If you are intrigued by cryptocurrency markets because of recent movements or you want to diversify your portfolio, then you could be making one of the best financial decisions you’ve ever made in your life. We’re not saying that you should put all your chips on crypto, but any smart investor should at least have some level of exposure to the markets.
With that being said, investing in crypto is not like investing in other assets. Getting started is a bit more complicated, but once you go over the initial roadblocks, everything else should go smoothly. Let’s take a look at how you can start trading cryptocurrencies in 2022.
Find a Good Wallet
You have to start by looking for a safe wallet that you can use. Cryptocurrency wallets are what will authenticate transactions on the blockchain and will confirm how much cryptocurrency you hold.
There are various types of wallets out there, so you will need to get familiar with these as well. You have “cold wallets” that look like USB keys, and you have “hot wallets” that are software-based. Cold wallets are so-called because they can be disconnected from the grid. This makes them safer but less convenient.
Your best move here would be to use multiple wallets at once. You can use one or a few hard wallets to store most of your assets and keep a smaller balance on a software wallet for convenience.
Find a Good Exchange
Next, you will need to find an exchange. You can pick a P2P exchange where people transact with each other or go for a traditional exchange that is managed by an intermediary. The best choice for most people will be to go with a regular exchange. They tend to be more trustworthy and are more popular.
When picking an exchange, you have to look at where and when it was established. Regulation around exchanges isn’t as tight as in other stock exchanges, so their jurisdiction and how rigorous it is are very important. You need to look at whether the exchange has had some security breaches before and what they did to correct the situation if so. You also have to know how to store cryptocurrency and make sure that they use a good combination of soft and secured cold storage.
Another thing you should consider when picking a crypto exchange is the ease of use. Some exchanges like Cryptology allow people to switch between fiat and crypto easily, for instance, but that’s not always the case. So, check beforehand if the exchange you are thinking of allows for this.
Get Solid Information
Information is what moves all markets, but things are trickier with crypto. This is because mainstream media is largely oblivious about them or won’t prioritize them. This means that you’ll have to use alternative sources like Reddit and YouTube along with publications that are respected in crypto circles like CoinTelegraph, Coindesk, and Daily Coin, just to name a few.
This is all you need to know if you want to start trading crypto this year. We suggest that you start slow and start with a few mock trades before you jump in as crypto markets can get very unpredictable.