Cryptocurrency is an extremely volatile asset. Because of this, investing in it can be daunting for beginners. It involves a vast amount of processes and jargon. However, for all its risks, it also offers high rewards. Once you have mastered cryptocurrency exchange rates, you have the potential to earn a huge return. Using an exchange rates api can really help you up your game as well. To help you get started, we have broken the process into six simple steps. Now, let’s dive in.
Table of Contents
1. Should I do Research?
Before investing any money in cryptocurrency, you need to thoroughly research cryptocurrency about the platforms, also known as exchanges. Currently, there are over 500 exchanges where people buy and sell cryptocurrencies.
Be aware. There are plenty of sharks out there waiting to take your money. Last year, crypto investment scams surged a whopping 57% in the UK. You don’t want to fall victim to scams and lose your investment. To avoid hassles, invest only through reliable and established platforms.
You should also only invest in established and trustworthy cryptocurrencies. Try to look critically at digital currencies. How many people have invested in them? Do they have any links with the crypto industry? Avoid putting your money in coins that make big promises but haven’t delivered anything tangible. Their exchange rates will fall drastically.
2. Should I Get Ready for Extreme Volatility?
Cryptocurrency investment is a game of high-risk and high-reward. The marketplace is extremely volatile and cryptocurrency exchange rates change frequently.
Bitcoin is one of the world’s best-performing assets over the past 10 years. Earlier this year, however, its price fell by over 50%. Investors didn’t expect such a massive drop. The situation did improve though. Eventually, Bitcoin rebounded to an all-time high.
This is just one example of how extremely volatile the marketplace can be. Remember, you need to be mentally and strategically prepared for anything.
3. Should I Learn to Manage Investment Risk Efficiently?
If you want to be successful in the world of cryptocurrencies, you need to effectively manage the risks associated with your investment.
Imagine a scenario in the next year where you believe that the exchange rates of specific cryptocurrencies will go very high. You might be tempted to invest a lot of money, but what happens if the cryptocurrency exchange rates drop in the next year? Be aware of the risks you are taking and manage them accordingly.
You should limit how much you invest in a particular digital currency. You should never trade with more money than you can afford to lose. Cryptocurrency investment can be highly profitable. However, there’s a lot of risk involved. Always focus on managing your investment risk efficiently.
4. Should I Diversify My Investment?
Diversifying your investment is the key to success. You shouldn’t put all of your money on a single digital currency. Instead, you should invest in different cryptocurrencies. It will prevent you from being overexposed.
By diversifying your investment, you also reduce the risk of losing money due to plummeting cryptocurrency exchange rates. You will always have the chance to overcome a loss using your profits from other digital currencies. The marketplace is very volatile. So, don’t invest all of your money in a single cryptocurrency.
There are thousands of cryptocurrencies to choose from. Do your research appropriately and diversify your investment across multiple digital currencies. It’s the best strategy for making huge profits while effectively mitigating risk.
5. Should I Focus on Blue Chips?
Blue chips refer to highly stable and reliable cryptocurrencies. Each of these digital currencies also has a massive market capitalization of over $2 billion.
Bitcoin and Ethereum are prime examples of blue chips. They are two of the most established cryptocurrencies on the market. In addition, they both have market capitalizations over $2 billion. There are other blue chips on the market as well. These include Binance, XRP, Litecoin, Cardano, and Polkadot.
Blue chips are more costly. Their exchange rates are high. However, they are also quite stable. As a result, they are less of a risk. If you want to invest more safely, then you should focus on blue chips. Then you can more safely speculate in emerging cryptocurrencies, like Dogecoin and Matic.
6. Should I Use Cryptocurrency Dashboards?
A cryptocurrency dashboard is a platform that provides an overview of all of your crypto accounts and assets. It allows you to monitor the ever-shifting value and exchange rates of digital currencies.
By integrating reliable cryptocurrency APIs, like coinlayer, you can observe changes in your portfolio in real time. It provides you with accurate information, you can use to make informed business decisions.
Cryptocurrency dashboards save you a lot of time. They also enable you to more easily understand and manage different crypto accounts and coins. This means you can diversify your investment without worrying about losing track.
Should I integrate Coinlayer into my dashboard?
Coinlayer is a powerful API that offers highly accurate cryptocurrency exchanges rates from reliable sources. It will never give you inaccurate data. It is also lightweight and blazing fast. So, you should seriously consider integrating Coinlayer into your dashboard.