Cryptocurrencies have skyrocketed in popularity over the past few years, with Bitcoin growing more popular than even gold in 2017. More and more people are asking the question: how do I build wealth with crypto? It’s a fair question, and it’s one that doesn’t have one correct answer, but there are some ways to answer it. While cryptocurrencies can be used as an investment or an asset for diversification, there are also other tools that can be used to grow your wealth even faster! Here are seven ways to build wealth with crypto. 7 Ways to Build Wealth with Crypto
1) Start Small
It’s a good idea to diversify your investment portfolio. But don’t go crazy and dump all of your money into cryptocurrencies right away; start small. A good rule of thumb is investing about 10% of what you can afford in crypto, with 90% in traditional investment vehicles like stocks and bonds. If you want more details on how to get started investing in crypto, check out our guide here .
2) Buy Bitcoin
If you’re just starting out, buy Bitcoin. It’s a good store of value and it has a limited supply, meaning its price will likely continue to rise as demand increases from investors and speculators.
3) Research the Market
There’s a lot of hype surrounding cryptocurrency and the blockchain. It can be tempting to dive in headfirst, but that could end up being a costly mistake. Taking some time to research and learn about your investment is crucial for making an informed decision. Here are some questions you should answer before investing in cryptocurrency: What does it do? Who is behind it? How does it work? How risky is it? Will I earn money from it? Is there something more secure out there?
4) Know What You’re Investing In
It’s never too early (or late) to educate yourself on how to properly invest your money. Educate yourself about taxation, proper portfolio management, and effective risk-management techniques before you decide which cryptocurrencies are right for you. We’ve put together a list of useful resources that should help get you started: Top Cryptocurrency Investing Tips – The Definitive Guide For Newbies To Get Started With Investing In Cryptocurrencies
5) Keep Track of Your Coins
The high-risk, high-reward world of cryptocurrency investing is a tempting one. However, if you don’t know where your money is going and what’s happening at any given time, you could lose it all. When investing in cryptocurrency markets or ICOs (initial coin offerings), always keep tabs on your digital assets. Use an online wallet or a mobile app such as Bitcoin Wallet for Android or Mycelium Wallet for iOS to manage transactions and holdings.
6) Be Patient and Do Your Research!
Many people think they can make a quick buck by jumping on cryptocurrency’s latest craze, but it’s important to understand that in many cases, these tokens won’t be around in a year—or even three months—from now. So if you see an ICO (initial coin offering) that promises you a fantastic return on your investment, tread carefully. Don’t put money into anything you don’t completely understand.
7) Look Forward, Not Backward
Never sell off crypto holdings for less than you paid. Buy when it’s cheap, not when it’s on fire. Don’t fall into that worst of investment traps: regret. And don’t think of crypto as a way to get rich quick; instead, see it as a system for long-term growth if you buy and hold.