Crypto Portfolio – Where and How to Get Started
How to begin a cryptocurrency portfolio?The internet is flooded with this questions and its many vague responses. There are many open source materials as well as paid ones (yes, humongous amount of money) on cryptocurrency portfolio management but most of them don’t serve the purpose. If you are a beginner who is looking forward to having some great investment benefits from cryptocurrency, then this guide on cryptocurrency portfolio management may be helpful to you. Today, we shall discuss on how to start Crypto Portfolio
Why should you invest in cryptocurrency?To put in the most blunt manner, its value is increasing day by day. Any asset whose price is going up is a valuable one. Let us take the example of Bitcoin, probably the most popular cryptocurrency. It made many headline and many eyes pop when its value hit an all time high of $ 19,783.06 in the last month of 2017. This was almost three times its value in 2016. So, cryptocurrency is a relatively new class of assets that is defined by the following virtues.
How much should the investment be?Your cryptocurrency investment portfolio depends on your overall investment portfolio and how it fits in this broader investment portfolio.
If your are in the later stages of your career or is planning retirement soon, the investment should be viewed with caution. Such investors should invest a small allocation from their earnings that would not exceed 0.5% of their overall income.
If your younger and have recently launched your career, you would have a long way to go till retirement. You can opt for a greater slice of the investment pie and opt to invest upto 5% of your total earnings.
In Whichever category you fall, make sure you stick to the golden rule of any investment : NEVER INVEST MORE THAN YOU CAN AFFORD TO LOSE.
While investing in cryptocurrency, you need to be equipped for the volatility and declines in the value of your blockchains, at times amounting to more than 50 percent at times. The frequencies of such volatility and declines would be high in case of cryptocurrency investments.
After all this while, if you are still confused on how much to invest, we suggest you set aside around 1% of your earnings, that you would probably allocate for your riskiest investments.
How to buy cryptocurrency?You can buy cryptocurrency from any of the cryptocurrency exchanges. The most popular ones are Gemini, Coinbase, Kraken, CEX.io and Bitstamp. You should always look into the following factors while selecting a cryptocurrency exchange.
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What should you invest in and why?Before you take in the plunge and make your first investment, you should follow certain principles. Otherwise, you would just be a sheep following the herd and be gambling. You would eventually learn to develop your own set of principles while going for an investment, but you can begin with the following.
Getting done with the first tradeThere are two types of orders.
1. Market orders in which you buy or sell at the best available price.
2. Limit orders where you mention the price that you want to buy the coins or sell it , and stick to those prices.
Limit orders will ensure that you get your specified price.
1. First, you have to allocate a specific amount of money to be invested into cryptocoins. If you had already done that, calculate the amount of cryptocoins you can buy with that. ( Multiply the total balance by allocated money, and , divide the limit price).
2. Navigate to the coin market and input a limit Buy Order with the results.
3. Now, it is waiting time! Once the order is filled, cheers! You have bought your first cryptocurrency. Voila, you are done with your starter cryptocurrency portfolio.