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If you’re new to the crypto world, it can seem confusing to navigate and difficult to predict. However, today, there are more opportunities to invest in blockchain projects than ever before. To succeed in crypto, consider these few things before making your initial investment.
Check the Whitepaper
Each new crypto token is designed with specific regulations, rules, incentives, and benefits for its users. As a new investor, you can check out the whitepaper of each token you’re considering to learn about the motivations and goals behind creating that particular token. Some cryptos are designed with long-term social impact goals in mind. Others are built to solve specific problems in the digital crypto-economy or improve certain crypto trade aspects. All crypto tokens have a whitepaper that can offer insight into the long-term goals and sustainability of that particular token and its blockchain.
Select the Right Exchange
The exchange you select is essential and will impact your trades and exchanges. Some exchanges are centralized and act as intermediaries between traders, collecting fees for each transaction. Centralized exchanges are generally user-friendly and offer users a wide range of learning resources and access to the crypto marketplace. Decentralized exchanges, DEXs, on the other hand, use smart contracts to automate trade verification, so there are no third-party fees. However, DEXs are generally more challenging to navigate and don’t come with the same resources and services centralized exchanges offer. If you intend to make daily trades, a DEX could prove more beneficial for your goals. Groups like FTX are creating new exchange platforms that combine the user-friendly aspects of centralized exchanges with the freedom of DEXs.
Join an Online Community
Keeping up with the latest crypto news and blockchain projects is essential for finding new investment opportunities. An online crypto community like FTX can offer you plenty of resources and a broad knowledge base to help you start your investment journey and stay up to date on the latest crypto news. These online communities can also offer insight into how other traders think about new tokens so you can understand the popular opinion of specific projects.
Invest Long-Term
Though tracking the latest Bitcoin price USD is easy, knowing precisely when you should trade your investment for the highest returns can be difficult. Short-term crypto investing could be advantageous but requires speculation and perfect timing. This is why you should consider the long-term investment options that can generate greater returns and rewards the longer your hold your coin. Some tokens that run on a proof-of-stake blockchain network allow coin holders to act as nodes on the network that verify transactions in exchange for rewards. For other cryptos, you have the opportunity to enter a liquidity pool where your coins are locked for a certain period and are lent out to borrowers on the network in exchange for rewards. These long-term investment options can generate high returns on your investment the longer you hold your coins.
Consider NFTs
Non-fungible tokens or NFTs are another popular investment option in the crypto world. NFTs are immutable records of ownership over a specific asset. These records are encrypted and secured on blockchain networks, so they cannot be tampered with. NFTs have been utilized in the last several years to solve issues of provenance and valuation in the digital art world. By minting a digital artwork into an NFT, you create digital scarcity and offer protection over the right to ownership of that artwork. The NFT market has boomed recently as many celebrities and artists have come out to endorse the marketplace, even creating their own collections. If you’re considering other long-term investment options for your crypto, check out the NFT marketplace.
Utility
When selecting the crypto for your investment, a final thing to consider is its utility. If you’re planning on spending your crypto, there are plenty of digital and real-world assets you can purchase. Some vendors will accept cryptocurrencies; there have even been reports of people buying homes using cryptocurrency. Before making an initial investment, research and make sure you can use that coin to make the purchase you’re after, as not all vendors will accept every cryptocurrency.
These are just some of the considerations when investing in the crypto world. Always research before investing, and consider your options to determine which token will be most beneficial for your financial goals.
