When the CEO of the world’s 5th largest company by market cap takes a positive public stance on cryptocurrency, that says a lot, right? Andy Jassy expressed optimism about the future of cryptocurrencies and NFTs in an interview with CNBC following his first annual shareholder letter as Amazon CEO.
So, when such influential personalities express their opinions on something, people are bound to follow that blindly. Take Elon Musk’s tweets, for instance. One tweet about a particular crypto can shoot its value to the moon or bring it down, crashing onto the face of the earth, digging a hole!
And because we don’t want you to be following fads blindly or entering the crypto town based solely on tweets, we bring you a comprehensive guide on the best cryptocurrency to invest in. So, let’s get started for the ride of your life!
Key Takeaways
- A cryptocurrency is a digital currency that is represented by an encrypted data string.
- A peer-to-peer network known as a blockchain monitors and organizes it, as well as serving as a secure database of transactions such as buying, selling, and transferring.
How to Invest in Cryptocurrencies
If you’re new to the crypto world, figuring out how to invest in Bitcoin, Dogecoin, Ethereum, and other cryptocurrencies can be difficult. Thankfully, with us here, learning the ropes is rather simple. Here are four simple steps for you to begin investing in cryptocurrencies.
- Select a broker or crypto exchange
- Create and verify your account
- Deposit cash and place your crypto order
- Select a storage method
While purchasing cryptocurrencies is currently popular, it is unpredictable and risky. If investing in cryptocurrency on an exchange or through a broker isn’t for you, we have a few additional ways for you to invest in Bitcoin and other cryptocurrencies indirectly:
- Wait for cryptocurrency Exchange-Traded Funds (EFTs)
- Invest in companies connected to cryptocurrency
How to Choose the Best Cryptocurrencies
Welcome to the future! Here the investing goes on 24/7. So, before you get all your funds and start investing in cryptocurrency, let us walk you through the basics. Because we want you to make a handsome profit out of it and not get burnt by the extreme volatility of the crypto markets.
Today, there are a ton of cryptos that are actively traded! But, how do you choose the best cryptocurrency to invest in? Because there are so many newcomers in the crypto realm, most individuals get the fundamentals of investing wrong. Here are 10 easy ways to pick the best cryptocurrency to invest in.
- The Community
The following of a cryptocurrency is a part of its success. Seek cryptocurrencies with large communities and dedicated followers since this indicates that people are genuinely interested in and believe in the cryptocurrency. See what people say about your potential investment on multiple subreddits, YouTube channels, and community comments.
- Fundamental Analysis
The underpinnings of an investment – its personnel, aspirations, strengths, and so on – are referred to as fundamental analysis. Fundamental analysis will benefit you just as much as technical analysis in the long run.
- The Technology
The underlying technology is crucial to a cryptocurrency’s success. You must comprehend how it will perform compared to the competition and what makes the technology unique. Keep an eye out for the major innovations in the cryptocurrency space that can fundamentally disrupt the status quo.
Let’s use Ethereum as an example here. Ethereum is now one of the top cryptocurrencies in terms of technology due to:
- Smart contracts: A technology that makes it easier to trade anything of value. Although it’s a little technical, you might not want to dig into that now.
- The Ethereum platform is built to make it simple for developers to integrate the blockchain into their apps.
- The Ethereum Virtual Machine (EVM) technology makes it easier for developers to design larger-scale applications.
Today, Ethereum has quickly risen to become one of the most popular cryptocurrencies globally because of its cutting-edge technology.
- The White Papers
Whenever a new cryptocurrency is released, it is usually accompanied by white paper. This explains the coin’s purpose, technology, how it operates, and general vision. A white paper is one of the greatest places to assess a coin’s fundamentals, and you should never buy it until you’ve read its white paper.
While there are no safe bets in the crypto world, our thoughts here will assist you in selecting a smart investment with strong fundamentals.
Market Tracker: Top 10 Cryptocurrencies that Should be a Part of Your Portfolio
In 2023, the best-performing cryptocurrencies allowed investors to outperform the market rate of return on other assets, such as stocks and commodities, by many times. Not all the top-performing cryptos in 2023 were household names; the list included several new and well-established entries based on market capitalization.
While conventional wisdom recommends diversifying your portfolio among equity, debt, mutual funds, and money market instruments, cryptocurrencies have arisen as an alternative and maybe an experimental asset class for some high-risk investors. Regardless, you must conduct your due diligence like with any investment decision. Depending on your risk appetite, you may or may not wish to invest in cryptocurrencies.
We have a list of the top 10 cryptos that you should glance over. Again, we are not recommending these assets as crypto markets change by the second and crypto is still in its nascent stages. So, do your own research before you proceed!
- Bitcoin (BTC)
Market cap: $880 billion
- Ethereum (ETH)
Market cap: $415 billion
- Tether (USDT)
Market cap: Over $70 billion
- Binance Coin (BNB)
Market cap: Over $68 billion
- U.S. Dollar Coin (USDC)
Market cap: Over $53 billion
- Solana (SOL)
Market cap: $44.5 billion
- XRP (XRP)
Market cap: $40 billion
- Cardano (ADA)
Market cap: $39 billion
- Terra (LUNA)
Market cap: $37.5 billion
- Avalanche (AVAX)
Market cap: Over $26 billion
Hunt for the Best Cryptocurrency: Types of Altcoins
Bitcoin developed its reputation as the king of cryptocurrencies in the crypto wild west long before any other forms of coins were produced on the blockchain. Other coins, dubbed altcoins, had to wait in line.
Alternate cryptocurrencies to Bitcoin are known as altcoins. There are many different cryptocurrencies to choose from, each with its own features. Metaverse tokens, for example, can be used to make payments in the metaverse, while stable coins can be used to deal with market volatility.
There have been numerous altcoins introduced over time. And in the hunt for the best cryptocurrency to invest in, we will take you through the primary altcoin types:
Mining-based
Mining-based altcoins, like Bitcoin, are created through the process of mining. Litecoin is an example of a mining-based coin.
Stable coins
Stable coins are a new type of altcoin that aims to eliminate volatility in the cryptocurrency market. They’re digital assets that are pegged to fiat and physical assets (off-chain) as well as crypto collateral by design (on-chain). Algorithmic stable coins are managed by a smart contract at their core and are not backed by on-chain or off-chain assets.
Security tokens
Security tokens are a sort of altcoin, a digital or liquid asset representing a share of ownership in a physical asset. Security tokens are the blockchain equivalent of shares stored on a distributed ledger. They can represent an interest in IP, an automobile, or property, among other things.
Utility tokens
Utility tokens were once popular during the 2017 initial coin offering (ICO) frenzy, not tied to any currency or tangible value. Investors would receive some utility tokens in exchange for their investment in the early phases of an ICO, as defined by the firm or project owner.
Following the funding, the utility tokens will be used as a coupon or voucher to purchase products and services from the issuer.
While no altcoin has yet successfully dethroned Bitcoin in terms of value, numerous projects have proven themselves worthy of the attention of a global investor and developer community.
Investing in Cryptocurrency: The Do’s and Don’ts
Approach crypto investing in the same way you would any other investment. Filter out the noise, conduct thorough research, and only invest when you are certain.
While names like Bitcoin may be familiar, most people’s awareness of the subject ends there. Before you get into cryptocurrencies, it’s always a good idea to learn the do’s and don’ts. So, here we are with a quick list for you.
| Do’s | Don’ts |
| Have a strategy for crypto trading | Buying just because the price is low |
| Manage risk | Going all-in |
| Diversify your crypto portfolio | Thinking crypto is easy money |
| Be in it for the long term | Forgetting your crypto keyphrase |
| Automate purchases | Falling for scams |
| Use trading bots |
Did You Know?
The overall daily turnover of crypto trading in India is between INR 1,000 and 1,500 crores. This is less than 1% of India’s daily stock market trading volume of INR 2,00,000 crores.
Investing in Future, Investing in Cryptocurrency: Reasons to Get Started
Everyone approaches crypto investment with their own goals in mind, whether to invest quickly and make gains or thoughtfully & gradually grow wealth over time. Compared to the day-trading heavyweights who purchase and sell assets during stock market hours, investing in crypto may be a no-brainer. Crypto may even appear inevitable for our social media-driven future to younger customers.
However, most crypto investors aren’t just interested in popular meme coins like dogecoin. From amateur traders to institutional investors like JPMorgan Chase, everyone is beginning to consider cryptocurrency, Web 3 technology, and the metaverse as a lucrative trifecta.
So, here we’ll go through a handful of the most typical reasons you should get into crypto and, more importantly, why stay.
| Earn potentially lucrative returns |
| Protect your wealth from inflation |
| Have total control over your investment |
| Adds diversification to your portfolio |
| Enable and benefit from innovation |
Word to Remember
ICO
An Initial Coin Offering (ICO) is a sale of new cryptos to investors for the first time. In the world of stocks and shares, it’s equivalent to an Initial Public Offering (IPO).
Conclusion
Cryptocurrency is a fascinating area, whether you feel it is a fleeting fad or the future of money. Remember, if you wish to get into investing in cryptocurrency, keep these things in mind:
- When prices are increasing, it’s easy to get carried away.
- Price corrections and crashes are unavoidable.
- Treat investing in cryptocurrency as a game of chance.
- Never wager more money than you can afford to lose when looking for the best cryptocurrency to invest in.
And before we bid adieu, a word of advice from our side. As cryptocurrencies are not subject to regular norms and regulations, this could lead to unintended consequences. Therefore, you should exercise caution when investing in cryptocurrency.
FAQs
Once you’ve purchased your crypto, you’ll need to keep it safe to avoid being hacked or stolen. Cryptocurrency is usually kept in crypto wallets. Hot wallets and cold wallets are the two primary types of crypto wallets.
The phrase market capitalization (or market cap) is used in the blockchain industry to describe a metric that gauges the relative size of a cryptocurrency. It’s computed by multiplying a coin’s or token’s current market price by the total number of coins in circulation.
Market Cap = Current Price x Circulating Supply
Don’t think of cryptocurrency as a quick cash grab. Instead, look at it as a chance to learn about a new asset class without risking anything. Start by learning about altcoins like Tether, Cardano, and others and their working before investing in them. Investing in altcoins is subjective and personal factors need to be considered before you start.
A cryptocurrency ETF could be an excellent alternative for those searching for a more traditional approach to investing in crypto. Investing in crypto directly can be hard, as it requires determining how the asset will be housed and which exchange to use to make the transaction. Crypto futures contracts are packaged into ETFs, which removes some complexity. The ETF structure may make it easier for certain institutional investors to enter the cryptocurrency market, which may help maintain the high crypto demand.
To own a cryptocurrency, you don’t have to buy one. You can earn cryptocurrencies by using computers to solve cryptographic problems. Validating data blocks and adding transaction records to the blockchain is also part of this procedure.
