2 SUGGESTIONS FOR THE SAVVY INVESTOR.
Crypto is to the financial world what the car is to the horse. As traditional methods of finance and old, established financial institutions are becoming outdated, more and more people are turning towards fairer and more democratic forms of finance, in what has since been labelled the ‘crypto revolution’.
What’s so attractive about crypto to these new financial consumers?
1. Transparency of financial transactions
2. Inability to manipulate the market
3. Diversification of financial portfolio
The first two points above are intrinsic solutions to the problems associated with traditional finance. With the ability of central banks to print money in a crisis, inevitably the very value of money itself can be altered and manipulated. To make my point by painfully generalising, in traditional economies the fat cats get fatter and the …er… thin cats get thinner.
This, dear reader, is possibly what brings you to this article. You’re jaded with the banks, perhaps you’re completely unbanked, or perhaps you’re just interested in jumping aboard the crypto train for its investment potential.
All and any reasons are valid.
The question is, how can you get involved in the crypto markets, safely.
1. Embrace the volatility of crypto. Stop comparing it to fiat.
Crypto markets are extremely new. Whilst they are growing, and still relatively small compared to the giant global markets of fiat currency and stocks, they are prone to volatility. Weekly increases or decreases in value of up to 20% or more in BTC are not unusual, where one might only expect a weekly percentage change of up to 2% on a stable currency such as the USD.
In practice, this means that your bitcoin might be worth $20,000 dollars today, and $13,000 tomorrow.
Seasoned crypto investors however are not phased by this characteristic. They do not look at marginal increments in price movements. They are in it for the long run. They view instruments such as BTC as a long-term investment, so it doesn’t matter to them if the value changes from day to day, as long as the overall average value continues moving on the up, which, as of writing this article – it has been.
Speculating therefore – and specifically with margin – could be a fools game when it comes to crypto. Those who do so and are successful at it, are investing only what they can afford to lose, and are often using solid technical strategies with tight stops.
2. Store your investment somewhere empirically trusted.
There is no margin for error here. If you are holding TIOx, ETH or BTC, you should know absolutely everything about the place you are storing it. Research thoroughly the hardware wallet if you are using one. Read online reviews. Check its security protocols. And while you’re at it – check your own security protocols. Where are you storing your secure access information? Is it handwritten? Is it online?
This author, despite having been an ardent crypto fan for nearing on 4 years now, still struggles with the security hazards of the crypto storage. In my view, the high barriers of entry to crypto investing are NOT the value of the initial investment, but indeed the several layers of security needed to open and maintain a crypto wallet and affiliated accounts.
Here are my main 2 newbie takeaways:
– Do not store your crypto passwords online anywhere, mobile devices included
– Favour secure hardware wallets over online wallets for hodling
Whilst shadow and secrecy has pervaded the crypto world since its inception (arguably) 11 years ago, there is no doubt that it is starting to enter the commercial world.
Removing the fear of investing in crypto by appreciating that it is its own beast, and quite unlike fiat, is the first step to understanding crypto. It’s a truly democratic form of finance that I personally believe, will continue to grow for as long as central governments (and their central banks) continue to manipulate their economies.
This article was written by Helen Astaniou, CMO of TIOmarkets. The TIOx is the native token of TIOmarkets and offers its holders access to daily crypto interest accounts via the TIOprime Pool. Find out more by visiting www.tioprime.com
Risk disclaimer: Any information contained within this article does not constitute investment advice. All investment involves risk. As a general rule, you should only trade in financial products that you are familiar with and understand the risk associated with them. An investment in TIOprime may not be suitable for all investors. If you have any doubts as to the merits of an investment, you should seek advice from an independent financial advisor. Under no circumstance should any statements made by TIOprime to be taken as legal, financial or tax advice. Please see our risk warning policy and seek independent professional advice if you do not fully understand. Past performance does not guarantee future results.