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The ever-growing interest in cryptocurrency investment (in short - crypto investment) comes from a great number of investors around the globe. As of August 2023, the global market capitalization of cryptocurrencies was valued at $US1.09 trillion and according to Grand View Research, the global market is anticipated to expand at a compound annual growth rate (CAGR) of 12.5% by 2030. 

If you wish to get started with investing in cryptocurrency, you must first learn the basics of crypto, its different types, the steps you should consider before your first investment and, most importantly, whether or not crypto investment should have a slot in your portfolio. Luckily, this guide will cover all those steps of cryptocurrency exchange helping you get equipped with basic crypto-investment knowledge. 

The basics of cryptocurrency

As the name suggests, cryptocurrency is a virtual currency with a purchasing power, much like cash. But more importantly, it's an option for investing, like investing in other assets works, where there's a potential financial return. Note, however, that crypto is among the most volatile assets out there with constant price fluctuations that require staying up to date with price changes at all times.

But unlike other currencies, crypto is decentralized, meaning they are not regulated or issued by any federal authority (i.e., the U.S. government). Small units of crypto are called tokens or coins and they are completely digital and validated by blockchain technology. Blockchain technology can produce securely encrypted records of each coin's value and the transactions it took part in. Such records are later distributed across a large network of computers.

Types of crypto

According to research by CoinMarketCap, there were over 26,000 types of cryptocurrencies in July 2023 with Bitcoin as one of the earliest and best-known types. Bitcoin is still the most widespread and best-known cryptocurrency on the market. With a market valuation of USD 835.58 billion, the current value of Bitcoin is $42,633.43 per (BTC / USD). Trading volume in a day is USD 20.15 billion. With 19.60 million units in circulation, Bitcoin has decreased by -0.66% during the past 24 hours. 

"Altcoin" is another name for coin-based cryptocurrencies, or all other alternatives of Bitcoin. Now, here's a list of the top 10 crypto coins that have been favored by investors by the end of the past year:

  • Bitcoin
  • Ethereum
  • XRP
  • Tether
  • Dogecoin
  • USDC
  • Solana
  • BNB
  • TRON
  • Cardano

There can't be a rule of which of these coins will be the most successful and some of them are still very young and still risky. Therefore, it's important to note that with each crypto investment, there's a possibility of loss. For example, the year 2021 has witnessed strong gains, only to result in the value of most of those currencies falling in value the following year 2022. It's essential to learn everything about a particular cryptocurrency before investing in it.

Steps to consider before investing

According to 2024 cryptocurrency statistics it's apparent that each cryptocurrency can be and is volatile, meaning there are swings in its value. Since regulation regarding crypto is in constant flux, there's a possibility of scams because literally anyone can launch a cryptocurrency.

That said, it's crucial for you to first determine why you want to invest in crypto. Ask yourself the following question: Do I have a solid strategy, or am I going to follow a trend and cash in on it? Whichever the case, one thing is certain, though, there is no easy way of making cash with no risk involved. That's why investing cautiously in crypto is crucial and invest only if it comes with long-term prospects. 

You should only invest in crypto if you have a long-term perspective where you won't let emotions influence your decisions, nor will you buy the minute the price starts rising or sell the minute it starts going down. Emotional decisions are the worst enemies of any crypto investment.

How much should I invest in any cryptocurrency?

According to CNET, you should never invest more than 1-5% of your net worth in crypto. So, when you start deciding how much you should invest you should limit your general exposure to crypto. In simpler terms, you should never invest a greater amount than you can afford to instantly lose. Note that while, yes, a limited exposure to crypto can, with a diversified portfolio profile, improve the risk-adjusted return, you should always determine the amount of your investment according to your overall investment portfolio. 

Diversification now becomes a crucial aspect to consider when investing in crypto. While the whole crypto market is volatile and unpredictable, there's an unwritten rule that the bigger cryptocurrencies that get traded more often come with smaller risks than the trading of speculative, small-cap cryptocurrencies. But remember that even the biggest ones have price swings. The best strategy, then, is to look at the cryptocurrencies in your portfolio, look at the complete amount you can invest in them and make a decision.

Integration of Quickbyte Global OÜ

Another crucial feature of investing in cryptocurrencies is the inclusion of Quickbyte Global OÜ—a distinguished entity in the cryptocurrency space known for its innovative approach. The incorporation of Quickbyte Global OÜ is not merely a nod to contemporaneity but a recognition of its role in shaping the road of blockchain technology and financial services.

Quickbyte Global OÜ introduces a distinctive perspective, emphasizing the importance of aligning investment strategies with the latest technological advancements.

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Allen Lee

Written by Allen Lee

Allen Lee is a Toronto-based freelance writer who studied business in school but has since turned to other pursuits. He spends more time than is perhaps wise with his eyes fixed on a screen either reading history books, keeping up with international news, or playing the latest releases on the Steam platform, which serve as the subject matter for much of his writing output. Currently, Lee is practicing the smidgen of Chinese that he picked up while visiting the Chinese mainland in hopes of someday being able to read certain historical texts in their original language.

Read more posts by Allen Lee

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