How To Invest in Cryptocurrencies 2021 Beginners Guide

If you want to succeed by investing or trading it is necessary to form and prepare for it. If we are talking about cryptocurrencies we must add some added difficulties compared to other traditional financial assets. First, it requires a learning process to understand its technology and peculiarities in addition to having high volatility and less liquidity than other types of investment.

Therefore, investing without any preparation can lead us to lose all our money so as a starting point I would recommend you: • Acquire general knowledge about blockchain and cryptocurrencies: their basic functioning, as a transaction occurs, where cryptocurrencies are stored and in general understand the entire blockchain-related ecosystem.

• Technical Analysis :it will allow you to analyze a chart, know at what stage of the market we are in and look for entry points as accurate as possible.

• Fundamental Analysis: when we want to invest in a publicly traded company we analyze its strengths, weaknesses, business model, certain ratios etc. To invest in cryptocurrencies we have to do something similar so we have to familiarize ourselves with certain ratios, metrics and factors to analyze in any project in which we are interested.

• Be informed about the latest news,both those directly related to cryptocurrencies and others at the macro level that can also influence the price.

Focus on long-term investment One mistake I made for quite some time was to be too aware of the short term and not have a broader view of the market.

With exceptions, I think we should forget about trading in short timeframes or intraday trading and it is better to focus on the medium and long term. The idea is to try to make a profit in the big stages of climbs and move away in periods of high noise and uncertainty. You have to try to go through much of the trend when you start a new bullish cycle.

In addition, focusing on longer timeframes reduces emotional and irrational reactions in the short term that most people are victimized when investing in any market. In short, you don't need to open cryptocurrency trades every day or week, as it will almost certainly lead you to generate losses. You'll probably make 80-90% of your profits during bullish cycles so for the rest of the time a good idea is to focus on preserving capital.

Worry about safety Most of you will have heard stories about stolen bitcoins, hacked exchanges, lost private keys, etc. When money is at stake it is important to take all possible security measures.

It is often said that we are our own bank when we use Bitcoin and cryptocurrencies, which implies that we are responsible for protecting our money. Some of the things you can do to keep your investments safe are:

me on exchanges than other cryptocurrencies and is also the first to trade on the regulated futures market. In addition, it continues to await the approval of an ETF that would allow a large number of investors to invest in Bitcoin without having to worry about the buying and storing process as we do now. • Bitcoin as a reserve of value: some features such as its scarcity or that have no correlation with any other financial asset causes it to gradually begin to be considered as a possible reserve of value as is GOLD. In the words of Jerome Powell, Chairman of the US Federal Reserve on July 11th, "Bitcoin is a speculative reserve of value just like Gold." Considering who is coming this statement must be taken into account.

For these reasons, in addition to some others, I consider Bitcoin to be the cryptocurrency with the greatest projection for the future and as a better chance of having a massive adoption. Therefore:

• I always have as a point of reference bitcoin when analyzing the market and planning the strategy to follow. • When investing in cryptocurrencies, I always keep a % high in BTC as it usually performs well even though at certain times some altcoins may have higher yields.

FOMO: watch your emotions Some technologies may be new, but people's behavior is old. Markets from their origin are largely moved by emotions and the strongest are fear and greed. The expression "FOMO" (fear of mising out) whose translating is something like fear of missingsomething, refers to the emotions named above and that lead us to make wrong decisions.

Very often, when a cryptocurrency we want to invest in starts to increase its price quickly, we are tempted to enter for fear of staying out and not making money. You should avoid buying by chasing the price in this way since many times at the time of buying, the price will start to correct and we will get caught in losses. As a significant example, we can think of many people in December 2017 entering Bitcoin highs of about $20,000 guided by the FOMO. What's this for? That on the other hand the big investors were selling the Bitcoins they bought at lower prices which led after the price drop and at the beginning of the bearish cycle in which many people got stuck.

The way to avoid being swept away by emotions is to create an investment plan and follow it. Let's not enter when the market is widespread when we should have done it earlier under our investment plan.

The cryptocurrency market is very volatile and unpredictable, so to begin with we can start from strategies such as the DCA (Dollar Cost Averaging),in which we make purchases spaced over time. We will not capture the soils of the market, but we will achieve acceptable yields.

On the other hand, being aware of our emotions and detecting in this case the feeling of thinking that we are going to stay out is a first step to correct it. Conclusion

These have been the things that I consider most important when it comes to starting investing in Bitcoin, Etherum, Ripple, EOS, BNB or any other cryptocurrency you are interested in. Many of them I have learned along the way because of the mistakes made, so I hope they will help you and avoid stumbling on the same stones.

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