5 Things to Consider Before Buying Crypto
A growing number of people are going crazy for crypto. These digital currencies have proven to be a great investment asset and can be used to buy all kinds of products – some of which can be bought with regular currencies. However, it’s important to understand exactly what you’re getting into before buying cryptocurrencies. This post lists 5 important things that could be worth considering beforehand.
What’s the Price?
Cryptocurrencies like Bitcoin and Ethereum are known for being very volatile. Their price can quickly rise or fall – and so it’s important to buy at the right time. Before buying a cryptocurrency, you should always look up the price and its history to see if you’re getting a good deal. You should be wary of cryptocurrencies that have been very volatile in the past or that have recently started falling in value.
Before selling crypto, it’s also important to know what kind of deal you’re getting. Use charts such as these ETHUSD charts before you convert your crypto back to dollars – when you sell is just as important as when you buy.
What Fees Will You Pay?
You’ll typically pay a transaction fee when buying a cryptocurrency. These fees can vary depending on the cryptocurrency you’re purchasing and the platform you’re using. For instance, the likes of Ethereum charges ‘gas fees’ which have been known to be relatively high in the past. Others have almost no transaction fees and have the potential to be more profitable – especially when trading small amounts.
Do your research so that you know exactly what you’re paying during the transaction and so that you can budget this cost into your return.
Which Exchange Will You Use?
Cryptocurrencies are bought through online trading platforms called exchanges. There are many different exchanges that you can use. Each one has a different level of security, a different range of cryptocurrencies to buy from and different fees – by doing your research, you can find the best suited exchange for you.
Check out his comparison guide to the best cryptocurrency platforms to help you make the right choice.
Have You Got a Wallet?
A crypto wallet is a place to securely store your cryptocurrency. This could take the form of encrypted software or hardware that can be disconnected from the internet. It’s worth arranging a crypto wallet before you buy any crypto.
You cannot store cryptocurrency in a traditional bank, however there are a few digital banks that have started to offer crypto accounts. This is another potential place to store your crypto – in some cases with the benefit of collecting interest. However, it’s important that you trust the bank.
What’s Your Goal?
When choosing which cryptocurrency to buy and how much to buy, it’s important to consider your goals. Certain cryptocurrencies may be better to buy in certain contexts.
For example, if you’re looking to use cryptocurrency to make purchases, you may want to stick to a popular option like Bitcoin and Ethereum that is more widely accepted. If you’ve looking to use cryptocurrency as an investment asset, you may want to invest in a range of cryptocurrencies to protect your investment. Some cryptocurrencies may be better for making a fast return, but could be potentially riskier.