Less than 10 years ago, if you talked about Bitcoin and its current price, they would have doubted your sanity; But today's world is where the biggest banks in the world buy Bitcoin; The largest technology companies have added Bitcoin to their treasury; Payment industry giants like Visa and PayPal make money from buying and selling digital currencies to their users; Celebrities and influencers are constantly tweeting about digital currencies, and many artists are selling their artwork in the form of non-currency tokens (NFTs). All these signs indicate that the public's interest in digital currencies is increasing constantly. The truth is that in such a situation, being apathetic to this issue and not being tempted to invest is not an easy task at all; Especially when you start to use your Instagram and see the professors Instagram who insist on making you rich overnight with digital currencies, give guaranteed profits and steal your heart and religion by showing charts and profits of thousands of percent!
All these factors have caused many people to feel that these days they are missing a golden opportunity and to rush and panic to decide to enter this unknown world. If you are one of these people who wants to invest in digital currencies according to the fever that has recently swept the whole world, I must say that it is better to wait. I do not mean that investing in these currencies is wrong or vice versa; the goal is to inform you of the risks of this market so that you can enter this field with more awareness; Because ignorance, excessive optimism, and prejudice will have no result but failure.
In this article, which is written by Asiasignal, we are going to explain what digital currency is and how you can start this type of financing and you can recognize how to reduce the risks of this market.
Significant points about how to start investing in cryptocurrency
Be suspicious of too-good-to-be-dreamy projects
Like any other financial market, the world of digital currencies is full of scammers and fraudsters investing in cryptocurrencies. In this world, every day you come across people who claim that their project is going to replace Bitcoin; But out of every hundred projects, maybe one will be successful and last.
Of course, sometimes there are ads that are not scams and are really serious; But their problem is that they only show you the good side of the story and it is your duty to discover the negative side as well. for example, Digital currency exchanges. There are those that allow you to lever 100 times in Margin trading use. Well, this is a great possibility and if successful, it will significantly increase your chances of making a profit; But if things go against your prediction, you will experience a terrible loss.
Investing In Cryptocurrency
Reduce risks in cryptocurrency investment
A complete risk management of investing in cryptocurrency should include topics such as: emotion management, cryptocurrency investment portfolio management, determining loss limits, paying attention to the risk/reward ratio. In the following, we explain the impact of each on risk management in the market.
Managing emotions
Experience shows that all traders set certain strategies at the beginning of their activity; But during trading, they get involved in emotions and do not proceed according to the rules and strategies they have set. When we buy Bitcoin at the peak of the price and the so-called tip of the peak, when we do not pay attention to the extent of our losses and keep the share at prices much lower than the loss.
Experience shows that all traders set certain strategies at the beginning of their activity; But during trading, they get involved in emotions and do not proceed according to the rules and strategies they have set. When we buy Bitcoin at the peak of the price and the so-called tip of the peak, when we do not pay attention to the extent of our losses and keep the cryptocurrency at prices much lower than the loss, we are actually involved in our emotions.
Investment portfolio management
The digital currency market is a highly volatile market. Reduce your investment risk by investing in several different cryptocurrencies. Do not allocate all your capital to one cryptocurrency. Buy several different currencies so that if you lose one, the profit in another currency will compensate for your loss. In addition, it is better to always keep some of your assets in cash that you can buy if you find a cryptocurrency at the bottom.
Determining the limit of loss (Stop Loss)
Using a stop loss, especially in margin trading, will protect your assets from complete destruction. Sometimes our forecast is not correct and the trend of the price of the cryptocurrency we want does not go according to our analysis. In such a situation, selling the asset after activating the loss limit is a wise and far from emotional decision. Avoiding emotions and following strategies such as loss limit is an important pillar in digital currency market risk management.
In any situation, stick to your loss limit and do not act under the influence of your emotions. You may lose your entire capital in the hope that the price of your cryptocurrency will return to an upward trend.
Compliance with the risk/reward ratio
The risk-to-reward ratio indicates how much loss a trader is willing to accept in order to obtain the desired profit. To understand this concept, assume that the risk-to-reward ratio of trading is 2 to 8. In fact, we are willing to lose 2 dollars of our property for 8 dollars of profit by doing this transaction. Calculating the risk-to-reward ratio of a transaction is very effective in managing market risk and reducing possible losses.
Fake digital currency scams through fake pages
Another type of cryptocurrency fraud creates fake web pages. In this method, fraudsters create fake cryptocurrency trading platforms or fake versions of official crypto wallets to trick unsuspecting victims. These fake websites usually have domain names that are similar but slightly different from the sites they are trying to imitate. They are very similar to legitimate sites, which makes it difficult to tell the difference.
These websites are usually very elaborate and offer legitimate activities such as exchanges or IPOs. Fake pages are created so that they are a complete copy of a legitimate project and offer the same services, except that they are scams. Fake websites use valid URLs to build trust, but change one of the letters. For example, they replace English letters such as m with n or 0 with o.
Ways to prevent fraud from fake pages
Usually, the fraud method of fake pages is done in two ways:
1. Phishing pages: All the details you enter, including the password of the digital wallet, the recovery phrase and other financial information, will end up in the hands of fraudsters. arrive
2. Straightforward theft: At first, the site may allow you to withdraw a small amount of money. Since your investments seem to be performing well, you may invest more money in the site. However, when you subsequently try to withdraw your money, the site either closes or rejects the request.
Scammers of fake pages usually use a typo in the address of an exchange or web wallet. For this reason, be sure to carefully check the address of the websites where you want to make crypto investments. Also, watch out for fraudulent emails like offering free bitcoins or winning a lottery or something similar. These types of messages are phishing messages that you may encounter through email or internet advertisements.
What is a portfolio of digital currencies?
When it comes to cryptocurrency investment portfolio, you will probably come across terms like portfolio. A digital currency portfolio is a complex amalgamation of an investor's crypto assets in appropriate proportions. The main task of a digital currency portfolio is to ensure minimum risk and maximum return for the investor.
Unlike stock market investment portfolio, risk diversification in digital currency investment portfolio is done not by investing in different assets, but by acquiring one asset in different tokens. If, according to financial experts, the value of creating a traditional investment portfolio is only possible with large capital, for the digital currency market, creating a portfolio is suitable even for small investments. Therefore, in addition to diversifying risks, the portfolio of digital currencies allows you to participate in a larger number of projects, those investments that can bring high income at the initial stage.
Investing strategies
Is a digital currency investment portfolio worth it?
Creating an investment portfolio of digital currencies from different tokens can indicate an increase in successful investment opportunities. The digital currency market is young, but it will also develop rapidly. Not all investors were able to understand the prospect of investing in digital currencies with their real value, but we must say that recently the demand and interest of investors has greatly increased, and this interest can lead to a continuous increase in the value of coins for any relatively successful project. Most tokens represent things that can benefit humanity and attract new audiences for new investments.
As you know, with the growth of investments, the cost of coins increases steadily, but it is almost impossible to accurately calculate which project attracts the most investment. By choosing a strategy for a digital currency investment portfolio, you can count on minimal risk only in projects such as Bitcoin and Ethereum that have been successfully implemented or are being implemented, but you should not expect a rapid increase in its value, however, you should It was pointed out that start-up projects have the possibility of thousands of percent profitability, which is subject to successful implementation, and naturally, the risks of financial investment in them are also significant. Accordingly, the investor expands the possibilities of profitability by investing in cryptocurrencies and at the same time maintains stability with proven investments.
Rules for investing in digital currencies
- Investment in different fields
Blockchain is a unique new technology that has already been used in many fields, but since blockchain is a very young topic, it is very difficult to say which industry will be used the most. Therefore, you should create a balanced and diversified investment portfolio in digital currencies. The idea we have for you is to balance your digital currency portfolio so that you don't invest too much in one industry.
- Strengthening positions in the most promising fields
Even if your cryptocurrency investment portfolio is balanced across various blockchain applications, you can consolidate your position in those assets you are familiar with and see growth potential.
There is a preconceived notion that there will be only one winner in each sector and only one cryptocurrency at the top of each industry. If you look at the real business sector, you can see that many currencies are important in every area. The same will happen with the use of blockchain in the early stage of the era we are in now. It is important to identify the most important ones in each set and bet on them.
For example, suppose you have thoroughly studied the field of decentralized application platforms and are sure that they will be in demand in the future. The value of companies and products in this field increases, the number of users and the experience of real applications are increasing day by day. In this case, it makes sense to strengthen the position in assets such as Ethereum, NEO, etc.
Different types of crypto assets
In this section of the cryptocurrency portfolio article, we will highlight the types of crypto assets that you can use to diversify your asset portfolio. They are basically divided into four different categories, which include the following:
Platform Tokens:
Platform tokens are known to enable technology in smart contracts. Ether, as a precursor, allows crypto-assets to be easily executed with the help of codes! Finally, it generates many tokens.
Utility tokens:
Functional tokens are defined as tokens with specific purposes and applications. Some popular examples include BAT, KNC, MKR, ZIL, OMG, and CRO. Their goals are wide from one industry to another.
Principles of currency selection for digital currency investment portfolio
As we have already seen, the mainstay of a cryptocurrency investment portfolio is a high level of diversification. Experienced traders recommend adding three to nine cryptocurrencies to the wallet. They name the main criteria for their selection.
Feelings, opinions and suspicions
First of all, you need to analyze whether there is a core idea behind cryptocurrency, whether it has a practical application, whether it solves a real problem for users? Does it offer a better transaction than other cryptocurrencies or a faster asset exchange? Offers
Direction change cycle
Here you need to consider the behavior of cryptocurrency over long periods of time, the presence of sharp jumps and falls, the current market price, as well as the total and average daily trading volume. If the volume of transactions increases, it means that new capital will continuously flow into the digital currency.
At the same time, it is important to analyze whether this longevity is due to the regular increase in popularity of digital currency. Is the increase in transactions just due to the fraud scheme? Experienced traders find the answer to this question by carefully observing the charts of changes in digital currency market indicators. Many of them only recommend adding cryptocurrencies with a market capitalization of $100 million and above to their cryptocurrency investment portfolio.
Thematic community
For investment, it is better to choose cryptocurrencies that are supported by an active community. Prioritize projects with comments, for example an official community or an open platform for developers.
News background
It is very important how often and in what context digital currency is mentioned in the media. Is it written about in website rankings? Do they discuss on topic forums like org? Is there a fuss about the currency on the news channels?
According to experts, the basic rule for creating an investment portfolio is the right proportion of known, expensive, cheap, but promising digital currencies. So many investment plans can work.
How to create a digital currency investment portfolio?
The important and basic principle of the correct distribution of assets in an investment portfolio is to diversify the assets. A cryptocurrency portfolio should have all the tools to earn money and reduce risk in the right proportions. Most of its components should contain popular cryptocurrencies with stable growth and demand among users. Experienced investors have used many optimal strategies to create a digital currency portfolio.
For an accurate and low-risk investment, you should pay attention to the following:
- 80% of the total investment should be made in coins with a fixed exchange rate and leading positions in the ranking of invested digital currencies.
- Allocation of 15% to new currencies with high liquidity and average price.
- Leave 5% for tokens of promising projects that are in the early stages of development and have a small fee.
As you know, as the investment risk increases in the future, its profitability also increases. For the riskiest investments in the portfolio, you can consider projects that can generate amazing income with minimal investment. In this case, assets should be divided according to the following principle:
- 60% invest in major cryptocurrencies.
- Allocation of 25% to popular markets with fixed exchange rates and growth prospects.
- 15% for investing in tokens
The best investment portfolio is digital currencies - based on proven strategies - otherwise, misallocation of the portfolio can only increase losses, but will not generate income at all. Very high rates of high-risk investments can nullify the income from profitable projects.
Introduction of cryptocurrency investment benefits
- High potential for significant profits
- Very high capital security in very secure and decentralized blockchain technology
- Very high liquidity
- Very high transparency of the digital currency market
- The possibility of buying and selling 24 hours a day, 7 days a week
- Easy buying and selling
- Variety of trading methods to earn more profit
- Providing advanced trading tools
- Providing special trading tools to reduce trading losses
- Protecting the identity of users and traders
- The possibility of investing with little capital
- Diversity of coins and financial assets
Important factors of choosing a digital currency for investing
To choose a cryptocurrency to invest in, several factors are considered. The first factor is the history and age of digital currency. Of course, emerging digital currencies may have a good position one day, but we cannot recommend investing in them anytime soon. Another factor is the performance of the digital currency development team against problems, which somehow guarantees its stability in the future. During the lifetime of digital currencies, there are many ups and downs. Paying attention to how the people responsible behind them have dealt with these problems, along with checking the price stability of that digital currency, can make us more confident about its future.
Another factor is technical and technological. Many digital currencies are actually tokens for a specific project, so as long as the technology used in a project is advanced and secure, a bright future can be imagined for that cryptocurrency. Acceptability of cryptocurrencies is another factor in this choice.
Risks of investing in cryptocurrency
Fluctuations in digital currencies
As we said, there are always fluctuations in the digital currency market. Even digital currencies with a history like Bitcoin may change their price from moment to moment and hour to hour. But these fluctuations should not cause much concern because if your goal of buying digital currencies is a long-term investment, temporary price fluctuations should not distract you from your long-term goals. Important digital currencies such as Bitcoin may fall in price during short periods, but in the long term, the price will return to an upward trend, and in the long term, you have not lost.
Do digital currencies have bubbles?
Perhaps you have heard this saying many times that the market of digital currencies, especially Bitcoin, has a bubble and sooner or later, when the bubble is empty, its price will collapse. The simple definition of a bubble in economics is an asset that is priced higher than its real value and sooner or later will return to its real value. To answer the question of whether the price of Bitcoin is a bubble or not, one must first understand exactly how the bubble is formed.
When one person is willing to pay a higher price to buy something, and the next person is willing to offer a higher price, the price goes up little by little. But when there is no new money in that market, then the first person who wants to sell that asset, there is no new money in the market to buy it, so the seller has to lower the price. This causes more people to start selling that product after seeing signs of a price drop, and this chain repeats continuously until the price falls below the intrinsic value, and at this price, smart people in the market make large purchases to be able to profit from price fluctuations.
Comparison of Bitcoin profit with gold and dollar
For hundreds of years, gold and dollars have been known as safe assets. But Bitcoin has only been launched for over a decade and has only gained recognition in the last few years. In addition to history, other effective factors play a key role in comparing these valuable assets, which we have discussed below:
Transparency, safety and legality
Gold and dollars are great for trading and investing. Of course, if your gold coin or bar is stolen, tracking it is very easy and fast. For this reason, it is difficult to create fake gold in the market and sell it. The same issue is related to the dollar. It is difficult to create fake dollars and sell them. Bitcoin can hardly be fake or problematic thanks to its decentralized encrypted system and sophisticated algorithms. But the infrastructure to ensure it has not been fully provided yet.
Cryptocurrency stability
In recent years, a number of digital currencies have emerged with the aim of providing more stability compared to Bitcoin. For example, Tether is one such currency. Tether and the US dollar are in almost the same condition as gold was before the 1970s. Investors who want less volatility in digital currencies may want to invest in cryptocurrency’s other areas, i.e. stable coins such as Tether or Dai.
Which of the Bitcoin, Gold and Dollar assets are better to invest in, in 2022?
Finally, one of the greatest cryptocurrencies to invest in 2022 is Bitcoin. If we pay attention to the above information and the fact that digital currencies have a lot of room for improvement, we will realize that in 2022 or even several years after that, it is beneficial to invest in Bitcoin and other digital currencies. So carefully analyze the profit of Bitcoin with gold and dollars. Considering all the points presented in the above material, it can be said that this method of investment is a smart method of investment.
Crypto investors
Why we should buy digital currency?
Many digital currency enthusiasts believe that these investments can create a new class of millionaires (or billionaires), But those who don't have invested yet may wonder if there are compelling reasons to start investing. In the following, we will read some of the reasons why people may want to buy digital currencies, as well as some other considerations before investing.
- Cryptocurrencies have been described as disruptive technology that could revolutionize several industries.
- As cryptocurrencies cannot be printed or confiscated, cryptocurrencies may also provide a secure store of value.
- Investing in digital currency is very profitable.
- Digital currency transactions are independent and flexible.
- Security and transparency are the main foundations of digital currencies
Important points you should know before investing in digital currency!
Many people around the world are trying to learn more about digital currencies. Even people who don’t have any idea how to enter this field, are now seriously thinking about it. If you also decide to buy and sell and start investing in digital currencies, before starting investing there are some points you should pay attention to. In this article, we intend to mention the investment points of digital currencies and explain each of them, but before that, it is better to have a relative familiarity with digital currencies and how they work. Cryptocurrency as a digital or virtual currency is secured by cryptographic methods. Many cryptocurrencies are decentralized networks based on blockchain technology that runs on a distributed ledger by a diverse network of computers.
How does cryptocurrency work?
Cryptocurrencies run on a distributed ledger called the blockchain, where a record of all transactions updated and maintained by the holders of the currency is kept. Units of digital currency are created through a process called mining, which involves using computer power to solve complex mathematical problems that generate coins. Users can also buy currencies from brokers, then store and exchange them using crypto wallets.
What is blockchain?
Blockchain is a special type of database where information is stored. But a series of special features distinguish blockchain from other databases. There are a series of rules for adding new data to the blockchain. Also, once data is added to the blockchain and stored, it cannot be edited or deleted. Data in the blockchain is structured by consisting of "Blocks" And the information enters the blocks. Each block builds on the previous block and contains information that connects it to the previous block. Due to the fact that these blocks are connected to each other by information, they form a "chain" in which the blocks are placed together in order of construction. Genesis Block is called the first block.
Types of cryptocurrencies
Nowadays, there are more than a thousand cryptocurrencies in the cryptocurrency market. Each digital currency that is created and joins the cryptocurrency market claims to have different functionality and features than other cryptocurrencies. Although there are thousands of cryptocurrencies, some of the most well-known include:
Bitcoin: Founded in 2009, Bitcoin was the first cryptocurrency and is still the most popular digital currency for investment. As we said, this digital currency was created by Satoshi Nakamoto.
Ethereum: Developed in 2015, Ethereum is a blockchain platform with its digital currency called Ether (ETH) or Ethereum, and Ethereum after Bitcoin is considered to be one of the most popular digital currencies to invest in.
Litecoin: This digital currency is most similar to Bitcoin, Litecoin is a peer-to-peer Internet currency that enables instant, near-zero cost payments to anyone in the world.
Tron trx: Tron is a decentralized digital platform that is based on blockchain with its digital currency called Tronix or TRX. Founded in 2017 by a private Singaporean organization, Tron aims to host a global entertainment system for the cost-effective sharing of digital content.
Ripple: Ripple is a distributed ledger system founded in 2012. This system can be used to track various types of transactions, not just digital currencies.
Altcoin: The term altcoin is derived from the combination of the two words alternative and coin; Altcoins are digital currencies that were created after Bitcoin. After the remarkable success of Bitcoin among people and traders, many developers created coins to achieve the same success as Bitcoin.
Token: In the digital currency market a "token" is a digital currency that does not have its independent blockchain and is transferred on other networks such as Ethereum. some biggest tokens in the digital currency market, we can mention Tether, Chainlink, Dai, Aave, Yearn, Finance, and BAT.
Stablecoins: Stablecoin is a type of cryptocurrency that does not fluctuate in price. This type of digital currency is a simple and safe way to make financial transactions. The value of Stablecoin depends on a stable asset or commodity.
NFT: Non-fungible token (NFT) means unique and digital asset. Unlike Bitcoin, Ethereum, and other digital currencies that are symbolic and have interchangeable units, each NFT unit has specific characteristics that distinguish it from other units.
In order to buy the most suitable currency, it is better to get acquainted with the types of digital currency analysis. In the following, Asia Signal's experts will explain the types of digital currency analysis.
Fundamental and technical analysis of digital currencies
One of the most important conditions for success in the digital currency market or any other financial market is the ability to correctly predict the future process of that market and decide how to conduct transactions in it. Only people who can correctly predict this process will succeed in making a profit in these markets.
Therefore, before entering this market, all people who intend to start working and investing in the digital currency market need to be aware of the basic terms and analysis methods in this market so they can rely on this analysis and invest and trade in it with full knowledge. The most important methods of analyzing the digital currency market include fundamental analysis and technical analysis, however, technical analysis is used to predict the short-term process of prices and fluctuations and it is more popular, in this article we will introduce both methods of digital currency analysis.
Fundamental analysis: Fundamental analysis (or FA for short) is a detailed and comprehensive review of available information about a financial asset. Among the important tips in the fundamental analysis of digital currencies are the plans of a project, the number of people who use it, sponsors, and the support team of the project.
Technical analysis: Technical analysis is mainly used to predict the process of digital currency's price in the short term. The emphasis of this type of analysis is on the price of digital currencies and it is believed that only by observing the history of cryptocurrency's price and analyzing the relevant charts, processes of the market that related future be predicted.
Most investors who want to evaluate long-term investment decisions begin with a fundamental analysis of a company, an individual stock, or the entire market. Fundamental analysis is the process of measuring the intrinsic value of a security by evaluating all aspects of a business or market. Tangible assets, including land, equipment, or buildings owned by a company, are considered in combination with intangible assets such as trademarks, patents, brand names, or intellectual property.
Some tips before investing in digital currency:
The field of digital currencies is new. A very large percentage of the community still does not properly understand what Cryptocurrency is and how it works. Most of these people think digital currencies are a profitable investment, but the point is that many of these people invest their wealth in digital currencies without really knowing what they are doing. So before investing in this field you must be prepared to accept what you’ll get.
- Be ready to accept high risk: Indeed, the digital currency market sometimes is very profitable, and 5 years ago if you had bought some bitcoin with a small amount of money, it would have turned into a large investment, but the truth is that this market is due to its special conditions (such as being unsupported and high volatility) has a lot of risks. These currencies are not like listed companies that have income and own real estate, factories, raw materials, and so on. Cryptocurrencies are nothing but a string of code. Keep in mind that no one, regardless of how long they have been in the market, can predict the price of these currencies.
- You have to be very precise: Maybe this point seems a little obvious, but before you do something, make sure that you are doing it with full awareness and alertness.
- Increase the security of your account: There are many online, offline, and hardware wallets for digital currencies. Also, many platforms have been created to buy and sell these currencies. But not all these wallets and tools and platforms are valid and reliable. It’s better not to use the same password on different sites. Keep the private keys which are your access key to your wallet in a safe place. Online wallets are often the target of attacks and hacks. Backing up your wallet and not keeping large amounts of money in online wallets is another way to increase security.
- Before investing, you should have enough knowledge about the currency you want: It’s important to have great research about your desired currency and actually when you know everything about the currency you want to invest in, helps you to buy and make better decisions and recognize the best type of cryptocurrency.
- Avoid making decisions based on emotion: Emotional buying and selling also exist in the digital currency market. This is one of the characteristics of novice traders who buy or sell currencies when they see signs of price growth or decline and often do not get good results.
- Avoid Ponzi schemes: Ponzi systems are systems that collect people's wealth in different ways under the pretext of paying profits to investors, and of course, at the beginning of their work, they also pay profits to the i the future process of the market can initial investors. This profit is provided by the money of the next investors, and the company or the person receiving the capital does not need to do any economic work with the money received. Ponzi schemes are exposed after some time and it is the investors who are cheated and lose money. To quickly recognize a Ponzi scheme, first of all, refer to your common sense and logic. Any system or site that promises high profits in the short term and the identity of that person or company or their activity is not properly clear and transparent, is most likely a Ponzi scheme.
How can we buy digital currencies?
After all these considerations, now we should buy digital currencies but how can we buy digital currencies?
Buying from an Iranian money exchanger:
In the buying guide of digital currency, you must first register in an Iranian online money-changer's hall (a place you can exchange money) so that you can convert Rials to Tether or any other currency that exists, after registration and authentication, follow the steps of buying digital currency:
1. Choose a broker: A broker is a financial services company whose job is to provide a convenient platform for buying and selling international currencies and other assets through a trading platform. Brokers act as intermediaries who interact with buyers and sellers.
2. Create and verify your account: Once you choose a broker or cryptocurrency exchange, you can register and open an account. Depending on the platform and the number of currencies you want to buy, you may have to verify your identity. This is an essential step for preventing fraud and considering federal regulatory laws. You may not be able to buy or sell cryptocurrency until you complete the verification process. The platform may require you to submit your license or one of your identification documents, and you may even be required to upload a selfie to prove that your appearance matches the credentials you submit.
Buying from a foreign exchanger:
1. Login to Coinbase or Innes, Hobby.
2. Select Buy/Sell on the platform.
3. Click on the Buy field to select the asset you want to buy.
4. Enter the amount you want to buy in your digital currency or local currency.
5. Choose your payment method
6. Click “Preview Buy” to vouch your purchase.
7. If the details are correct, click on buy to complete the purchase.
How to choose a reliable exchange?
There will be many answers to the question of what criteria and conditions an exchanger should have in order to be considered a safe exchanger. In general, exchangers which are active in the field of digital currencies are divided into two types, store exchangers and trading market exchangers. To choose the best exchange, first of all, try to find and answer the following questions about the exchange:
- Does this exchange have an acceptable work history?
- Does this exchange ensure the wealth of its users?
- Who is the main manager of this exchange?
- How influential and famous is it in the digital currency market?
- Which digital currencies are covered in this exchange?
Please note these criteria for choosing the best digital currency exchange:
- Exchanger period activity
- Services
- Smartphone's application
- Exchanger’s security
- Wage
- The price of buying and selling digital currency
- Users Panel
- Number of supported digital currencies
Different Types of investment in the cryptocurrency market:
There are different types of investing in the digital currency market that you can make a profit by choosing one of those methods. Because of that, in this part of the article, we are going to introduce the various methods of investing in digital currencies and how to use these methods so you can have a profitable investment:
daily trade or manual trading: One of the investment methods in digital currencies is daily trading. It is better to know that the digital currency market has a lot of price fluctuations, and these price fluctuations provide opportunities for traders to earn a lot of profit, and you can use these opportunities too. Of course, if you can identify the best buying and selling points and make transactions at these points, you must know technical analysis and be able to check the status of digital currencies and predict the price of cryptocurrencies. In this way, if your price predictions are more accurate, you will gain a lot of profit from the trades.
Digital currency mining:
Another type of investment in digital currencies is mining. For this, you have to get the required hardware equipment, such as a miner, and use them to mine the digital currencies that can be mined. The important point is that digital currency mining is an expensive process, and also you must have a lot of wealth and a lot of electricity will be consumed.
Digital currency staking:
Another type of investing in digital currencies is staking or depositing digital currencies. Staking is also the process of generating new digital currency by the proof of stocks algorithm. In this method, you can participate in this process and earn profit by locking your assets or digital currencies in the money exchanger or digital currency wallet. Staking has many advantages that make it popular with investors and active users. Among these advantages, we can mention the security increases and stability of blockchains. In other words, digital currency staking helps the continuity and growth of the blockchain that supports it and increases its security level. One of the most important advantages of staking is that it eliminates the need to constantly buy expensive hardware. Also, reducing energy consumption is another advantage of stacking. In other words, the staking process consumes less energy than mining.
Holding digital currency:
Another type of investing in digital currencies is holding digital currencies for the long term. you should choose digital currencies which you predict will have a price increase. Also, to hold digital currencies, you must know fundamental analysis and use secure digital currency wallets such as hardware wallets.
Participate in airdrops:
Another type of investing in digital currencies is participating in airdrops. Airdrop means sending free digital currencies from the creator of that currency or the site related to some users. It is better to know that many times newly established companies based on blockchain use this method to advertise and increase their users. In addition, some digital currency exchangers and wallet providers also conduct airdrops to attract new users or retain their customers. To know the news about the airdrop, you can visit the digital currency developer's website or their virtual pages and get informed about this news.
Participating in free airdrops requires a series of actions that you must do. The first step is to use a suitable digital wallet. Since the tokens distributed in airdrops are usually based on Ethereum, it is recommended to use a digital wallet that also supports Ethereum. But having a digital currency wallet is not enough and you must be active in it because free tokens are usually given to active users.
Digital currency arbitrage:
Another type of investment method in digital currencies is the use of the arbitrage method, The profit obtained from the price difference of a digital currency between two or more exchangers is called arbitrage. Traders have the possibility to find exchangers with the lowest and highest prices by checking the price of digital currency in different exchangers and gaining benefits from this price difference.
Digital currency Lending:
The digital currency lending system allows you to increase the number of your assets by earning profits from the financial resources you have. Basically, the way it works is that you lend your assets on the cryptocurrency exchange to margin traders, and they pay you interest or profits in exchange for borrowing these financial resources.
What is a Decentralized Exchange (DEX) Initial Offering (IDO)?
The first distribution or public sale of a token or coin of a project is called an initial offering. The aim is wealth funding needed for the development of the network or the distribution of its token among the people and the expansion of the project. All projects need financial resources to develop their network; Expanding cooperation, listing in centralized exchangers, attracting experts to expand the team of the project, holding advertising campaigns, holding bug bounty, and evaluating the project's codes to avoid possible problems, which includes the required costs to launch a project in the field of cryptocurrencies.
How can we maintain our investment in the digital currency market?
During these 12 years that Bitcoin and the digital currency market have started their activity, we have seen their price fluctuation cycles many times. Many of these cryptocurrencies have a history of multiplying their value within a few days and even a few hours, and some others have lost half of their value in the same period. Although most of these price decreases have resulted in price improvements and increases, the time it takes can be stressful and very difficult for investors. So, we are going to help you to maintain your investments in this market:
- don't decide based on your emotions and stop being emotional: Following the news and the current process of the digital currency market is one of the common activities among investors, but be aware that paying too much attention to this information can also cause problems. This issue is especially important in a descending market because there is a possibility of getting emotional and making rash decisions. Such mistakes have been repeated so much that special terms have been considered for them. The first term is FOMO, which stands for Fear of Missing Out. The second one is the term FUD, which is made up of the words Fear, Uncertainty, and Doubt. These terms are used when people buy or sell digital currencies based on their feelings.
- Set a clear goal for yourself: Even if you are certainly sure of the success of a particular digital currency, you should invest the amount of money in cryptocurrency so that you don't have fear of losing that money. The worst thing that can happen to any investor is to stare at their assets and their decreases with the hope that they will increase one day. The best thing is not to invest in only one type of cryptocurrency and divide your capital among several reliable and promising digital currencies. Secondly, since the digital currency market is open all day throughout the week and has much more volatility, you should set price targets for yourself before entering into a transaction. This means that you should know at what price you want to take your profit or if the price drops below a certain level, it is better to exit the deal and wait for a better position.
- Keep your cryptocurrencies: If you buy a digital currency and its price decreases, you still don't have a financial loss until you sell it. Consider Bitcoin, which has maintained its long-term upward process over the years, despite its price decreases. Do not forget that Bitcoin and similar cryptocurrencies have a limited supply and this scarcity will increase their value in the long term. Therefore, if you have invested in digital currencies with multi-year goals, these price reductions should not affect you.
- Don't forget to save or keep profit and buy at price reductions: One of the safest and most convenient ways to avoid the extreme fluctuations of digital currencies and their price decline is to convert part of your assets into currencies that have a fixed value. You are taking part in the profit you gain from the price increases and you'll wait for another suitable point to entry.
- Seize the opportunity: Even when the cryptocurrency market has reductions there are countless opportunities to gain profit. It is noticeable that to know where to invest. In such a situation where others see nothing but fall and darkness, a new window has been opened for opportunistic investors towards low prices. Of course, be careful about buying digital currency.
Profits and losses of Digital currency
All investors who enter the field of investing in digital currencies should be apprehensive of the advantages and disadvantages of this field and decide with awareness. In general, the profit and loss of investing in digital currencies are explained as follows:
The profits of digital currency:
One of the most important and basic advantages of investing in the digital currency market is that with this you can do international transactions and get profits at the dollar rate, and this issue has made this category one of the most important types of investment and the attention of many people and the whole world.
Another reason for the elevation of digital currencies and their recent popularity is that in this investment system no one deals with fiat money currently and deals are done with digital currencies. A problem that can be used to avoid inflation and get relieved of it.
Another demonstration that has attracted the attention of numerous people and engaged them to invest in this area is the high security of the blockchain network. Networks that are safe from the influence of hackers and stealers, and investors and possessors of digital currencies who are authentically concerned about the security of their assets and can confidently engage in activities and transactions in this market.
Furthermore, people don't have any restrictions on the quantum of currency they want to invest in and buy and sell for digital currency investments. In this market, everyone can invest any amount they want without any restrictions.
The losses of digital currency:
Investing in digital currencies, with all its advantages, also has disadvantages. One of the main disadvantages is that digital currencies do not benefit from any insurance and have no support, and if they have problems for any reason, people's wealth will be destroyed.
The fluctuations that digital currency markets face is very high and unavoidable, and therefore, to protect our wealth from these fluctuations and not lose it, we must have sufficient and necessary knowledge in this field. People need to learn how to trade using relevant charts and graphs so that they can control and manage their wealth among the high volatility, not only to not suffer heavy losses but also to earn good profits.
Another disadvantage that can be mentioned for investing in the digital currency market is that there are no clear rules in this market, and this causes a lack of confidence among different people, and due to the lack of transparency, it is possible that people can the intermediaries of these virtual currencies do money laundering.
You must know that all people and participants of the digital currency market have the ability to manage and control their funds, and whether they keep these funds in digital currency exchanges or wallets related to this work, it is important to have a user account and password for themselves This issue, along with its advantages and merits in terms of high user account security, is considered one of the disadvantages of this market. Because if the investor dies and does not have any password or username in the hands of others, his entire capital will be lost and without having this information, it is not possible to enter his account or wallet and withdraw the desired asset.
Closing remark
Investment is an act in which a person converts his cash into one or more different types of assets and earns profit in return for it in the long term. Basically, investment is done with surplus capital and part of the wealth that a person can afford to lose. In fact, by investing in cryptocurrency, instead of working harder, a person uses his financial resources wisely and earns money.
Another thing to mention about investing in cryptocurrency is using free signals. Free signals are a group of signals that are provided to you for free and without paying any money; It cannot be said that these signals are useless, but you should know that they are less reliable than non-free signals and have a higher percentage of errors. Pay a little money and get Asiasignal’s VIP indicator which is an awesome help for all professional people.
Digital currencies are truly pure phenomena with extraordinary ideas that can change our future world. The idea of these currencies is so serious that many people believe that in the future there will not be such a thing as paper money and future children will only see paper money in their history books. In the digital currencies market, there are fraudsters and profiteers who gain profits from the ignorance of new users. Your knowledge should be enough to block any fraud and protect your wealth. In short, it never hurts to do more research. The world of digital currencies is so complicated that no matter how much you explore them, you will still come across new things. So don't limit yourself and learn and experience as much as you can. You can get help from Asiasignal experts to increase your knowledge and at the same time invest in the digital currency market with sufficient knowledge.
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