It took cryptocurrency being named the top-performing asset of the decade to truly arrive on the scene. Suddenly a hot topic in investment circles, many consumers are incorporating digital assets into their portfolios. We know about the stock market, but is crypto right for you? Let's take a look at how to invest in cryptocurrency, and everything else you need to know before taking the plunge.
What is cryptocurrency?
The golden rule of investing in crypto is to always understand it, whether the concept as a whole or a new coin and know everything there is to know before parting ways with your capital. So what is cryptocurrency, exactly?
Cryptocurrency is digital cash that can be transferred from peer to peer without the need for a third party (such as a bank or financial institution). Using blockchain technology, all transactions are executed quickly, no matter where in the world they might be going. Easily bought with fiat (regular currencies), crypto provides a strong store of value and medium of exchange, and can just as easily be sold for fiat again.
While cryptocurrency remains largely unregulated, governments around the world are working on legal frameworks that will properly install crypto into the world's financial landscape. Typically, cryptocurrency's values are displayed in US dollar amounts.
Crypto as a store of value
If you had bought Bitcoin in April 2020 it would have cost $6,882. Two years later, in April 2022, Bitcoin was trading at $40,566. That significant growth, 490%, is what people have come to expect from crypto investments.
The markets are still largely volatile as we observe large price swings across most coins. While this volatility is seen as a negative, particularly when it comes to adopting crypto as a payment method, it does pose a valuable solution for new investors wishing to enter the market and day traders.
Crypto as a medium of exchange
In 2010, Laszlo Hanyecz asked a Bitcointalk forum if anyone could help him buy two Papa John's pizzas for 10,000 BTC. A member, "jercos", agreed to help. Hanyecz sent him the 10,000 BTC, worth roughly $30 at the time, and jercos got the pizzas delivered to his house. This marks Bitcoin's first real-world transaction. (That Bitcoin would be worth $405 660 000 today.)
As adoption has increased over the years, more merchants are accepting Bitcoin and other cryptocurrencies for goods and services. Whether buying flights, booking hotels, buying shoes or even paying taxes in Switzerland, people are able to do so with their cryptocurrencies. As cryptocurrencies become more regulated this pool is expected to grow significantly.
How to invest in cryptocurrency
Investing in crypto is not for the faint-hearted, but can be wildly lucrative if you do it correctly. Below we will cover the pillars of what you need to know when learning how to invest in cryptocurrency.
Find a cryptocurrency to invest in
The most tedious of the steps to complete is doing your own research. From Bitcoin to Ethereum, Cardano to Chainlink, there are plenty of cryptocurrencies out there each providing a unique use case.
It is imperative to understand what the project offers and to take a look at the platform behind the coin. At Tap we've vetted many projects and been selective in which coins we want to incorporate into the platform. With tens of thousands of projects on the market, consider this curated version a good list to start from.
What's the deal with researching a cryptocurrency? Learn about the cryptocurrency so as to make an informed investment decision and avoid big mistakes.
Buying the Cryptocurrency dip?
After deciding which cryptocurrency to invest in, the next step is to buy the cryptocurrency. This might sound daunting, but with Tap is far from. Combining the convenience of a mobile app with the security of a financial institution, Tap offers a seamless and highly secure way to purchase (and store) crypto.
First, you will need to download the app and create a profile. Once this step is complete, you are free to buy and sell as many cryptocurrencies as you please.
You can then load your account with fiat through the Cash wallet, and once this clears, purchase the cryptocurrency you wish to buy through the Crypto wallet. Tap also offers users in certain regions a Tap card, free of charge, that allows you to spend your portfolio on the high street.
As with any investment, treat cryptocurrencies with the same regard: never invest more than you're willing to lose, avoid trading based on emotions, and don't fall for any hype. #
Whether you want to test the market with one coin, or dive right in with a few coins, be savvy with your trades and assertive with your objectives.
Bonus: Earn yield on your crypto
Investing in cryptocurrency is typically done to obtain long term gains. While you can still profit from the gains made on the coin, Tap also allows users to earn yield on their crypto investments. A savings account for crypto, if you will.
Through the app, simply transfer the digital or fiat currencies of your choice to the Earn wallet (available to withdraw at any time) and earn yield based on rates specific to that currency. Your generated yield is paid out on a weekly basis, allowing you to see immediate results.
Should i invest in cryptocurrency?
There have been many ups and downs in the crypto market over the last decade, some investors have witnessed incredible gains just as some have experienced considerable losses. If you've got what it takes to ride the waves of volatility, the end result might be well worth it. Investing in crypto? the choice is yours.
Disclaimer: This article is intended for communication purposes only, you should not consider any such information, opinions or other material as financial advice.