financialtreat – will explain about How to Wisely Invest in Cryptocurrencies that you will get in the following article. let’s look at this article carefully!
It is undeniable that nowadays investment has become popular for young people in Indonesia. There are so many types of investments that are increasingly diverse, one of which is the type of Cryptocurrency investment. However most novice investors are not exactly how he invests then this time I will give you a Wise Way to Invest in Cryptocurrencies. let’s look at it further.
Types of Cryptocurrency Investments or crypto investments types of crypto asset investment that are being favored by young people. This investment can look complicated but it can actually be started by anyone. Therefore, I will discuss about Crypto type investments for beginners. But before that we will give you the definition of Cryptocurrency Investment, let’s see more.
Definition of Cryptocurrency Investment
Cryptocurrencyis a digital or virtual currency secured by Cryptocurrency. With the existence of Cryptocurrencies, making cryptocurrencies is almost impossible to fake. Cryptocurrency can be used as a means of payment for online purchases and exchanged into currencies such as dollars, yen, rupiah and other currencies.
Since the pandemic, this investment has been increasingly idolized by investment lovers, especially for young people. next we will discuss how to invest in Cryptocurrencies
How to Use Cryptocurrency as an Investment
The way to invest with cryptocurrency is to carry out buying and selling activities of assets on the exchange. This exchange functions like a marketplace, a platform that brings together buyers and sellers to transfer crypto assets. Crypto asset transactions occur between members or traders of members of the exchange.
Unlike the transactions on the stock exchange, where the investor must pass through the broker as an intermediary, on crypto exchanges, direct transactions occur between investors. There are no intermediary brokers in transactions on bitcoin exchanges.
The storage of bitcoins or crypto assets is carried out in a ‘wallet’. It’s exactly the same when we have money, it’s stored in a wallet or safe, but the difference is that bitcoin storage is done digitally. Wallets are provided by exchanges or investors can have their own wallets. Just like a customer who keeps his money in a bank or at home.
To Make a Crypto Asset Transaction
Investors must choose the ‘pair’ of coins to be transacted. The exchange will provide various pairs on the platform. An example is Bitcoin / Rupiah (BTC/IDR).
Because bitcoin transactions occur between exchange members, the price of buying and selling bitcoin between exchanges can vary. Investors can monitor it at any time on the internet to find out where the price of bitcoin is most competitive. The following is the sequence of the process of opening a new account for cryptocurrency investments and transactions:
- Open an account on a Bitcoin Exchange, or Bitcoin exchange.
- Get KYC verification
- Make a deposit (Rupiah & Crypto)
- Choosing a crypto asset pair
- Start order
- Next to make a buying and selling transaction
- Pay fees based on the transaction amount
- Transfer crypto assets to a wallet that is where crypto assets are store.
- Choose the trading feature for those who want to focus on trading cryptocurrencies.
All processes are carrie out online without having to include personal data such as ID card numbers or cellphone numbers. If you don’t want to use a bank account to withdraw assets, you can transfer assets to PayPal accounts or digital wallets such as OVO and Go-Pay.
Types of Crypto Investments
For those who only know that crypto investment is only bitcoin, don’t get me wrong. Here are some other types of crypto investments that can be trie:
Bitcoin was the first type of cryptocurrency that is still very popular today. This type of cryptocurrency first appeare and was introduce in 2009 by a party name Satoshi Nakamoto. No one knows whether it is the name of a person, group, or company and no one knows also where they came from.
As of November 2019, there are more than 18 million bitcoins that have been trade with a total market value of around US$146 billion, as investopedia wrote. To date, about 68% of cryptocurrencies are bitcoin.
Litecoin is a type of cryptocurrency that was also present at the beginning of digital currencies began to attract the attention of many people.
This type of cryptocurrency was precisely present in 2011 as a peer-to-peer (P2P) digital currency that generates new blocks (which form the blockchain) at a faster speed. So one of the advantages of Litecoin is that it allows users to make transactions faster without the need for a powerful computing system.
Dogecoin appeared in December 2013. As the name implies, dogecoin is a cryptocurrency that makes the Shiba Inu dog its mascot. Dogecoin has a much lower value than bitcoin. The use of this type of cryptocurrency is usually used for small transactions, donations, and tipping.
BitcoinCash was launche in August 2017 and has now manage to become the top five cryptocurrencies. This type was launche due to a group of Bitcoin users who disagree with some of the rules.
They then broke away and create their own digital currency calle BitcoinCash. The group also did some improvisations that it said were better than the first cryptocurrency, bitcoin.
Feathercoin is a type of cryptocurrency that is open source. This type of cryptocurrency was create by Peter Bushnell, an IT officer at Brasenose College, Ofxord Univesity in April 2013. Feathercoin also bears a resemblance to Litecoin and is under the MIT/X11 license.
Advantages of Investing in Cryptocurrencies
Here are the benefits that can be obtaine from investing in cryptocurrencies:
· High Return
Cryptocurrency investment is one type of investment that is known to provide high returns or high returns in addition to stocks. The price of cryptocurrencies like bitcoin can increase quite drastically.
In just a matter of months, the value can break through the new all-time high. The price of bitcoin once rose by 354% in 2020 which made it able to beat the returns of other financial assets. With the right strategy, you can buy currencies cheaply but can sell them at an expensive price like stocks.
The whole world can use cryptocurrencies. Therefore, cryptocurrencies are considere universal because there is no requirement whatsoever to be its user even the user does not have to use the real name and include any personal data.
· Fast and Easy
Transactions with cryptocurrencies are somewhat faster when compared to transactions in banks. For example, international interbank transfers can usually take up to more than one day. Meanwhile, trading bitcoin only takes about a few minutes to an hour.
Every cryptocurrency user can see all the transactions that have been make. However, of course, users will still not be able to find out who the transaction was carrie out by because it was only in the form of an unidentifie number.
· Can Be Use as a Payment Tool in Many e-Commerce
Now bitcoin cryptocurrency can be use as a means of payment in some digital transactions, although not many. PayPal, which is also the largest online transaction payment tool in the world, already accepts payments with Bitcoin.
Users can PayPal store and make transactions with Bitcoin in PayPal. It can be use as a means of payment for buying and selling online for several international / foreign e-commerce such as e-Bay and Amazon.
· Safe and Legitimate
Crypto investment has received legal certainty regarding the allowability of Bitcoin trading in Indonesia to make investing in this crypto asset safer in a regulatory manner.
Crypto Investment Risks
No investment does not have risks, here are some of the risks of investing in cryptocurrencies that should be known before deciding to buy cryptocurrency:
1. Highly Volatile
The phenomenon of rising and falling exchange rates from cryptocurrencies can happen so quickly and can sometimes be quite extreme. The value can be very high, but afterwards it can degenerate sharply. Similar to stock investing, cryptocurrency investments have the characteristics of High Risk High Return.
2. Prone to Cybercrime
Cryptocurrencies themselves are technology-base, therefore this investment is very vulnerable to cyberattacks. If it happens, you will find it difficult to get it if your crypto is lost or stolen.
There have been many reports that say that many buyers have lost their investments as a result of being hacke. If you want to find more, try to check the intener of exchange break-in cases in various countries, especially in 2019.
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3. Lack of Regulation
Regulations regarding cryptocurrencies are still quite new in Indonesia. Although this regulation provides the legality of this investment to be solid in Indonesia, there are also a number of provisions that can pose risks to customers.
Thus the review of How to Wisely Invest in Cryptocurrencies. You can take a look at the information above correctly before you start this type of Crypto investment so that when you invest it can be correct and precise. Hopefully, this review can be useful for you.