How to start a cryptocurrency – how to start earning money?
Although cryptocurrencies have been on the list of the most popular topics for years, many people are still not convinced about blockchain technology, never mind actually investing Cryptocurrency exchanges. The circles of people involved in speculating on the prices of coins such as Bitcoin or Ethereum are still associated with many myths that effectively discourage potential investors. After all, technically investing is not difficult in itself. We would all want to try to cash in on fluctuations, but let’s ask ourselves: cryptocurrencies, sure, but How to start a Cryptocurrency?
How to start a Cryptocurrency in 2021?
The first and most important stage of the process is deciding whether investing in cryptocurrencies is the right option for us. How to start operating on the markets by minimizing risk and what can you expect? Before depositing your money, be aware that there is a high risk tied to How to start a Cryptocurrency. The prices of instruments based on blockchain technology are very volatile and require a specific, careful approach. Certainly, this is not a task for the faint of heart – price fluctuations often resemble dynamic increases and decreases known from the penny stock markets. What constitutes the risk associated with trading in these types of markets is also their greatest advantage – many cryptocurrencies are developing very dynamically and aggressive, exponential growth is expected from them. If you accept the aforementioned risk, you can start preparing for trading.
The beginnings of earning money
The first thing you need to do after answering the question in the above paragraph is create the correct account on a Cryptocurrency exchange. This will allow you to buy cryptocurrencies in exchange for traditional money, i.e. fiat currencies. If you’re asking How to start a Cryptocurrency, you can choose from many cryptocurrencies, such as Bitcoin, Bitcoin Cash, Ethereum, Litecoin or Ripple.
Diversification of assets
One of the popular investment techniques is portfolio diversification, i.e. parallel investments in more than one type of Cryptocurrency. This option is particularly interesting due to the fact that often prices of these assets are negatively or positively correlated with each other – similar to the Forex markets. When choosing an exchange, one should pay attention to the trading volume, i.e. the total value of transactions carried out on a given market. One of the platforms with ones of the highest turnover numbers in the Cryptocurrency markets in the world is, for example, the Binance platform. After investing in selected cryptocurrencies, you need a wallet that will help you store them safely. In this case, one should use comparison engines and rankings available on the Internet to help them with making the right choice.
Value based on… a promise of value.
Many people believe that cryptocurrencies are not trustworthy and that trading platforms are not properly secured. The stereotypical view about this type of investment speaks of huge losses resulting from market volatility and fraud from platforms. Although from the perspective of a layman, such opinions seem justified, cryptocurrencies are slowly emerging as a strong contender that might overthrow traditional money. The first question that arises in opposition to the above thesis is – how can virtual, artificially generated value displace money as we know it? Well, we have based our whole modern economy on such imaginary, arbitrary values held together simply because we believe in their strength. The money that you carry in your wallet every day has no real value – unlike currencies from the relatively recent past, which were covered e.g. in gold.
Bitcoin, Ethereum and the like may soon turn out to not only be worthy competitors for the Euro, Dollar or Zloty, but they may even replace them as payment methods because they are much safer.
One should remember this when considering investing in young cryptocurrencies. How to start a Cryptocurrency with this kind of asset? It would be the best to start at the earliest stages of their development – those who noticed the value of Bitcoin less than a decade ago know it well.
Just like investing in classic stock markets, buying cryptocurrencies will not always turn out to be profitable. With this in mind, you should only invest when you have sufficient capital, so that the potential loss will not affect your life. That’s not all – before setting any order, you need to make sure that you have done sufficient homework on your budget management. Many beginners ignore money management as an unnecessary means of caution, which usually ends up wiping out the account to zero and adding another brick to the wall of infamy that surrounds stock speculation.
In that case, if you are interested in cryptocurrencies and how to start trading according to universal rules that will help you avoid severe losses? One of the most important rules is the calculation, which will allow you to limit the risk to only 1-2% of the total budget for the transaction – this is the absolute core rule, and respecting it will immediately increase your chances of final success.
How to start a Cryptocurrency? First you need to learn
If you are already eyeing particular cryptocurrencies, how to successfully speculate on their prices? The markets for instruments based on blockchain algorithms have their own rules and tools that regularly prove to be useful e.g. on the Wall Street Index or precious metals markets, may turn out to be useless here. Before investing, you should read the in on the details and specification of each Cryptocurrency and choose the ones that suit your trading style. To see how important this issue is, you simply need to look at the methods of operation of financial institutions, such as mutual funds. These companies own all sorts of assets that they buy and sell to manage their risk – no professional puts everything on one card.
Technical and fundamental analysis
If you want to successfully earn money on Cryptocurrency, you should know what you’re dealing with. While the main method in the trading world as such is technical analysis, you must also pay attention to fundamental analysis. It’s simply the general information about the instrument and its’ current environment. Investing in the US30 index on the brink of the economic crisis in the United States would not be a reasonable decision and similarly – it wouldn’t be smart and learn How to start a Cryptocurrency.
Take care of the safety of your money.
Cryptocurrencies are not regulated by large institutions, as is the case with traditional instruments.
In the markets of some coins, this can have unpleasant consequences, as lack of regulation means many more potential scammers and fraudsters. So it’s best take care of the safety of the invested funds, carefully reading the opinions about the stock exchange before you use it’s services.