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5 Questions to Ask Before Investing In Any Cryptocurrency

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Investing In Any Cryptocurrency

The level of exposure cryptocurrency enjoys in the financial community makes it easy to forget that investing in it is a journey, one which investors can ultimately succeed or fail, but will likely face a measure of both at certain points. Before starting down this journey, however, there are certain questions to ask before investing in cryptocurrency if you want to stand a chance at succeeding.

  1. What is my reason for investing? 

This will seem like a question with an obvious answer to most. After all, it’s rare for people these days to hear the word ‘cryptocurrency’ mentioned outside the context of wealth acquisition. The truth, however, is that not everyone invests in cryptocurrency as a way to make to become millionaires, just the majority.

  1. Which cryptocurrency is right for me? 

There are many forms of cryptocurrency currently available to an interested investor over 1,800 in fact. Each of them has its own background, management, and potential. All of these will need to be weighed to exploit the fluctuation of multiple coins as a short term investor. A long-term investor has to be more concerned about choosing specific investments. The markets are incredibly unpredictable and are prone to sudden shifts. A few seem reliable including Bitcoin, Bitcoin Cash, Ethereum, and Ripple. However, they are less likely to display the drastic surges in value they saw in 2017. The best advice to either investor type is not to overcommit to a single cryptocurrency no matter how stable or promising it may appear (this exclude stable coins, which by their nature are created to be stable).

Related: How cryptocurrency works

  1. What is the best strategy for trading cryptocurrency?

There are numerous strategies out there that supposedly give investors the greatest possibility of making profit. In cost averaging you purchase a fixed amount of a certain coin periodically, while profit reinvesting simply involves placing profit you get investing in one cryptocurrency in a different one that shows promise. Balanced portfolio involves spreading out the risk by buying the same dollar/naira amount of multiple cryptocurrencies, but in an unbalanced portfolio you invest differing amounts in multiple cryptocurrencies based on how you think they will perform. There is no one strategy that will work for everyone, instead, each investor will have to decide which works best for them personally and financially.

Related: How to identify the next big Cryptocurrency

  1. What should I NOT do when investing?

There are several mistakes any investor could make that could ruin your portfolio. In fact, there are likely too many to list, but here are some of the more common mistakes people make.

  • Do NOT fall for FOMO (Fear of Missing Out): The fear that if you do not buy into a drastically rising cryptocurrency, you will be the only one not realizing a profit. In these cases, if you did not buy in before the actual rise, you are likely already too late, and will you are only likely worsening your position buying late.
  • Do NOT buy into a pump and dump: This is a case where a firm successfully builds up hype about their cryptocurrency before actually releasing a trustworthy product. The value of these will soar during the hype, but fall shortly after when people realize it was all smoke.
  • Do NOT overcommit on any one trade: It’s normal to be tempted to pour all your earnings into one trade that you are almost entirely certain will result in a profit. Don’t fall for this, remember the cryptocurrency market is incredibly unpredictable.
  1. Abandon ship because of an unusual dip

As I mentioned earlier, there will certainly be dips even with the most seemingly stable cryptocurrency, but this is not enough reason to simply abandon it. Remember when in doubt HODL.

Click here to Start investing in cryptocurrency today.

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What is Cryptocurrency And How Does It Work? 

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Obiex finance website

Cryptocurrencies are decentralized digital assets that operate on blockchain technology that in turn operates by storing a ledger of every transaction on all nodes powering the blockchain. 

In layman’s terms, blockchain technology is like a record keeper, it collects data (in blocks) and links one block of data to another, forming a chain. The data on the blockchain is open for all to see and cannot be easily altered. Blockchain technology can be used for a variety of use cases besides cryptocurrency, ranging from voting to crowdfunding, keeping health records, etc.

Using Bitcoin as an example, nodes are computers connected to the network to mine Bitcoin,  – this collection of independent nodes working together is what makes the network decentralized.

The decentralized nature of cryptocurrency is down to the creators recognizing flaws in traditional banking & financial systems like governments and financial institutions acting only in their best interests and not in the best interest of the common man, leading Satoshi Nakamoto (the creator of bitcoin and blockchain technology) to take steps to rectify that.

Related: What are NFTs?

To make cryptocurrency transactions, you will need to have a set of both public and private keys that will act as passwords protecting your crypto wallet. 

The Public key is connected to your wallet address, allowing you to share the address with others to receive cryptocurrency, while the private key is known to only you and is what you will use to approve outgoing crypto transactions from your wallet. 

Trading Cryptocurrency on Obiex

Obiex finance website

With the popularity of cryptocurrency trading currently at an all-time high, the biggest challenge for many rookie traders is selecting which cryptocurrency exchange to trade on.

If you fall in this category, the immediate priority should be finding an exchange that allows rookie traders to make trades easily, doesn’t charge extra fees and is completely secure. That exchange is Obiex Finance.

In this guide, you will be shown how to navigate the Obiex mobile app & website easily and what to do to get started with making cryptocurrency trades. 

Getting started with Obiex Finance 

Obiex Finance is a digital asset exchange and financial technology (Fintech) platform that gives its users the ability to easily execute cryptocurrency trades from anywhere regardless of their skill level.

Their commitment to ensuring that users get the best experience is shown in how they allow instant swaps from volatile coins like Bitcoin to stable coins like USDT, and vice versa, without confirmations. In a market where the value of crypto can fluctuate wildly, this feature is especially valuable as it allows users to seamlessly switch between making profits to saving those profits in a more stable currency before the value drops.  

To create an Obiex Finance account, simply head over to their homepage, click on “sign up”, fill in the required fields and verify your email address. After that, create wallet addresses for your crypto assets and you’re ready to start trading!

The cryptocurrency available for trading on the Obiex Finance platform are: Bitcoin (BTC), Ethereum (ETH), Binance Coin (BNB), Polygon (MATIC), Dogecoin (DOGE), Tether (USDT), Binance USD (BUSD), and USD Coin (USDC).

Getting Started with Cryptocurrency trading

After creating your Obiex account, you need to follow these simple steps:

  1.     Have a Trading Strategy: Trading cryptocurrency without having a strategy in place is the easiest way to lose your money. You will need to research the various crypto trading strategies thoroughly and choose the one that best suits your needs and temperament. For example, if you’re a patient person who is content to make smaller, safer trades over a long period of time instead of making riskier trades, then scalp trading is the best trading strategy for you. There are also other crypto trading strategies such as Swing trading, position trading, Arbitrage, dollar cost averaging etc.
  2.     Pick the cryptocurrency you’d like to trade: There are several cryptocurrencies available on Obiex Finance such as Bitcoin, Ethereum, Binance Coin, Tether etc. Selecting which cryptocurrency to trade is usually down to making a choice; whether to stick with the safer, more established cryptocurrencies like Bitcoin or to go with the more volatile coins that have a high upside and an equally high-risk factor like the Dogecoin which can move in either direction based on what Elon Musk tweets.

It is also important to note that when you pick a cryptocurrency to trade, it would be wise to ensure that the cryptocurrency matches the strategy you pick. For example, if your preferred strategy is patient scalp trading, then investing in volatile coins that have a high upside but carry a lot of risk is not the wisest move. 

To swap crypto on Obiex Finance, add the wallet of crypto assets you’d like to swap, send the crypto to the wallet you just created, navigate to the ‘swap’ option on your dashboard, and select the coins you’d like to swap. You will receive the swapped coin in your wallet balance immediately without waiting for network confirmations.

  1.     Securely store your cryptocurrency: The same way you’d protect your goods and profits if you had a physical store is the same way you need to protect your cryptocurrency so it doesn’t fall into the wrong hands.

You can store your crypto securely on your Obiex wallet but if you want an alternative, physical wallets are also an option. Physical wallets allow you to store your crypto in secure hardware, offline storage device reducing the likelihood of online hackers stealing your hard-earned crypto. This is a list of reliable physical wallets you can use.

Conclusion

If you’re a newbie to crypto trading, the keyword is patience. Taking the time to properly understand the market before making trades will stand you in good stead. While risks occasionally pay off, a patient, long-term strategy is required to make consistent profits. For more information about trading as a newbie, you can check this out to understand unfamiliar crypto terms and to learn more about spot trading and futures.

Obiex Frequently Asked Questions | Obiex FAQs

  • Will I be charged a fee when I swap coins on Obiex? 

No you won’t. While other crypto exchanges charge for trades and require confirmations to execute swaps, Obiex allows you to make free, instantaneous swaps without the delay that comes with waiting for confirmation. This also helps you avoid unnecessary losses.

  • Can I trade crypto on Obiex if I don’t know much about crypto? 

Yes, you can! The Obiex Finance platform allows both rookie and experienced traders to make easy, safe trades regardless of trading experience.

  • Can I send and receive crypto easily?  

Yes, you can. To send crypto, you will use your private key to execute outgoing trades and your public key/your wallet address to receive incoming trades. You can also send and receive crypto using just Obiex usernames.

  • Why do I need to swap coins? 

Swapping coins allows you to either acquire a coin you think is (currently) more valuable than a coin you have a lot of. You can also use swaps to ensure that your funds are invested in a more secure coin like USDT if you feel the volatile coin you’re holding is about to go on a bear run and lose value.

  • Do I get a referral bonus when I invite friends to use Obiex? 

Yes, Obiex has a referral campaign that rewards users that invite their friends and family to trade the minimum of $10 on Obiex.

 

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