How to invest in cryptocurrencies in 2023￼
Learn about the prospects of the cryptocurrency market and safe ways to invest!
Digital assets, such as cryptocurrencies, are becoming an increasingly popular investment option for those who want to earn good short-term income. However, it takes knowledge and the support of a specialized and reliable digital brokerage company for the results to be effective.
Cryptocurrencies, which in practice have been around since 2008, are still considered to be recent assets on the financial market. Therefore, it is common for people to have doubts and curiosity about how to negotiate them.
In this context, knowing how to invest in cryptocurrencies is very important in order not to make a mistake, especially for beginners who want to buy cryptos or invest in crypto funds.
If you are an enthusiast of this market and plan to bet on this type of investment in 2023, here are some fundamental tips to operate safely with digital currencies!
What are cryptocurrencies?
Cryptocurrencies are basically digital money. They are decentralized currencies, which means that they are not regulated by governments or financial institutions.
In practice, cryptocurrencies can be traded without intermediaries. They are created on Blockchain networks with encrypted technology, which guarantees the security of data and transactions.
⚠️ There is a difference between a cryptocurrency and a token that we will not address here; for general purposes, whenever we use cryptocurrency we are referring to both.
How to Invest in Cryptocurrencies for Beginners
For those who are starting to consider investing in crypto, but don’t even know how to take the first steps, it is interesting to understand that there is a huge universe of digital assets to be explored, and that it goes far beyond Bitcoin, the largest and most popular cryptocurrency on the planet.
If you want to learn how to buy cryptocurrencies, keep in mind that the number one tip is to think about the security of the transactions. Therefore, we will explain to beginners how to buy cryptocurrencies safely.
First of all, it is essential to have an account at a brokerage company to exchange your reals for the cryptocurrency of your choice, such as Bitcoin, Ethereum, Solana, Cardano, Doge Coin, among many others.
On the CoinMarketCap website, you can track the market capital and current price of the world’s major cryptocurrencies and, from there, lay out a plan for how to invest in cryptocurrencies in 2023.
By knowing what the virtual currencies are, the price of each one, and after opening an account with a reliable broker, such as Binance, Mercado Bitcoin, Novadax, or even XP Investimentos, it is possible to buy and sell cryptocurrencies and start trading.
In summary, the step-by-step for buying cryptocurrency safely is:
- Study hard about this new asset class;
- Open an account with a serious and liquid broker;
- Invest in crypto assets that are well rated by analysts.
How to invest in cryptocurrencies with little money
In fact, it is common to hear stories of people who have managed to become rich by making an investment in digital assets with little money, because of the appreciation of cryptocurrencies.
In other words, by analyzing the value of BTC in 2013, when it cost about R$150.00 a unit, and comparing it to the current reality, whose value is about R$96,000, we can calculate a huge appreciation of about 144,000%.
This means that in the case of the “early adopters”, as the first investors are called, the profit was really extraordinary.
However, today, the amount needed to invest in an entire Bitcoin is unaffordable for many people, which leads investors to buy “satoshis,” which are fractions of the digital currency.
It is worth saying that at brokerages you will find digital currency options that have not yet appreciated as much as BTC and you can take advantage of this volatility if you choose the right crypto.
There are famous cases, such as R$5,000 investments made in cryptocurrencies that have appreciated in value up to R$500,000 or R$1 million. Even so, in a universe with several cryptocurrencies, it is very difficult to choose the one that really has the potential to burst onto the market.
In this case, the suggestion is to look for companies or professionals who know how crypto valuation works, so that it is possible to invest with awareness and well-founded decisions.
What are the brokers for investing in cryptocurrencies
Below is a list of the top brokers for investing in digital currencies:
- Bitcoin Market;
- Among others.
Important tip: don’t leave your digital assets, i.e. your cryptocurrencies, in the brokerage houses’ wallets.
In practice, crypto brokerages should only be used as platforms for exchanging, buying and selling cryptos. In other words, right after the transaction, it is essential to withdraw your assets to a digital wallet.
Recently, the collapse, bankruptcy filing and lack of liquidity of the world’s second largest crypto broker FTX has shaken the financial market.
According to reports in the national press, some Brazilians even lost the value of a property with the FTX bankruptcy.
The founder and former CEO of the brokerage firm, Sam Bankman-Fried, ended up in jail in the Bahamas. Sources reveal that about $1 billion has simply disappeared.
Therefore, the guidance is to never leave your cryptocurrencies “sitting idle” at brokerages, so as not to take risks like this.
Learn how to buy cryptocurrencies at brokerage houses
With the account opened at a brokerage house, after filling out a form with personal information such as address, document number, full name, and the submission of a photo of a valid document (passport for example), you can already buy your first cryptos.
The process consists of transferring your reals to your crypto broker via a PIX or Bank Transfer. In some cases, credit cards are also accepted.
Then your available balance will appear in your brokerage account. With this, you simply convert your reals to dollars and then exchange the dollar for the desired cryptos.
For example: you deposited in December 2022 about R$700 reais. At the dollar exchange rate of the day, this equals approximately $133, which can be exchanged for cryptos such as BTC, ETH, SOL, XRP, and many others.
Then, all you have to do is wait for the crypto to appreciate in value to sell and profit from the price difference!
The logic behind trading is quite simple, but you need to do your homework and get to know the cryptocurrency you are interested in very well.
What is the minimum amount to invest in cryptocurrencies?
You can start investing in cryptocurrencies with as little as R$10.00 or R$50.00.
However, the return will always be equivalent to the investment made. For example, if you bought a crypto that doubled in price, your initial $50 will become $100.
If it were a higher amount, like R$1,000 or R$5,000, your profit would also be more voluminous.
On the other hand, because it is a risky market, the damage can also be great.
Look: Bitcoin, the world’s most popular cryptocurrency, has fallen from around $60,000 to $17,000 per unit.
Thus, it is important to understand that this is a market with great volatility, that is, with high variation in the price of assets.
As stated earlier, you don’t need to buy 1 whole Bitcoin to start investing in cryptocurrencies. To experience the market and gain confidence, it is possible to buy R$50 in satoshis and wait for the asset to appreciate (or depreciate).
Is it a good idea to invest in cryptocurrencies?
For those who have a moderate investor profile or like risky assets, because they understand that the volatility of a cryptocurrency can make them rich with a low capital, this type of investment is ideal.
In addition, there are correct ways to make the investment, such as using security locks at brokerage houses so that the crypto is sold before a large devaluation, should there be any sudden movement in the market.
In any case, it is very important to have professional help to take the first steps and know how to invest in cryptocurrencies in 2023 in a safe and promising way.
What are the risks of cryptocurrency?
As in the stock market, in the stock market, the risks of cryptocurrency are of devaluation of the asset.
In other words, you paid R$10 for a certain digital currency and, because of the market’s oscillation, it became worth R$5.00. If you sell your asset at the new value, there will be a big loss!
However, you can wait for the market’s recovery movement and study fundamentals to find out if there are chances that your cryptocurrency will return to or exceed the original purchase price, generating a profit.
Currently, some Bitcoin analysts are very pessimistic about the digital currency in 2023, speculating a unit value at $10,000. However, there are also experts who believe in a great appreciation of crypto in the medium and long term.
So, the question remains: is the present moment an opportunity to buy cheap to sell higher in 5 years, for example? This is a possibility that has attracted several potential investors to the crypto market.
Where to store your cryptocurrencies?
The guidance is to keep your cryptocurrencies in digital wallets, which are available in online versions (which are stored in the cloud and on a third-party server).
In addition, it is also possible to keep cryptos in wallets that are stored on your computer and in physical wallets, which look like a USB stick.
Today, there is a consensus among cryptocurrency experts that the safest wallets are Hardware Wallets, which are not connected to the Internet and do not give access to possible attackers.
One of the world’s best-known Software Wallets is called MetaMask, which is widely used by cryptocurrency investors.
Other widely used wallets are the Trezor and the Ledger. In this case, when you buy your cryptos at brokerage houses, you simply transfer the assets to your wallet and keep them safe until the time of sale.
What to do after buying a cryptocurrency?
There are several strategies to profit as a cryptocurrency investor by trading, i.e. buying cheap and selling higher.
The trade can be daily, as the “day trade” is known, when the investor takes advantage of the day’s oscillations to make a profit on the sale.
However, there are other types of trades that are more interesting for those who intend to invest in cryptocurrencies, such as holding the digital currency for a few months, making a “position trade”; or for a few years, for a long-term trade.
Thus, it is not enough to know how to invest in cryptocurrencies, it is necessary to define what profile suits you best, what brings the best financial returns, and what are the strategies that make you most comfortable and confident when dealing with the digital currency market.
Some crypto investors do very well holding the asset for long periods of time, as they don’t get as restless or desperate at times of price declines, as happened in 2022 with Bitcoin and Ethereum.
In general, it takes strategy and planning to know when is the right time to sell the asset.
On the other hand, the investor who does not want to be exposed for so long can opt for the “position trade” or even the “day trade”, exchanging his digital currencies for dollars or reais on the same day, in weeks or months.
Study the Subject
By studying how to invest in cryptocurrencies, reading a lot about the subject, following reliable experts, and staying well informed, your chances of choosing an asset that has the potential to appreciate in value are much greater.
It is also important to highlight that it is fundamental to choose a digital asset that has solid fundamentals, usability, is on the radar of large investors, and is linked to social and environmental causes, as is the case with Kanna Coin, which is in its pre-sale phase.
Kanna has created its own ESG Token, dubbed KNN. In the model adopted by the company, besides obtaining the appreciation of the digital asset, the investor will also generate environmental impact through the recovery of degraded soils with the use of cannabis.
Acting as a DAO (Decentralized Autonomous Organization), Kanna guarantees transparency, security and equal rights for all investors. Want to know more about KNN Token? Check out all the information on our site!
What are the advantages of cryptocurrency?
In terms of investments, cryptocurrency has a very high level of volatility, and can make the investor rich with little invested capital.
Unlike stocks of consolidated companies, which take years to appreciate by 30%, a crypto can increase in price in this index or even double in value in a week.
The cryptocurrency investor who is well informed and prepared to operate in this market is able to take advantage of this volatility for quick and substantial profits.
By getting the buying and selling operation right, you can double or triple your capital in weeks or months. Therefore, learning how to invest in crypto is one way to have great returns for the future.
Cryptocurrency: what is a crime in this market?
In general, the main crimes involving cryptocurrencies are linked to financial pyramids, which are prohibited in Brazil.
In this case, an ill-intentioned group creates a random crypto and advertises it on the market as a great investment opportunity, since “the currency is just getting started and has the potential to appreciate greatly in a short time.”
In these cases, it is common for the group to present charts comparing the new asset to Bitcoin’s expansion and to say that consolidated currencies no longer have “room to grow, because they have already reached their limit.”
In pyramid schemes, where it is necessary to get more investors and create a volume of capital without being tied to a substantiated asset, the first ones who enter the business end up taking the money of the last ones who invest, until the whole structure breaks down.
So stay tuned and don’t fall for scams!
How to invest in cryptocurrencies safely?
Before investing in cryptos it is essential to study about digital currency investments, choose solid brokers, have a digital wallet to store your cryptos, and know the basics of each project, such as Bitcoin, Ethereum, and Solana.
The security lies in the knowledge you gain before you make your first operations, and in the support you will receive from experts in the field.
Finally, before betting on crypto-activities, take an investor profile test, evaluate whether this type of investment makes sense within your financial reality, and be prepared to monitor your assets regularly.
Want to know how to invest in digital assets and still generate social and environmental impact? Meet