All you need to know about investing in crypto

Whether you are a seasoned investor or just beginning your investment journey, you’re sure to have heard of crypto assets. Right from investors, bloggers, influencers, entrepreneurs, and now even governments across the globe - everyone is talking about crypto.

Despite the increasing popularity, many investors are in two minds about this upcoming asset class. The number one reason is the lack of clarity in terms of regulations. The complex nature of cryptos also contributes to the hesitation. But whether you’re invested in cryptos or not, there is no denying that crypto adoption across the world has grown over the years. India alone has more than 20 million crypto investors so far. To keep up, governments worldwide have also started taking an interest and actively participating in understanding crypto assets to develop policies that benefit all.

With so much crypto talk going on around, it’s almost impossible to ignore it. If you’re smart about your finances and investments now is a good time to start your crypto journey, if you haven’t already.

What is crypto?

By definition, crypto is a decentralized digital asset built using blockchain technology and secured by cryptography.

For absolute beginners, crypto could be a great asset class to begin their investment journey with. Millennials are known to be more inclined towards investing in crypto than other asset classes. Based on an analysis of the userbase at CoinDCX, most crypto investors are in the age range 18 to 34. Other exchanges have shared similar data.

For a seasoned investor, crypto could be a great way to diversify their portfolio, a new asset class to explore, or an opportunity not to be missed; depending on how you look at it.

How to invest in crypto

Like with most new things, learning how to invest in crypto requires time and effort. But as long as you’re curious and enthusiastic about it, it’s not too difficult to figure out.

Crypto is, in fact, very similar to other asset classes. The way the market functions may vary because this is a 24X7 market but the basic dos-and-don’ts of investing stay the same.

Investors must understand the crypto market dynamics and their risk appetite and build their portfolios accordingly.

Understand the ins and outs of crypto. Try to learn the technology and the technical terms used by investors in the crypto space. As an investor, understanding the building blocks of this asset class and reading whitepapers explaining the origin and functionality of tokens is important for you. Only then can you make the right investment decision.

Educating yourself and doing so continuously is an equally important next step. This holds true especially for crypto assets because this is an evolving and rapidly changing industry. Keeping yourself updated with the recent developments will empower you to continue your investment journey with confidence.

Once you’ve educated yourself about crypto assets and the market, you’d be more confident about investing.

There are several ways to buy your first crypto. Cryptos like Bitcoin and Ethereum can be bought directly from crypto wallets or from other bitcoin owners via peer-to-peer transactions. The simplest way, however, would be to sign up on a notable and trusted exchange based on your country’s jurisdiction. Exchanges let you deposit fiat money in your account and buy crypto in exchange. It’s also the safest way to trade crypto.

Conclusion

Despite the initial doubts and uncertainty, crypto adoption has grown over the years. Optimism towards this new virtual digital asset class has also grown; amongst investors as well as governments worldwide. The way cryptos have been progressing, it’s safe to say that this asset class and the crypto industry will only continue to grow and evolve from here. There may soon come a time when investing in crypto could become a norm rather than an exception.

The pages slugged ‘Brand Connect’ are equivalent to advertisements and are not written and produced by Forbes India journalists.