When it comes to making money from cryptocurrency, the first thing that comes to mind is cryptocurrency trading. However, this activity is not for everyone, as it involves constant monitoring of the market and quick reaction. This is why many people prefer to invest in cryptocurrencies and generate passive income. In this article we will discuss Where to invest in cryptocurrency.
where do I start?
There are a lot of cryptocurrency investment options. Cryptocurrency exchanges are probably the most popular place to do this.
First, the journeys of most cryptocurrency investors begin when they buy cryptocurrency on an exchange. It can be a well-established asset or an innovative cryptocurrency. And secondly, modern exchanges offer tools for passive income and are considered suitable platforms for investing in cryptocurrencies.
At the same time, it should be borne in mind that each exchange has its advantages and disadvantages, so it is important to decide on an investment strategy and choose the right platform even in times of economic uncertainty.
What should you pay attention to when choosing an exchange?
There are two types of cryptocurrency exchanges:
- Centralized Exchange (CEX) is an online platform that provides services for buying, selling, storing and exchanging cryptocurrencies. Such an exchange acts as a repository of assets and a middleman between the two parties. CEXs usually have one center responsible for managing and ensuring the operation of the exchange.
- A decentralized exchange (DEX) is a fully automated service based on blockchain (distributed ledger) technology that uses smart contracts. User verification is not required. The primary difference between CEX and DEX is that DEXs do not store assets and do not have access to user transactions. An example of such an exchange is WhiteSwap, where users can become liquidity providers and earn depending on their stake in the pool.
However, CEXs are an easier solution for beginners, as they have a simpler mechanism and interface, and a wider set of tools.
Consider a number of key factors to consider when choosing a cryptocurrency exchange:
- It is necessary to analyze the cyber security measures taken by the platform. Examine the history of the exchange in relation to failures, leaks, hacks and their consequences;
- High liquidity is the most important factor responsible for the exchange’s ability to ensure the smooth purchase and sale of digital assets by users. It is best to use special services to assess trading volumes on the exchange, as well as user activity;
- Number of supported currencies and trading pairs. The number of cryptocurrencies is constantly growing and investors need to have access to as many of them as possible;
- Wide range of tools. The best cryptocurrency exchanges are able to meet the needs of users and offer a variety of tools for both trading and long-term investments.
Let’s review WhiteBIT, one of the largest Central European cryptocurrency exchanges from Ukraine, founded in 2018. Trading fees on WhiteBIT are very low. The high level of liquidity on the exchange allows users to quickly make a deal at any time. The exchange also has its own token, the WhiteBIT (WBT) token.
At the same time, you can not only buy and store crypto on WhiteBIT, but also earn up to 30% passive income. WhiteBIT’s Cryptodeposit allows users to earn in this way.
Cryptodeposit is implemented in the form of loaning the user’s assets to the exchange with interest from 0.4% to 30%. This tool is great for both short and long term investment.
The high level of crypto security is confirmed by Hacken.io and CER live audits, according to which WhiteBIT ranks in the top three most reliable exchanges with the highest AAA rating.
But do not forget about the general safety rules when investing in cryptocurrencies:
- Diversify your portfolio. Don’t invest in just one asset. Diversification will allow you to reduce risks. Keep in mind that cryptocurrency is a volatile market and anything can happen.
- Study cryptocurrency. Before investing in cryptocurrencies, you should carefully study their characteristics, features, experience and reputation of developers, capitalization indicators, trading volume, etc.
- Invest only what you can afford to lose. Base your decisions on your financial ability. Never invest money that you cannot afford to lose.
Which cryptocurrency would you choose?
There are more than 10,000 digital assets based on blockchain technology. Although most beginners have only heard of Bitcoin, there are a lot of great cryptocurrencies out there. When choosing assets to invest in, pay attention to Ethereum, the second most popular cryptocurrency in the world. Some people prefer to invest in the assets of one of the largest exchanges in the world, Binance, which is called Binance Coin (BNB). And there are, of course, those who know that such hidden gems as Cardano can be key to success.
The final decision is yours, but practice shows that cryptocurrency as an investment is popular with both owners of traditional investments and those who have not invested in anything before. However, no investment is 100% safe and you should do your own research before making any decisions related to cryptocurrency.