Bitcoin? Bitcoin Cash? Ethereum? Marscoin?
You’re likely overwhelmed with the plethora of choices when it comes to investing in cryptocurrencies.
Since there are different types of crypto, you have to understand how each one works before investing in them.
To ensure you make smart investments with cryptocurrency, you want to have set goals so you can decide which coins to buy. You want to ensure that they help build your wealth over time.
Here’s what you need to know on how to invest in cryptocurrency:
For Transactions
Increasingly, more consumers are seeing cryptocurrencies as a legitimate form of currency for everyday transactions.
For example, El Salvador became the first country to adopt Bitcoin as a legal tender. As a result, there are many shops where you can use Bitcoin to make purchases.
You want to consider buying cryptocurrencies that you can use for specific transactions. For example, there’s a new cryptocurrency that’ll get used for transactions when humans colonize Mars!
Consider having a portion of your cryptocurrency assets only for transactions.
You can consider setting aside at least 10% of each coin solely for making purchases. If possible, you should ask your employer/clients to pay your wages partially in cryptocurrency.
For Preserving Wealth
The next step is to look at the types of crypto that work best for preserving your wealth.
For this, you want to look at cryptocurrencies that have a finite amount of coins. Bitcoin, Bitcoin Cash, and Ether are the most popular examples of such cryptocurrencies.
These types of crypto retain their purchasing power. As a result, they serve as a hedge against inflation. If you’re worried that your fiat currency is losing its value then you can save your money using crypto.
You want to think of these types of crypto as a digital version of precious metals.
Traditional investors will buy gold and silver to store their wealth. For the digital age, you can use certain types of crypto to preserve your wealth.
Stablecoins
The final type of crypto to look at is stable coins. These are coins that are tied to fiat currencies.
For example, Tether and Terra are both tied to USD. This means that 1 Tether is equal to 1 USD. If you don’t have quick access to cash you can use a stable coin as an alternative.
You can also use stablecoins to own stronger fiat currencies. You can buy stable coins that are tied to a more stable fiat currency than your native currency.
Those Are the Types of Crypto
Now you know the different types of crypto to consider for your investments.
If you want to make smart investments, you want to consider owning cryptocurrencies for different purposes. You can buy cryptocurrencies for making transactions.
Another option is to use cryptocurrency to preserve and build your wealth. These cryptocurrencies will get used to hedge against inflation and save your money.
The final option is to buy stablecoins to use as a means to acquire stronger fiat currencies.
You can find more info on how to buy crypto on our website!
