The pace at which the world is moving means you may be left out if you don’t invest in cryptocurrency. Cryptocurrencies present new and advantageous investment paths. However, like every high-return investment, cryptocurrency is high-risk. The crypto market is volatile; you can lose money as fast as you gain it. Therefore, it would be best if you had the market’s volatility in mind while taking steps to invest in crypto.
Beyond the crypto market’s volatility, several other issues persist. Crypto’s innate issues include; dispute on intrinsic value, overall environmental effect, and the de-powering of governments. Nevertheless, despite the imperfections, the global cryptocurrency market’s valuation surpasses $2trillion.
The cryptocurrency market’s valuation tells the tale of some things going right. Investor interest in the crypto market is increasing; governments are critically considering adoption, and new millionaires are rising. As a result, there is no better time to invest in cryptocurrency than now.
Cryptocurrency is very popular right now. However, it’s possible you still find it vague. In this guide to investing in Bitcoin and altcoins, we explore maximising the cryptocurrency boom.
Introduction to Cryptocurrency
The idea to have an internet currency first came to be in the early internet days. The goal was to have money that governments had no control over. DigiCash was the first attempt. But it was too early; failing was inevitable. It all changed in 2009 when an anonymous entity, Satoshi Nakamoto, released Bitcoin on the blockchain infrastructure.
What is Bitcoin
Bitcoin’s creation was the beginning of financial assets that governments have no control over. Not only was Bitcoin internet money, but it was also the most secure and decentralised currency. Beyond this, it offers anonymity, which was a selling point for early adopters.
How Bitcoin works is simple. Users can transfer Bitcoin to one another and convert it to Pounds (or respective local currency). The invention of Bitcoin brought about a new way of doing international business. Traditional banking systems always had problems with cross-border payment, but Bitcoin eliminates that. Users can make payments to colleagues in the farthest parts of earth without hassle.
What is Blockchain?
Blockchain is a digital ledger, which enables automatic duplication and distribution of transaction data amongst computers on the network. Transactions occur on the backdrop of a secure system known as the blockchain. The use of blockchain technology currently transcends Bitcoin and its peers.
Blockchain’s secure and manipulation-proof functionality breeds trust in people looking to make crypto investments. With blockchain as the premise technology, there are currently over 7000 crypto coins.
Unlike the world’s traditional currency, no government creates cryptocurrencies. Instead, the creation of new units of a particular cryptocurrency happens by mining.
What is Cryptocurrency Mining?
Cryptocurrency mining is a computer process involving the verification and documentation of data on the blockchain. The mining process is people and power-intensive; hence miners get a money reward. The money reward miners get is new units of the crypto they’re mining. For context, Bitcoin miners get Bitcoin rewards and Ethereum miners get Ethereum rewards.
Getting Started on Cryptocurrency Investments in the UK
Cryptocurrencies are getting more popular by the day. Beyond facilitating transactions, crypto coins are fast gaining recognition as stores of value. Cryptocurrencies are also increasingly becoming reliable assets. In a world where the internet makes it easier to build wealth, among other things, it’s only wise to invest in cryptocurrency.
The increase in online financial services breeds suitable conditions for crypto’s success. As currencies with a design of better efficiency and decentralisation, crypto resonates better with internet users. Because of the relative newness of crypto, volatility is still high. Also, being decentralised, crypto’s value still premises mainly on perception.
Cryptocurrencies used to be niche-based. The global community is trying hard to accept crypto and find a concrete place for it as an alternative to Fiat currency. Fiat currency is the money government provides; dollars, pounds, etc. The continuous search of crypto’s concrete place in the world is responsible for the daily talks and news you find on your timeline.
However, the world’s frenzy and hype around cryptocurrency shouldn’t be the sole reason you invest in the UK. As with other investment forms, you need to understand the value and market before you invest in cryptocurrency.
Understanding Cryptocurrencies’ Value
Currencies of the world, either Fiat or crypto, have their value from the scale of community around them. The three main community elements that influence a currency’s value are; utility, demand, and scarcity.
Private entities create cryptocurrencies. Hence, brand perception also factors into the coin’s value. The brand perception is a reflection of how well the founding private entity is doing with its project. For instance, Binance is a crypto trading platform; they have the Binance Coin (BNB). Therefore, if the company is not doing well in its primary role as a crypto trading platform, it’ll reflect on its crypto coin. When doing poorly, the public’s perception of a coin goes negative, affecting the price.
Utility
A coin has high utility if it has a specific use case within the blockchain ecosystem. The more scalable the utility of a coin is, the higher the value. The utility doesn’t have to be all-encompassing. They may include:
- Voting rights
- Exchange facilitation
- Technology
- Space travel
- Dividend payments
Utility doesn’t necessarily translate to linear value growth. But you should only invest in cryptocurrency with utility. If a coin doesn’t have a use-case, it’s either a meme or a scam.
Scarcity
Scarcity is a reflection of the number of coins in circulation. Being finite then places a higher value on the units in circulation. If there is an infinite volume of a crypto coin, it won’t have any value. To mitigate this, companies behind newer coins design them to have automatic crypto burn functionalities.
The burning process reduces the volume of coins in circulation rewarding owners that aren’t selling with more value. For instance, only about 18 million Bitcoins are in current circulation. The low volume of Bitcoin in circulation is responsible for its high value.
Demand
Demand is another value element to consider before you make crypto investments. The more the demand on a coin, the higher the value. Hence, when you monitor a coin’s demand trend, you can know when to buy and sell.
Other Factors To Help You Make Profitable Cryptocurrency Investments
Beyond value, here are some other factors you should have in mind when planning to invest in cryptocurrency.
Bitcoin isn’t the Only Crypto Asset
Owing to Bitcoin’s market share and sheer popularity, you probably think Bitcoin at the mention of cryptocurrency. However, several other cryptocurrencies exist and hold potential returns on investment. You don’t have to invest in Bitcoin; it’s all about finding the right one.
Research Before Investing
The cryptocurrency space is still new. When you find a coin with prospects, research as much as possible and stay abreast with information on the coin.
Go as far as reading whitepapers, journal publications, news, editorials, and blogs. In-depth research helps you better understand a coin’s utility, market, and demand.
Be Wary of Scammers
Cryptocurrencies are virtual coins, and blockchain is anonymous-driven. If you fall prey to scammers, it may be challenging to find the culprit.
How to Invest in Cryptocurrency: Investment Styles
The opportunities in cryptocurrency are unending. There is more than one way to make money with cryptocurrency. You don’t have to try all styles before you can maximise profit. You need to niche-down and focus. Focusing on a system that works for you is all you need to do. Factors that will influence your cryptocurrency trading and investment style are; taste, goals, and tolerance.
The different cryptocurrency trading styles include:
- Scalping
- Range trading
- Position trading
- Intraday trading
- Day trading
- Swing trading
- HODLing
With scalping, you’re looking to make money through quick market moves. Day trading, on the other hand, involves maximising profit per trading day. Range trading involves trading the current range. Intraday trading occurs over many trading days.
HODLing refers to the trading pattern where you hold on to the crypto as an asset for the long term. In swing trading, you trade from one set level to another. Position trading occurs over more extended periods.
Where Can I invest in Cryptocurrency in the UK?
How to invest in cryptocurrency in the UK has never been easier. With the sheer number of crypto exchange platforms in the United Kingdom, it’s easy to invest in crypto. Trading platforms optimise their systems to give you all you need right from their app. You can get market information, community information, live price charts, own a digital wallet, make transactions, and more on trading apps.
The basic logic of cryptocurrency investment is buying crypto, holding it for a long time, and selling when the value is way higher. The long-term, in this case, may range from six months to a number of years, depending on how long it takes for the coin’s value to hit your cash-out target.
To invest in cryptocurrency, you need two infrastructures; a crypto exchange and a wallet. The cryptocurrency exchange is the first of steps to investing in crypto. On exchange platforms, you get to buy crypto with your fiat currency — Pounds.
Several crypto exchange platforms exist in the UK. If you decide to invest in Bitcoin, you can either buy from the market directly or from a peer user looking to sell via any of these exchange platforms:
- Cex.io
- LocalBitcoins
- BC Bitcoin
- Exmo
- Coinbase
- Coin jar
- Bittrex
- Yobit
- BitPanda
- Swapzone
- Coinmama
Many of these platforms have a wallet to store your crypto coins. If they don’t, you’ll have to open an account with a crypto wallet platform. You can use hardware or software wallets.
Examples of hardware wallets include; ledger Nano X and Trezor Model T. Mobile app wallets you can use include; Trust Wallet, Coinomi, Meta Mask Wallet. There are desktop wallets like Exodus.
Cryptocurrencies to Invest in the UK
Once you carry out due diligence, you’ll make the best investments. All coins with credible use cases are worth your investment. It’s all about when to invest in them.
From our critical observation of the crypto market in recent years, we can provide you with a list of coins set to explode. First, Bitcoin still has a bright future, though you’ll need huge starting capital due to the high value. Other coins worthy of note include:
- Ethereum
- Cardano
- Litecoin
- Chainlink
- DogeCoin
- Ripple
- Stellar
- Cake
- Binance Coin
- Polkadot
Frequently Asked Questions on Cryptocurrency Investments
Here’s what you need to know:
What about the UK Cryptocurrency Ban?
The cryptocurrency-related ban in the UK is only against Binance, the world’s largest cryptocurrency exchange. While you can’t use Binance in the UK, there are other exchange platforms to leverage.
Can I Still Buy Bitcoin in the UK?
Yes, you can still buy and store cryptocurrency in the UK.
Best Site to Purchase Bitcoin in the UK
There is no single best platform for crypto exchange. Each platform has unique offerings. Do your research, find out what all these platforms offer, and pick the one that works for you.
What is the Minimum to Invest in Cryptocurrency?
There is no minimum amount you can invest in cryptocurrency; whatever you can afford is fine. There are ridiculously cheap coins you can buy to hold for years. If all goes to plan over those years, those coins should experience considerable percentage growth in value. In summary, whatever amount you have can help you secure crypto assets. Though, the larger your starting capital, the better.
Final Take
There is no perfect way to invest in cryptocurrency. Personal preferences, convictions, and available information will always influence an investment decision. Hopefully, the information in this guide to investing in Bitcoin and altcoins will help you take the first steps.
Investing in crypto is not a sprint; it’s a marathon. You’ll have to learn so much on the investment journey. Luckily, we can provide you with all cryptocurrency-related information, signal, news, and trading help to make your investment journey easier. Good luck!
