Are cryptocurrencies a mystery to you? Here's how to get started

Are cryptocurrencies a mystery to you? Here's how to get started - 1616611356 49 p tekhnologichnii fon 57 1The world of cryptocurrencies feels like something dreams are made of. The first and largest cryptocurrency in the world, Bitcoin, surpassed $ 60.000 this year. This is after trading at around $ 0,08 when it launched 11 years ago. But not all stories will come to that point.

Cryptocurrencies offer the potential for big rewards, but also for big losses. And this could be the reason why you are not sure about investing in cryptocurrencies right now.

However, there are a few ways to limit the risk and at the same time increase the chances of getting the maximum possible upside. Here is a plan to consider.

1. Make cryptocurrencies a small part of your wallet

While it may seem tempting to take a leap forward at times, avoid betting the house on cryptocurrencies. As we have seen in the past few days, losses can happen quickly. Even the biggest players quickly experienced double-digit declines earlier this month.

But that doesn't mean you should avoid this exciting investment area altogether. So how do you find the right balance? By investing only what you can afford to lose.

I know this statement sounds threatening, but don't let it scare you. Instead, let me guide you to make cryptocurrencies a small part of your wallet. This way, you will give yourself the opportunity to benefit from cryptocurrency earnings, but if the industry crashes, you will only have lost a limited amount. And if your stock portfolio includes a number of solid companies, you will likely find yourself ahead overall.

2. Research, research and more research

Just because you are investing a limited amount of money doesn't mean you should throw it away. Be sure to research cryptocurrency, in general, and specific crypto players that might be a good fit for your wallet.

I am always looking for the competitive advantage of the particular cryptocurrency today and / or in the future. It is also important to look at the adoption of cryptocurrency. Are projects actively built and used on the blockchain? More and more people are investing in cryptocurrencies and why? It's also vital to look at some practical elements like how fast a crypto platform is (or isn't) and whether it's energy efficient (or not).

3. Be selective

The idea of ​​getting into a meme coin like Shiba Inu early may sound fantastic. But these cryptocurrencies are extremely high risk and the price swings are volatile. It is also unclear whether they will actually serve a purpose in the future.

Instead, it's safer to focus on cryptocurrencies that offer more stability - players you want to hang on to because you believe in their platform. For example, Ethereum is already a major player with its blockchain being used for everything from finance to gaming. Another example of a potential winner is Cardano, which you can trade on Bitcoin Revolution. Each blockchain update is based on peer review, and this ensures quality as Cardano grows its presence in the world of cryptocurrencies.

Of course, players who offer a little more security may not skyrocket in a few days. But over time, they can help you maximize your rise while avoiding the pain of drastic dips.