Image by Sergei Tokmakov, Esq. https://Terms.Law from Pixabay 

Do you know the Meaning of Cryptocurrency or Crypto?

A Cryptocurrency or Crypto is a Virtual Currency by Cryptography. It is made to operate as a medium of Exchange, where individual ownership records are stored in a computerized database. They are not floated by the Government Agency of any Country making them as Security or shield against any interference and manipulation from them. The latest news is that the proposed Central Bank of India declared Digital Currency will not boost Cryptocurrency in India. It is a digitized asset spread through multiple computers in a shared network. There are many types of Crypto currencies, the primary one is Bitcoin launched in 2009. The other Cryptos are specific and vary with their scale. Some of them are Litecoin, Peercoin, Namecoin, Ethereum, Cardana. We need to just buy coins as per our desire and then sell at a profit.

How can one get Crypto?

We can get them from Brokers. There are some online Brokers who explain the ways to buy and sell, who may also be expert in dealing with other financial assets like Stocks, Bonds, and ETFs. This traditional method involves lower Trading Costs only for a few Crypto’s. The next approach is we can buy or sell through Cryptocurrency Exchanges, this exchange invites more customers by contributing Wallet Storage, Internet-bearing account options, and many more. The maintenance fees depend upon the asset holding.

Crypto Vs Stock

When we consider the basics of investing in shares, the immune system is owned by SEBI, the system is strong, the risk factor associated with Crypto is the same as stocks, the investor might remain with one Crypto for a long period if there is no demand in the market.

How is Investing in Crypto the same as Stock ?

  1. Invest only a small fraction of a portfolio into cryptocurrency: While considering diversifying stock investment portfolios, cryptocurrency can occupy a very tiny part of an investment portfolio. Investment is made by including the risk factor. To be on the safer side it is better to keep reserves of at least 7% of total investment. “Don’t put all your Mud Pots in one basket” is true here as well. Investors should not employ all their money in just one currency, alternatively they diversify their investments among several currencies.
  2. Think For Exchanges/Brokerages That perform crypto Trading: There are 500+ crypto trading exchanges all over the country to select from. Before investing, investors should prepare themselves by reading and understanding user testimonials and consulting with veteran investors or market experts.
  3. Know How Accounts/Wallet Works: Cryptocurrency is stored in exchange and crypto wallets, inviting specific options, benefits, technicalities, and assurance. Seeking the most suitable storage method for such currencies can be obtained either by availing expert suggestions or by initiating a hit and trial experiment. Investors should measure in aspects like additional charges, authentication, security etc before saying yes to one option.
  4. Be Ready For Market Variations: Trends show that the cryptocurrency market is more volatile than regular stock markets. Investors must be ready for sudden hikes and downs in prices. It is advised to stay ashore from crypto trading in case the mental health of the investor is affected to a great extent due to the extent of these volatilities.
  5. Diversify the Investment Opportunities: Alternate ways investors can invest in crypto include investing in companies with cryptocurrency holdings, investing in cryptocurrency infrastructure, and cryptocurrency (exchange-traded fund) ETF to name a few. This is the same as investing in bonds.

.     .     .