Investing in cryptocurrency is a hot topic now that the crypto markets are crashing. Here’s how you can start investing in crypto during the current bear market as a United States resident.
Understand the Basics
Cryptocurrency is digital money that’s secured and backed by cryptography to verify transactions on the block (a publicly available ledger). Crypto allows users to send and receive money anywhere in the world within seconds for extremely low fees.
World governments issue “fiat currency” that loses value over time but crypto assets can actually gain in value due to a fixed supply and growing adoption.
Choose a USA Friendly Cryptocurrency Exchange
Crypto exchanges provide an honest platform for buyers and sellers to perform crypto transactions in a safe environment. As an American, you can sign up for several crypto exchanges to start investing in cryptocurrency.
Here’s a few exchanges for US crypto beginners:
Verify Your Account
Most crypto exchanges require KYC to verify your crypto trading account. Upload a copy of your US driver’s license or US passport to confirm your identity. Don’t skip this step because you won’t be able to invest unless you do so.
Make a Fiat Deposit
Link your checking account to your crypto exchange and make a USD deposit into your trading account. Most crypto exchanges require a minimum of $10 deposit and set max deposit limits based on your account history.
If you want to invest a large sum then make a wire transfer instead. Wire transfers charge a fee depending on which crypto exchange you use.
Research the Best Cryptocurrencies
There are currently over 20,000 cryptocurrencies in existance but most exchanges allow you to purchase a small fraction of that number.
For example, Coinbase offers 150+ cryptocurrencies available for trade and that’s a good starting point. Here are some of the best cryptocurrencies to buy when you are first getting started as a crypto investor:
- Bitcoin: The backbone of any crypto portfolio and should have a decent allocation to protect yourself from downside risk
- Ethereum: ETH is the 2nd most popular cryptocurrency and carries a lot of value in the web 3.0 movement
- Litecoin: The #2 oldest cryptocurrency that’s lasted over a decade now. LTC is extremely undervalued
- Decentraland: MANA coin is a good metaverse coin to invest in.
Create an Investment Strategy
Most crypto investment strategies revolve around two basic types of investors: traders and long term HODLers. Trading crypto is a good way to make quick gains but you can blow up your trading account and lose everything.
HODLing, on the other hand, is a good long term investment strategy but carries added risk as well. Many cryptocurrencies become popular over social media but end up losing 99% of its value over time as investors dump their coins and move onto the next hot crypto coin.
Don’t be afraid to cut losses quickly if you are losing money on a crypto investment because you can buy it back cheaper in the future.
I recommend a Bitcoin DCA strategy to build up a sizeable crypto investment portfolio over time.
Place Your Trades
Place a market or limit trade to acquire your cryptocurrency. Market trades execute at the current market price while a limit trade executes only when your price target is reached.
Track Your Investments
Track your entire cryptocurrency investment portfolio using a tool like Cointracker. You can manage your performance across several different exchanges and wallets under one central dashboard
The United States took control of global Bitcoin mining and I believe American will become extremely crypto friendly by 2030.
Now is a good time to invest in cryptocurrency while there is fear in the markets.