Many investors face difficulties in gaining full access to cryptocurrency trading. This is not surprising, because, for example, only in October 2022, 11 hacker attacks were carried out on the crypto market, according to https://buidlbee.com. We will share with you some tips that will help you feel more confident in the world of cryptocurrencies.

Choosing an exchange and a broker

Every day there are more and more cryptocurrency exchanges in the world. To avoid getting confused about the variety of choices, an investor needs to know the key parameters to find the most reliable trading platform.

Let’s single out the main criterion:

• Reputation. The best acquaintance with the exchange is to read reviews about it on social networks.

• Commission. Buying, selling, or exchanging cryptocurrencies is accompanied by commission costs. The lower the value, the better. A good indicator is no more than 0.25% per financial transaction.

• Liquidity. The more investors there are on the exchange, the easier and faster it is to make a transaction with digital currency.

• Payment options. Some exchanges may only support a limited list of deposit and withdrawal methods. It is worth paying attention to this before you start registering on the site.

• User verification requirement. There are exchanges that do not allow investors to trade cryptocurrencies without identity verification. Others give such a right, but with certain financial restrictions.

As for cryptocurrency brokers, their task is to help the investor open an account on the exchange, place an order for the purchase or sale of digital currencies and provide analytical information on each financial asset. The choice of a broker is carried out according to similar criteria.

Select a storage method

A cryptocurrency wallet is a place where a secret key is stored for accessing cryptocurrency. The digital coin itself is always in the blockchain system. There are two types of cryptocurrency wallets: hot and cold. In addition, wallets are divided into three groups among themselves. Let’s consider them in more detail.

Hardware wallet

It is a cold way to store assets. Accordingly, it is not connected to the Internet and does not depend on the performance of online cryptocurrency services. It is difficult to hack into this type of wallet and steal money from them.

Software wallet

Refers to the hot type, respectively, you need access to the Internet. There are web wallets in the browser, desktop wallets on the computer, and mobile wallets on the smartphone. In terms of security, they are less reliable than hardware ones.

Paper wallet

It is a sheet of paper with the address of the cryptocurrency printed on it and a private key in the form of a QR code. It has a high degree of security and acts as an analog of cold wallets.

The use of one or another type of virtual wallet depends on the purpose of buying cryptocurrency. If an investor buys a digital asset for the sake of frequent transactions on the exchange, then software wallets are better suited. If trading with cryptocurrency is not planned shortly, then the best option is hardware or paper crypto wallets.

Rules for successful crypto investing

Profitable investment in cryptocurrencies is a complex process that requires the investor to comply with the rules that will not only protect against potential losses, but also provide an opportunity to earn in the future.

Cryptocurrency investment tips for beginners:

• make an investment plan;

• establish a mechanism to limit financial losses;

• invest only that part of the capital that you are not afraid to lose;

• approach the investment process without emotions;

• don’t trade on margin.

The most important thing when investing in digital currency is to buy only those virtual assets that you personally understand. Deep market analysis from various services can be a good help for learning cryptocurrencies, but make an investment decision based on your own judgment.

Risks

Investing in cryptocurrencies comes with many risks that every investor should be aware of. These include a high level of fluctuations in market quotes; the prohibition of cryptocurrencies in many states; regular hacker attacks on exchanges; the inability to cancel the erroneous transfer of virtual coins.

There are no guarantees for the safety of virtual wallets. You should also remember that an increase in the number of mined digital coins reduces the subsequent profitability of mining.

As you can see, there are enough negative sides when investing in digital currency to be wary of such investments. Despite a significant increase in the value of some cryptocurrencies and the introduction of their use in various areas of society, do not forget that the acquisition of a virtual asset is a high-risk investment.