Most new crypto traders struggle to get caught up in the hype. That makes it quite difficult for them to start trading. Digital currencies have quickly risen to prominence in the portfolios of many retail and institution investors. But at the same time, analysts are cautioning investors about the volatile nature and unpredictability of cryptocurrencies.
If you have finally made up your mind to invest in the cryptocurrency market, it is essential to do your research. Having said that, this blog post will take you through some of the things you need to know before investing in cryptocurrency.
Know the ‘Why’ Behind It
It is essential to know why you’re trading crypto in the first place before you get to convert Bitcoin to Rands. There are numerous investment vehicles available, many of which allow for greater stability and less risk than digital currencies. No wonder understanding the ‘why’ behind it is a crucial step.
Do you want to invest in Bitcoin because of its trendiness? Maybe you have a more compelling reason for an investment in specific digital coins? Of course, every investor has their personal investment goals, and exploring the crypto space may make more sense for some than others.
Always Secure Your Keys
A private key in the crypto world is a secret alphanumeric code that allows users to access and control their digital assets. You can deem it as a password that grants ownership and control of the funds associated with a given crypto address. If you have access to the private keys of an address, rest assured to have access to all of the funds in that address.
Be sure to keep your private keys safe and secure by storing them offline in a cold wallet or leverage a renowned custodial service. There is also the option of keeping your cryptocurrency on exchange to keep it liquid and easy to exchange.
Perform Test Transactions
Cryptocurrency is unlike banks in many aspects. One of the reasons for understanding this is should you accidently send money to the wrong place, it may be almost impossible to recover. In some instances, you may lose your money forever.
That explains why it is always a good idea to understand the essence of performing test transactions before joining the cryptocurrency world. This comes in handy when sending crypto since they allow you to confirm that the transaction will be successful before sending a large amount of funds.
Test transactions entail sending a small amount of crypto to a test address. The essence of doing this is to simulate a real transaction without actually sending funds to another party. This helps you confirm that your wallet is working efficiently, and ensure you have the correct recipient address.
Final Thoughts
There is more you need to know before you finally convert Bitcoin to Rands or trade crypto. Take it upon yourself to conduct a thorough research, after which you can start trading Bitcoins like the pros.
