As you might be well aware of if you are interested in cryptos, Bitcoin is a risky investment, so you should carefully review your risk tolerance before investing, however some are known to collect its commemorative crypto coins as a hobby rather than as a gamble which is completely harmless. Anyway, investing in Bitcoin is not a good idea if you miss the first big opportunity to invest, but investing a small amount in different types of investments and diversifying your investments can help limit risk.
If you don’t yet know how to buy bitcoin and other cryptocurrencies then this is something to look into before trying to diversify your investments, but if you have already done this read on and see how you can expand your investments and profits using crypto.
Diversification
Portfolio diversification is not only a hedging method, but should also boost your returns when you invest in new cryptocurrencies. Top currencies like Bitcoin and Ethereum are still hot investments, so make sure you include crypto coins in your investment portfolio as soon as possible, as they are the hottest investments. Before investing in cryptocurrencies, you should think twice, as they can also be traded at short notice.
Investing in companies that rely on blockchain and cryptocurrencies is the best way to address these movements. Investors can also take positions in cryptocurrencies themselves, and perhaps buy a small amount from a basket of different cryptocurrencies.
The Blockchain technology behind cryptocurrencies
A better way to engage in this sector is to invest in companies that benefit from blockchain and cryptocurrencies. A robo-adviser such as Wealthsimple or RBC Investease can look after investing in the stock market for you while you manage your cryptocurrency trading. Investors can also take positions in cryptocurrencies themselves and buy small amounts of several different cryptocurrencies. If you are in two minds about which type of brokerage/advisor to use for your investments, you can check out Questrade vs Qtrade reviews to take a look at what is available and make your decision from the information you have gathered.
Cryptocurrency exchanges are platforms that help you buy and sell digital currencies such as Bitcoins and Ethereum. These are virtual stock markets where the cryptocurrency of several companies is the only investment on offer. If you want to buy or sell Bitcoins in India, you can do so via one of the following exchanges: Bitfinex, Bitstamp, Coinbase, Mt Gox and Coinbase.
If you really believe in investing in cryptocurrencies, you should learn to hold on to your investments even when prices fall. Remember, invest in what you are willing to lose and diversify your portfolio if you plan to buy or sell a cryptocurrency. Once you understand what coin you are investing in and what it should do, you can diversify your investment. If you hold a percentage of bitcoin, you give the rest to another investment, as bitcoin almost always triggers a downward or upward trend in the market.
Re-visiting diversification
Diversification is key to a good investment strategy, and that also applies when you invest in cryptocurrencies. Whether you invest in stocks, shares, gold or ethereum, diversification should be the game. The smallest and least prioritised investments should all be part of a diversified portfolio, not just one or two.
Zcash (ZEC)
In more of a direct way to protect your digital currencies, you can make use of Fireblocks Zcash transfer, which is now fully supported. At some point your exposure to digital currencies might become so significant that you’ll need to actively take some steps to protect it, in which case you can now transfer Zcash between exchanges and counterparties securely and store it just as securely.
