How To Find The Best Cryptocurrency For Your Needs [4 Things To Know]
Since the development of Bitcoin, thousands of other digital currencies have also emerged in the market - with more and more being added every year. Given this wide array of choices, curious crypto investors might find it challenging to decide on important things such as where to invest their digital assets, how to transact in cryptocurrencies, and whether staking tokens is worth it.
Despite its well-known volatile nature, cryptocurrency remains popular and in demand, where investors look for ways to invest in it. While experienced traders have been keeping an eye on crypto for years, the struggle lies with newbies who are new to the market and looking to join the crypto-verse.
How to buy cryptocurrency
The first thing you need to do if you want to start investing or trading is to choose a cryptocurrency platform - a place where crypto enthusiasts can buy, sell, or trade their cryptocurrencies. There are different platforms in the market with unique benefits and features, but beware as not all of these platforms have the purest intentions. With the constant increase in crypto scams, discovering reliable platforms to trade on is a must. The Bitcoin Motion Tech trading platform is a good example of a platform that can only better your trading experience rather than expose you to any risks.
After choosing an exchange, the next thing that you must do is sign up to create an account. Always read the full terms of trading before proceeding. The steps that you need to follow depend on the requirement of the platform you choose - some require you to verify your identity to prevent fraud. Note that you need to complete the whole verification process before being able to do transactions; this includes submitting your passport or license, along with a selfie as proof.
Lastly, you need to deposit funds in your created account to buy crypto. You can deposit money into your account by linking your bank account, wire transfer, or paying with a credit or debit card. Depending on your chosen platform, you may have to wait a few days before you can use the money in your account.
4 Things to note when choosing cryptocurrencies
With the thousands of cryptocurrencies out there, it’s reasonable to feel confused about which ones to buy. Depending on your trading strategy, there are certain tips that you may want to follow. Generally, here are four things that you should note when choosing cryptocurrencies.
1. Consider market capitalisation
One of the best ways to select which cryptocurrency to buy for investment is through their market capitalisation. When it comes to this factor, the leading cryptocurrency by market cap is Bitcoin with 43%, followed by Ethereum with 19.6%, which, if added together, comprises 64% of the market. With this data, it’s safe to say that these two are the foundations of the crypto world, so it’s wise to allocate some of your investments to these two.
2. Total available coins
It’s also important to note the number of total available coins in the market - whether there is going to be a limited supply of this particular cryptocurrency and the available coins that are already being used. For instance, the overall supply of Bitcoin is limited to mining 21 million coins only, but in 2021, the number of coins available is at 18.7 million, leaving only 2.3 million coins to be mined.
3. White paper
It’s given that every cryptocurrency has a white paper that consists of all details like its purpose, issues it will solve, and the technology it uses. The white paper also mentions the creator of the coin’s vision on why they created this coin; if you find the white paper realistic, you may consider investing in that coin with a minimal amount. The white paper has slowly been implemented in the real world through the years.
4. Use cases
Another thing mentioned in the white paper is the use cases of a certain coin - which is the main factor that drives acceptance among its users. As many traders progress their careers, new use cases may get developed, which leads to more use cases, the wider the coin’s acceptance will be and the more it increases in value.
To ensure the chance of success, inventors should follow an appropriate asset allocation, which some refer to as diversification. Some experts recommend diversifying in various asset classes, including debt, equity, gold, real estate and cryptocurrency investments. As with any investment, make sure to align your investment goals with your current financial situation to avoid experiencing loss in just a matter of time.