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How to Invest in Cryptocurrencies in 2022

Can you guess the most trending financial resolution people are setting this 2022? Crypto investing of course! In the last few years, the growing world of crypto has garnered the attention of the media and the general public. However, there is a lot to learn before investing your money in these alternative currencies.

If you want to buy crypto but don’t know where to begin, you’ve come to the right place! With this practical guide, you will be able to open the necessary accounts to get started and store your digital assets safely. This article also includes important facts about Bitcoin and other popular cryptocurrencies for 2022. With this information, you’ll be able to identify the best investment opportunities, safeguard your digital assets, and learn about new investment vehicles.

What Do You Need to Invest in Cryptocurrencies?

Before buying your first digital coin, it’s important to remember that these are high-risk, volatile investments. This graph reflects Bitcoin’s historical prices and is a good example of the fluctuations that are typical of this cryptocurrency. When deciding how much money to put into crypto, you should take these highs and lows into account and only invest amounts that you can afford to lose.

Regardless of the type of crypto that you want to buy, it’s important to purchase your coins using the correct process. This helps increase the safety of your investments. Remember that when you’re buying a decentralized currency, you are responsible for the safety of your own investment.

Before putting money into crypto, it’s a good idea to take some time to become familiar with their legal framework and learn how cryptocurrencies work. This is an essential part of the process, considering that digital currencies are very different from traditional investments and banking systems.

The first thing you’ll need to buy virtual currencies is an account in a crypto exchange or brokerage to process your purchase. Understanding the difference between these two types of platforms is key to opening the right type of account for yourself.

Crypto exchanges are digital marketplaces where users can trade cryptocurrencies directly with each other. Some of the most popular exchanges to invest in crypto in 2022 are:

Once you’ve created an exchange account, the next step is to open a wallet where you’ll store your cryptocurrency. There are several types of wallets with different levels of security and access. Your most convenient storage method will depend on how often you expect to buy and sell your crypto.

A broker also works as an intermediary in crypto transactions. However, when you choose to use a brokerage the platform determines the price of your coins. In some cases, brokers limit the number of transfers that you can make outside of the platform. They also offer their own digital wallets for storage.  

Which Are the Most Profitable Cryptocurrencies with the Greatest Expected Growth?

Overall, the cryptocurrency market has seen much growth in recent years. CoinMarketCap, the most popular crypto tracking website in the world, features a list of over 1,500 digital currencies. However, not all of these coins are a good investment.

With so many options, many beginners feel overwhelmed as they try to decide on a cryptocurrency to invest in. A good place to start exploring your best options is by researching expert opinions and analyzing the performance of different currencies during previous periods.

Which Were the Best Cryptocurrency Investments in 2021?

Using CoinMarketCap’s historical data, Infotechnology published their own list of popular cryptocurrencies that enjoyed the greatest amount of growth during 2021:

CRYPTOCURRENCY

PERCENT GAIN IN 2021

Shiba Inu

370,000%

Matic

13,000%

Solana

10,000%

Luna

10,000%

Dogecoin

3,000%

Binance Coin

1,400%

Cardano

670%

Ether

502%

Polkadot

233%

Bitcoin

78%

Where to Invest in Cryptocurrencies in 2022

To help their readers learn more about the cryptocurrency market in 2022, Business Insider interviewed several experts on the subject. Based on 2021 performance and market cap value, these specialists highlighted the following coins as some of the best digital assets for 2022:

  • Bitcoin (BTC)
  • Ethereum (ETH)
  • Solana (SOL)
  • Helium (HNT)
  • The Graph (GRT)
  • Binance Coin (BNB)
  • Luna (LUNA)
  • XRP (XRP)

How to Invest in Cryptocurrency Safely

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Cryptocurrency investments carry several inherent risks. From market instability to the possibility of fraud, you must take certain safety measures before investing in crypto.

If you want to invest in cryptocurrency, remember to review these recommendations from the Federal Trade Commission (FTC) before making any investment decisions. The following questions can also help you decide which is the most appropriate crypto investment for you:

  • What use cases does the coin have?
  • What is its total market cap value?
  • What do its historical prices look like?
  • What is the coin’s circulating supply?

Some of the best suggestions to protect your crypto and avoid getting your keys stolen include:

  • Installing an antivirus in your computer
  • Verifying the security of your internet connection
  • Saving handwritten reminders of your public and private keys in a safe
  • Backing up your data
  • Using an exclusive email account for your crypto transactions
  • Setting up double authentication for all of your accounts
  • Storing your digital assets among multiple systems
  • Protecting the security of your cell phone

Legal Requirements

Every crypto exchange or digital wallet has its own set of legal requirements. Some of the platforms that maintain user anonymity and don’t require identity verification include:

Other platforms use an identification process known as Know Your Client (KYC). With this method, exchanges and brokers verify your identity and monitor transactions to avoid money laundering.

Each platform’s authentication process works differently. Some verification systems take minutes, while others require days. In general KYC system requirements include:

  • A photo ID (could be a passport, driver’s license, or state ID)
  • Date of birth
  • Social security number (SSN)
  • Home address

How to Invest in Bitcoin?

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As the most established cryptocurrency in the world, Bitcoin is even an official currency in countries such as El Salvador. This is why many investors choose Bitcoin as a starting place to purchase digital assets.

The first step to investing in Bitcoin is to open an account in a cryptocurrency exchange. Once you’ve established the account, you’ll need to connect it to your preferred payment method. 

Each exchange has its own rules about acceptable payment methods. Most of them accept U.S. dollar payments through credit or debit cards, such as your PODERcard. However, there are some crypto exchanges that only accept other digital currencies.

Once you’ve connected your payment system, you’ll be ready to make your first Bitcoin purchase. Just decide how many coins or fractions of coins you want to buy and place the order.

After completing your transaction, you’ll need to decide which crypto wallet you’ll use to store your currency’s private keys. For maximum security, remember to protect your keys and use double authentication systems.

What are bitcoins?

Created in 2008 by a person or a group of people under the pseudonym Satoshi Nakamoto, Bitcoin is the best-known digital currency in the world.

Its popularity is due to the decentralized verification system that the currency uses. This network is called blockchain. With the blockchain, all bitcoin users confirm transactions and maintain the anonymity of the other users. Since there is a very limited amount of Bitcoin, the value of this cryptocurrency relies on its supply and demand.

Nowadays, there are other alternative coins that compete with Bitcoin. Each of these coins operates within its own network, with its own blockchain.

How to buy Bitcoin in the U.S.

Every country has its own regulations to buy and sell cryptocurrency. In the United States, people are legally allowed to operate using virtual currencies. However, the Office of the Comptroller of the Currency (OCC) recently released a joint statement with the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation (FDIC). In this document, the agencies included crypto as one of their supervisory priorities for 2022. 

In its 2022 Bank Supervision Operating Plan, the OCC also announced that it will require financial institutions to request permission to custody crypto. The new supervision systems will also pay more attention to capital and liquidity standards of cryptocurrencies, as well as the rules for KYC verification systems.

Is there a minimum to invest in cryptocurrencies?

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There is no minimum to invest in cryptocurrencies. Some exchanges, like Binance, have a minimum transaction amount of $10. Other platforms, such as Coinbase, offer an even lower minimum of $2.

Aside from the cost of your investment, exchanges also charge fees per transaction. Normally all transactions including purchases, sales, and transfers include some type of fee.

What Should I Take into Account?

When investing in Bitcoin or other cryptocurrencies, you should take several factors into account. Some of these are:

  • The volatility of these investments
  • Your own risk tolerance
  • Your financial goals
  • The amount of time that you wish to hold on to crypto coins

To diversify your portfolio and gain exposure to digital currencies without buying crypto coins, you can consider alternatives such as:

  • Exchange Traded Funds (ETFs)
  • Contracts for DIfferences (CFDs)
  • Futures
  • Non-Fungible Tokens (NFTs)

Advantages of investing in virtual currencies

According to some investors, crypto offers unique advantages and a real alternative to traditional currencies. These are some of the benefits they point out:

  • Decentralization: Because they’re not associated with any government or financial institution, cryptocurrencies are international assets that offer users independence from the traditional system.
  • Anonymity: Blockchain transactions are anonymous and verified in a confidential manner.
  • Speed: Since they take place on the network, the verification process is more efficient than with traditional banking transactions.
  • Avoid inflation: Each cryptocurrency network has its own system to prevent inflation. With a predetermined number of coins, it’s impossible to inundate the market. This ensures that the coin’s value won’t become diluted.

Risks of investing in virtual coins

Just as there are benefits, there are also disadvantages to operating in virtual currencies. Before investing in crypto, it’s important to understand these possible inconveniences:

  • Instability: Cryptocurrencies are high-risk investments whose value fluctuates more than traditional assets. This puts investors at risk of large losses in a matter of minutes.
  • Little regulation: Because it’s such a new investment method, there are still many inconsistencies within cryptocurrencies, exchanges, and brokerages.
  • Lack of protection: Cryptocurrencies are not associated with any government or company. This means that your investments don’t have the same protections that exist when you operate with financial institutions or traditional investment vehicles.
  • Exposure to fraud: Cryptocurrency payments are irreversible. This means that if you fall victim to fraud or someone steals your private keys, you could lose all of your capital and there is no way to recover it.

Before investing in any cryptocurrency, take the time to research the options available. You should also look into the storage methods that are most convenient for your needs. To protect your investment, it’s important to take safety measures and diversify your portfolio.

Just as with other risky investments, cryptocurrencies are inherently volatile. Stay cautious and avoid investing more than you can afford to lose. Remember that the first step to generate earnings and achieve financial success is to educate yourself. At SABEResPODER, our goal is to keep you informed of the trends in the world of crypto. Keep visiting our website for up-to-date information and more educational articles.