What do you need to know before buying a crypto?
It is impossible to deduce unified “trading rules” that would bring newcomers closer to the level of those who have been working on the market for decades, and would be 100% insured against unprofitable transactions and investments. But there are basic laws on which more detailed, narrowly sharpened information and experience are layered. These are not new rules, but they are still relevant today in order to understand which crypto to buy:
- Do not invest all your capital in one coin. A rule known even to people far from investing. In the case of crypto, buy both expensive and popular coins, and cheap ones that are just starting to grow. Two of the top and two less popular are advised, but the proportions are a matter of taste.
- Buy a coin after a fall, and not after a pump – a jump up. The growth of the coin will not last forever, so those who bought bitcoin for $ 20 thousand definitely cannot be called seasoned traders. It is profitable to buy a coin after a fall and stagnation, next to a value below which the price did not fall or was reluctant to fall. This value is a resistance level, and the price tends to “bounce” from it.
- Focus on news. The more plans the developers of the coin have, the more they develop the product, the higher the significance and credibility of the coin, the greater the chances of a rise in price. Significance and trust are determined by capitalization, the recognition of the currency by organizations, funds and countries, the desire of developers to cooperate with banks and centralize the currency. The recent fall of the coin and a step towards its well-being on the part of the developers is a trading signal to buy.
- Separate coins for long-term and short-term investments. For the long term, stable coins with high capitalization, promising, with an active development team and owners are suitable. Coins with high value and user loyalty. For short-term – volatile inexpensive coins, dynamically developing and sensitive to market movements.
Where to store cryptocurrency: choosing a wallet!
Regardless of the purpose of buying a crypt, to store it, you need a wallet – a place where electronic money will be stored. There are the following types of cryptocurrency wallets :
- Hot (or online) wallets do not involve installing separate software on the user’s computer. Of the good ones, we single out Coinbase, Cryptonator, Blockchain.
- Cold – released as a program that is installed on a PC. Of the shortcomings, we note the need to download the entire blockchain, its size can be tens of gigabytes. There are also small cold wallets that do without downloading the entire blockchain. There are many of them, Jaxx, Electrum, Exodus have proven themselves well.
- Paper – all information for accessing the wallet is encrypted in the form of a QR code, it is not stored on the site. The user prints the paper and stores it in a secluded place. An example of such a wallet is BitAddress.
- Hardware – produced as separate devices resembling a USB flash drive. Maximum safety of the crypt, suitable for storing large amounts. The best ones are Ledger, Trezor, Keep Key, Pi Wallet.