The decentralized digital currencies stored in the blockchain system have taken the world by storm. The dramatic rise of cryptocurrencies saw their market cap reach $2.977 trillion in early November 2021, ensuring they grab 8th place in the world economy by gross domestic product.
There are risks to investing in the crypto market, like volatility and regulation uncertainty (legal in 104 countries but banned in 40). Still, one of the main risks currently is cryptocurrency-related crimes. According to these crypto statistics released last year by the Federal Trade Commission, the median loss for 7,000 investors by theft or fraud was an average of $1,900. Their losses were more than $80 million, mainly of investment scams. Guarantees and promises of huge returns are a scam sign, and investors should read about how bogus websites work, the FTC urges.
Investing in Cryptocurrencies
MarsTech is a comprehensive and diversified blockchain technology services group that relies on blockchain technology to create innovative digital currency products and services. They integrate their resources to build connections with all players in the industry. The company has several successful ventures, including its DeFi platform MarsDao, their Mars Learning Academy, and the MarsVC venture capital platform. MarsTech has participated in all phases of blockchain technology, including NFTs and the metaverse. It aims to promote the development and adoption of blockchain technology globally.
Investing in cryptocurrencies may appear like a labyrinth, but the blockchain technology design ensures a safer decentralized way to make these monetary transactions. Whether you want to use cryptocurrencies to buy and sell goods or just as an investment, this is how MarsTech says you should start investing in them.
Understand Before Investing
Whatever you invest your money in, it is essential to understand its pros and cons. There are thousands of cryptos you can invest in, and they all work differently. Read up on them and analyze their performance before deciding which ones you like. Profits in most cryptos are heavily reliant on the market, and they don’t work like company stocks.
The management of cryptocurrencies also differs. Bitcoin generates new units by mining on its own blockchain. Many digital currencies, Bitcoin included, have a limited supply, creating demand and increasing value. Some altcoins have a different process of producing and validating blocks of transactions. Ether is the cryptocurrency of the Ethereum network, and it uses decentralized applications to automatically enforcing clauses. These are known as “dapps.”
Some of the most popular cryptos currently include Bitcoin, Ethereum, Cardano, XRP, and Dogecoin. MarsTech is a strong supporter of Ethereum, having bought 1000 at $7 each.
Expect Volatility
Cryptocurrencies are very volatile assets. Their prices increase and drop sharply, and investors can see huge variations within seconds, depending on the news or rumor going around. Seasoned crypto investors know the fundamentals that allow them to execute trades during these sudden movements. As a new investor, this volatility can prove scary and requires strong nerves, so practice the waiting game to avoid buying high and selling low.
Look at Future Prospects
The future growth is far more crucial than past performance when considering which cryptocurrency to invest. Some, like Bitcoin, have seen meteoric rises, but as an investor, you need to consider the prospects ahead.
Learn to Analyze Metrics
Valuation metrics in cryptocurrencies vary slightly from traditional investment ones. These require coupling them together to offer a good picture rather than looking at them in isolation. These crypto valuation metrics include market capitalization, trading volume, hash rate (used to evaluate the blockchain network strength), active address activity, and transaction fees (to assess stability and security).
Practice Risk Management
Only invest money you don’t need should be invested in stocks, ETFs, digital currencies, and other asset types. Depending on the term of an investment, risk management is vital. Volatile assets traded on a short-term basis require more risk management than long-term investing. Long-term investors stick with a position without selling as the price increases.
As a short-term trader, risk management requires a strict set of rules to follow on buying and selling prices. MarsTech suggests that new traders keep a small reserve of their trading money aside to accommodate further trading if their position moves against them.
Selling at a loss does come at a cost, but practicing risk management in cryptocurrency trades is essential, especially as a newcomer.
Getting Started
Since discovering the world of Bitcoin and blockchain in 2014, the team at MarsTech has made some significant moves. Through their venture capital division, MarsVC, in the last year alone, they invested in over 100 projects. Once someone understands the fundamentals, registering with a broker and getting started is the next step to acquiring digital currencies.
2022-03-08 15:06:36