In this article, you will discover how to invest in cryptocurrencies as a minor.
Crypto investments have taken a whole new turn in 2023 compared to previous years. While the first few years after the blockchain innovation market a reluctance by the general public to buy into the seeming utopic promises of a decentralised global payment system, more people are gravitating towards crypto in modern times.
Having seen the price of Bitcoin rise exponentially over the years, it’s no surprise that the market cap of crypto and worldwide trading volumes continue to top the trillion dollars, with the market predicted to grow even further in coming years.
Cryptocurrency investing is one of the most popular forms of investment today. With several billion dollars spread out across multiple altcoins, stablecoins, DAOs, and Defi apps, it’s safe to say that the blockchain industry is the fastest growing in the tech niche.
Of course, this boom has not come without its own peculiarities and death traps. There has been several thousand dollars worth of tokens lost to scams, misplaced private keys, and bearish markets for every Bitcoin mined.
How To Invest in Cryptocurrencies As a Minor
This article will explain what crypto investments are and the underlying technologies of crypto.
1. Blockchain 101
Many investors don’t bother to find out certain basics about blockchain technology before throwing in their lot with Bitcoin and altcoins.
When things go awry, they are confused and often make worse decisions in a bid to stem the impacts of a downward market trend. To avoid such scenarios, it’s best to go into crypto investing with clear eyes and a good knowledge of the underpinning technologies.
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This will help you make good decisions in the future, formulate good investment strategies, and even weather the worst storms. As a serious crypto investor, the first question you should ask is this:
What is the Blockchain?
As the name implies, the blockchain is a linked chain of consensual and decentralised transactions and a near-fool proof validation method. In other words, it’s a distributed ledger of financial records that’s visible to everyone within the network.
Each transaction is verified transparently, with the tokens being cryptocurrencies themselves. The original cryptocurrency, Bitcoin, had no utilities beyond being a store of financial value. However, in recent years, the utility of tokens has been upped a notch.
Now, tokens are more useful than ever. They function as transferable assets in various financial ecosystems within the blockchain ecosystem. Now you can purchase virtual assets, take loans and do futures trading on different exchange platforms.
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In fact, it is the digital, decentralised ecosystem that has evolved around cryptocurrencies that is the reason behind their recent value surge.
Today, there is Bitcoin and several hundred altcoins on the market, each offering unique opportunities and prospects. As a crypto investor, you should adhere to certain rules regarding investment. It’s not a rushed task. Neither is it a hurried venture.
Being a successful investor in cryptocurrency is a slow, steady game. The millionaires in crypto today made their fortunes by betting against the odds at a time when cryptocurrency was worth next to nothing. Today, they can reap the reward of their investments.
Today’s investors must show similar discretion and patience in investing their hard-earned funds into crypto. As a driven investor, here are some guides to investing correctly and profitably in 2023.
2. Join Discord
If Instagram is the social media for branding, content creators, celebrities, and everyone in the show business, Discord is the equivalent platform for crypto investors.
Speculation, predictions, and crypto-related discussions are important market news and information for investors.
Discord servers play host to many cryptos and NFT communities. The hype begins on Discord when new projects start, even before it filters out through other channels and becomes public knowledge.
Long before potentially profitable crypto projects became mainstream and organized IPOs, they are discussed and speculated on in various Discord groups and channels. The failure or success of a crypto project relies, to a large extent, on its foundations.
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On Discord, you can expect to be afforded more than a glimpse of the intricate dynamics in technological innovation that will distinguish the standout prospects from the scam coins.
3. Purchase a Hardware Wallet
No serious investor would store their tokens on a crypto exchange platform. A crypto wallet is akin to a bank account, with the accompanying private keys combining to provide users with a virtually unassailable firewall.
No matter how sound your investment strategies are, racking up profits daily as you do. If your assets are not securely stored, you risk losing everything in an unfortunately-timed heist.
Although some crypto exchange platforms like Coinbase have the distinguishment of never suffering a widespread hack, it’s never advisable to store your digital investments over an exchange.
Some software wallets are a great, convenient, easy-to-use option, nothing beats the security of a hardware wallet. Although they’re a bit on the pricey side, hardware wallets provide you with maximum security, so you don’t have to worry about being hacked.
After all, how would the malicious hackers penetrate the firewalls of a device that works offline?
4. Beware of Scam Coins
There are hundreds of coins on the market today. The ones you see on the crypto exchanges are only a tiny fraction of the total. But, as more exchange platforms spring up in future, you can expect the addition of more coins to the public markets.
However, access to a broader range of tokens isn’t necessarily a cause for excitement. For every Solana and Ethereum out there, there are several subtle scam coins or redundant tokens whose values will never rise.
Don’t invest based on idle speculation!
5. Consider Defi Apps
Although the first quarter of 2022 has not been kind to cryptocurrency. Even Bitcoin, the revered industry pioneer, has failed to go unscathed. In less than a year, it has experienced a value dip of almost one hundred percent.
For many crypto investors, the saving grace has been Defi apps and DAOs. The blockchain is a vast multiverse with innovations being implemented every day.
Defi App and the several financial investment products they offer are a breath of fresh air in an otherwise saturated industry.
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6. Create an Account with a Broker
While most of the formerly discussed tips relate to when you start the actual investment, this suggestion applies at the start of your investment journey.
Choosing the right crypto exchange platform is not something to be taken lightly. Whether you’re using Coinbase, KuCoin, or Binance, it stands to reason that you have a basic grasp of the fee structure.
Depending on the coin you’re trading, you may have to pay various fees, each of which has a subtle but ultimately determinant effect on the state of your portfolio at the end of the day.
Key Crypto Investment Considerations
What determines a bearish or bullish market is demand or supply laws. When the supply of a token diminishes, its value soars. Simultaneously, when a token’s supply is abundant, its value drops.
As you consider and speculate on the rise and fall of token values, it’s important to answer the “how” question regarding demand and supply. A good way to discover the potential of a token is to read its whitepaper.
However, without a basic understanding of blockchain technology, you’ll struggle with a lot of technical jargon.
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Conclusion: How To Invest in Cryptocurrencies
It’s also important to check your investment returns and visit platforms like CoinStats to gain helpful insight on coins like live updates, relevant articles, and investment advice.
Investing isn’t a short-term thing. Serious investors should be ready to take some losses before making their big breaks.
In addition, it’s important to conduct as much research into a coin’s origins as you can. When a project goes public, it’s easy to be led astray by idle speculation and impulsive predictions.
However, you should keep yourself grounded in the basics and specifics of blockchain technologies as they continue to involve.
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