For some people, investing in cryptocurrency in 2024 seems like a viable way to skyrocket their net worth. Others have a mistrust of cryptocurrencies due to frequent cases of fraud and partly a lack of information about investing in cryptocurrencies. If you are only familiar with traditional investments offered in Chase or Bank of America and want to add Bitcoin or any other cryptocurrency to your portfolio, this guide about investing in cryptocurrency for beginners is for you.
How Beginners Can Start Investing In Cryptocurrencies
Cryptocurrency is a digital means of making payments. It has no material embodiment. That is, it is not represented by coins, banknotes, promissory notes, or anything else. This is a computer code that was obtained as a result of calculations.
The best place to start investing in cryptocurrency is to educate yourself. In the wake of popularity and successful examples of enrichment, there is always a desire to quickly jump into a new crypto project in order to quickly enjoy the benefits. However, the crypto market requires a thorough approach. We recommend starting not with an initial deposit, but with immersion in the world of cryptocurrency. Explore:
- types of cryptocurrency wallets, methods of replenishing them, and basic security rules;
- the blockchain principle that underlies famous coins;
- difference between coin and token;
- find stock charts of quotes for different currencies;
- get acquainted with the algorithms of crypto exchanges;
- subscribe to news channels and industry publications that are dedicated to the crypto topic;
- it might make sense to take an educational intensive course in one of the face-to-face or online projects.
Explore the most traded cryptocurrencies. At this stage, it will be useful to know that there are four types of currencies common in the crypto world:
- Bitcoin “forks” are those that work on the basis of the first cryptocurrency, Bitcoin.
- Alcoins - they develop according to a different algorithm.
- Stablecoins are tied to real economic assets: currencies, and gold.
- A token is a record of value on the blockchain that can also be bought and sold.
Types of Investing In Cryptocurrencies
When cryptocurrencies first appeared, business enthusiasts turned to mining (this is the process of mining cryptocurrency by calculating the very code that underlies this means of payment). But within a couple of years, it became clear that the winner in the race of miners would be the one who would buy the coolest computers and get cheap access to electricity. That is, the average person has nothing to do in this market in 2024.
As the mining landscape shifted, investors sought alternative opportunities within the crypto space. The price of meme coins, like the dogs token, emerged as a new focal point, attracting both seasoned and novice investors alike. In 2024, tracking the memecoins prices like for example dogs token offered a simpler, more accessible entry point into the volatile cryptocurrency market.
Therefore, you can make money from investments.
Spot Trading
Profitability: high, depends on the skills and knowledge of the trader.
Risks: high, due to high market volatility and the possibility of losing funds.
There are few differences from traditional exchanges. Only instead of buying shares, you have to buy and sell cryptocurrency, playing on the difference in rates.
HODLing
Profitability: potentially high in the expected future.
Risks: moderate, but patience is required.
This method involves buying coins or tokens and holding them in your account until they increase in value. This may take more than one year. Although events in the crypto world often develop more rapidly.
Lending
Profitability: varied - depends on rates.
Risks: medium, associated with possible vulnerabilities of smart contracts.
This is lending to exchanges. Exchanges also need working capital to function, so they invite users to give them money and then return it with interest. The advantage is that exchanges accept not only cryptocurrency but also regular funds.
Staking
Profitability: from 5% to 20% and above, depending on the project.
Risks: Moderate, but requires technical understanding and reliable network connections.
It can be compared to a bank deposit. The funds that the project uses for its needs are frozen in your crypto wallet. At the same time, the funds cannot be stolen; technically, they still remain yours. For those seeking a hassle-free way to earn returns while ensuring the safety of their funds, Molecula is your go-to solution—offering a smarter alternative to the uncertainties of HODLing, the complexities of lending, and the restrictions of staking.
Participation In ICO, IEO and IDO
Return: potentially high, but with increased risk.
Risks: high, due to the inability to verify the reliability and success of the project.
These are three types of participation in a startup. That is, the authors of the idea are collecting funds from investors for the launch. These abbreviations differ from each other in the order in which they enter the stock exchange. ICO is considered an outdated format due to the abundance of opportunities for fraud. IEO and IDO protect investors more, since the algorithms provide for independent analytics of the project, for example, from exchanges.
Cloud Mining
Profitability: average, depends on the complexity of the network and the cost of electricity in the world.
Risks: medium, associated with accidents and fluctuations in cryptocurrency prices.
As we have already said, opening your own crypto farm for currency mining in 2024 is very expensive. But someone has to do this. Miners offer to rent out part of their capacity to you in exchange for investment. Simply put, you give them money for development, and in exchange, part of the mined currency is credited to your account.
Top 3 Cryptocurrencies to Invest In 2024
These three cryptocurrencies are the most in demand on the market and over the years of existence have already gained substantial capitalization.
- Bitcoin (BTC)
The first successful cryptocurrency, which is associated with the rapid development of the industry. The largest cryptocurrency by market capitalization, the most expensive, and therefore in demand.
2. Ethereum (ETH)
The second most popular cryptocurrency by market capitalization. A popular staking tool.
3. Binance Coin (BNB)
Cryptocurrency of the industry's largest exchange Binance. Confidently holds the top positions in the top market capitalization. With its help, you can trade on the exchange, pay commissions for trading operations, pay in online stores (which have enabled such a function), or provide liquidity in Binance Liquid Swap (it can also be compared to an analog of a deposit).
Conclusion
Investing in cryptocurrency definitely requires preparation and knowledge, including choosing a promising currency, deciding on the method of investment, and finding solutions that will help you invest (crypto exchanges or payment systems like PayPal or Revolut). You can learn more about investing in cryptocurrencies on the Rates website, which is accessible to users from all over the world - from Los Angeles to Tokyo.