. Think about Stablecoins
Not a fan of attributing your cryptocurrency’s success to a rally caused by a tweet from Elon Musk?
In 2021, a new cryptocurrency genre dubbed stablecoins emerged, promising less volatility and a closer link to established forms of value than its rivals.
According to crypto genius Julian Dossett, stablecoins are “cryptocurrency with a twist.”
He goes on to say: “A stablecoin’s price is derived from the worth of another asset, rather than being’mined’ by an open, distributed network of computers conducting a combination of arithmetic and record-keeping.
In a nutshell, a stablecoin is a cryptocurrency that is linked to another asset.”
The value of several stablecoins is tied to the US dollar.
Dossett suggests imagining a stablecoin as chips at a poker table.
Instead of purchasing bitcoin or any other cryptocurrency with fiat currency such as the US dollar, you pay cash to purchase stablecoins, which are available on most crypto exchanges, including Coinbase, and then trade stablecoins for other cryptocurrencies.
3. Get involved with blockchain technology
A blockchain is a digital ledger that facilitates and records bitcoin transactions, but it is capable of much more.
A blockchain, more broadly, can bring much-needed efficiency and security to a variety of businesses, from insurance to real estate, finance, and legal, thanks to its decentralization and encryption.
Consider blockchain if you want to learn more about the cryptocurrency sector.
It’s time well spent for anyone looking to improve their business or figure out how to make the most of the technologies they use at work.
As an investor, I believe in the blockchain concept.
To that end, I’ve decided to put a small amount of my retirement savings into BLOK, a fund that includes well-known firms like Square, Paypal, and Nvidia that are investing in blockchain technology.
4. Are you still interested in purchasing cryptocurrency? Start with a 5% cap and broaden your horizons
If you want to invest in cryptocurrencies, go ahead, but just because it’s a new asset class doesn’t mean you should abandon tried-and-true portfolio management approaches.
For starters, don’t put your money on the farm.
We should keep our holdings of so-called alternative and relatively high-risk assets like cryptocurrency, real estate, and start-ups to no more than 5% of our whole portfolio, according to Hussey and many financial experts.
“It’s a brand-new asset class,” Hussey explains. “We don’t fully comprehend the market because it was not designed to be comprehended.”
5. Finally, buy a variety of cryptocurrencies
Remember that diversity helps to limit losses over time, no matter how sure you are in a single digital coin.
(You don’t want to be like some of the early internet investors who put all their money into pets.com.)
“Even if you’re highly confident in a bet, if you have reason to believe you have an edge, you don’t bet all your money because there’s no such thing as a guaranteed thing,” Jakab explains.
“Not even the most experienced gamblers invest exclusively in a single category.”
