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What started as a niche movement has become increasingly mainstream in recent years, and now, more people than ever are looking to capitalize on the crypto market’s explosive growth. There are lots of easy ways to get involved as an investor, but it’s still important to understand the space you’re jumping into before making any big moves—and that’s exactly what we’ll show you in this beginner’s guide to investing in crypto for 2022 . So, let’s start with the basics: what exactly is cryptocurrency? And how does one go about getting involved? Let’s find out!
Cryptocurrencies are digital currencies that use encryption techniques (cryptography) to regulate their generation and control how they are spent. The most well-known example is Bitcoin, which was released as open-source software back in 2009 by an anonymous programmer (or group of programmers) under the pseudonym Satoshi Nakamoto.
If you’re looking to invest in crypto, then first ask yourself where it comes from. The answer: all around us, and especially at cryptocurrency exchanges. While there are hundreds of cryptocurrencies out there, they can generally be broken down into two categories: (1) those that have been issued by a central bank; and (2) those that have not.
That’s what everyone wants to know, and it’s a legitimate question. Cryptocurrencies are still very young—the market cap is currently less than 5% of that of gold—so there’s plenty of room for growth.
Rich with Crypto or Poor with Cash
The price of cryptocurrencies is determined by a variety of factors. The two primary ways that prices are set is either on exchanges or over-the-counter (OTC). When it comes to exchanges, supply and demand determine how coins are priced. However, due to regulation and market structure (i.e., how much fiat currency can be traded against each coin), prices are quite different across platforms.
It’s difficult to tell. The cryptocurrency industry is so nascent that it’s impossible to predict whether cryptocurrencies will keep growing in value, just as it was difficult to predict whether internet startups would achieve what they did decades ago. However, we do know one thing: if you buy cryptocurrency and hold onto it long enough, you’ll be richly rewarded. Not many investments offer a similar upside.
Here Are the Top 10 Cryptocurrencies of 2021
As Bitcoin reaches record highs and continues its dominance of virtual currencies, many new investors are looking at other coins as a source of investment opportunities. With over 1500 digital currencies on offer, it can be difficult to find which ones offer a good return on investment. In fact, since you’re reading these words it’s likely that cryptocurrency is still quite foreign to you—but don’t worry; that’s what we’re here for.
Cryptocurrencies are not regulated like other investments, and some are more stable than others. There is also a lot of complexity in understanding what makes a cryptocurrency valuable (if it has value at all), and how much you’re willing to risk when you invest. In many ways, cryptocurrencies are very risky, but so can any investment if you don’t approach it with knowledge and careful consideration.
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