If you have come this far, you need to invest in cryptocurrencies or at least be curious about them. In recent times it is quite likely that you have read news about the world of Bitcoin and altcoins or that a family member, friend, or acquaintance has told you about it. 

It is also quite possible that you have heard that there are people becoming millionaires mining or trading with these digital assets and it is even more likely that you have thought that all this is a geeky thing or perhaps an attempt to capture the unwary and scam them.

Well, you should know that there is only a part of the truth in both cases: there are very few people who get rich overnight with cryptocurrencies, and on the other hand, there are many who will try to trick you in order to profit at your expense. 

In between these two extremes lies a technological and financial ecosystem that, even though it has been in place for years, is still in its infancy on its unstoppable path to global adoption. 

In other words, you’re not quite there yet, but you’re far from late. In Spain, only 12 out of every 100 people have cryptocurrencies. The music has only just begun to play.

What Do I Have to Do to Invest in Cryptocurrencies?

The first thing you have to do is to create an account in an exchange. That is an exchange platform where you can convert your fiat currencies to the cryptocurrency or token you want, after paying a small commission. 

The best known worldwide are Binance and Coinbase, where you can currently use a Coinbase API trading bot to automatize your tradings. Then there are others that are betting heavily on marketing, such as Crypto.com.  

Those who are looking for what in the sector are called “gems”, i.e. new projects with a low market capitalization that have the potential to “hit the big time” with very significant price increases in relatively short periods of time, opt for KuCoin or Gate.io.  

If what you want is to opt for the pre-sale of tokens of projects in germination, Coinlist is one of the references. 

There is a multitude of exchange providers and none of them has all the cryptocurrencies available, as well as all their exchange pairs (the coins with which each asset can be traded). 

In any case, the most advisable thing to do is to create an account in the most used exchanges.

To register you must go through the KYC (Know Your Customer) process, which is nothing more or less than the verification of your identity in order to comply with the law and current regulations. It is a bit heavy because of all that is required but be wary of sites that do not require it. 

No exchange is free from cyber-attacks and there have been some very notorious cases of millionaire thefts of client funds by hackers. In such cases, you can write off your money. “So I’m not worth the risk of having my money there”, you may say, which leads us to highlight…

The Importance of Having a Hardware Wallet 

At this point is where you must be clear that all exchanges are custodians of your cryptocurrencies. In other words, they give you a digital wallet within their application to store your assets, but they are not really under your power. You simply have the “promise” that they are yours when you want to withdraw them.

There is a phrase widely used in the industry that says “Not your keys, not your coins”, in other words, if you don’t have your private keys, they are not your coins.

For them to be, you must have a hardware wallet, which is an electronic device where cryptocurrencies are stored cold (offline). It’s sort of like a portable safe in which you and only you will have the private keys.  

That way, you can rest assured that no one will steal them unless you make the mistake of leaving the access keys within the reach of anyone or providing them yourself. As Spiderman used to say, “with great power comes great responsibility”. In your case, it is to ensure the security of your “keys”. You are going to be your own “bank”.

When you activate a wallet, you are given a “seed phrase”, which is a series of words in a set order that, in the event that your hardware wallet is lost or damaged, you will have to enter in the new one in order to recover your account and, with it, your assets. 

Hence the importance of keeping this key in a safe place and never sharing it with anyone you don’t trust. No exchange, app, or anyone should ever ask you for it under any circumstances. Without it, you will have nothing. Right that down.

What many investors do is to leave in the exchanges only the funds with which they are going to trade (speculate to make money, changing some currencies for others according to trends) and keep (“holdear” in the jargon of the guild) the bulk of your portfolio in a cold wallet.

If you do not want to trade (if you are new it is better not to start with it until you get a good grasp of how this market works), the ideal is to have all your funds in your hardware wallet.

In any of them, installing the corresponding apps, you can operate with your cryptocurrencies in addition to storing them.

Buy Periodically Rather than All at Once.

There is a technique that is especially for buying at any time, but also for profit withdrawal in bullish cycles, is very wise and has proven to be economically beneficial: the Dollar Cost Average (DCA). Who says dollar, says euro, or whatever currency.

The DCA consists of making recurring periodic purchases/sales of the same asset, regardless of its price at any given moment. As in the long run, they are assets that have more or less growth trends, the price of your investments is thus prorated instead of gambling it all at once on a single card.