The world of cryptocurrency is calling and you’re ready to dive in, but where should you start? What’s the best way to build a solid crypto portfolio? Here are 4 things you need to know about getting started with crypto.
1. Crypto investing basics
Before considering crypto for your portfolio, you should have a clear idea of what crypto is and how it works. Cryptocurrencies are digital, decentralized currencies that live and breathe on the internet, and are made possible by a new technology called blockchain. The crypto movement started with the introduction of Bitcoin in January of 2009 and has flourished over the past decade, becoming a thriving asset market that brings equal opportunity to investors.
With that in mind, how different are the investment tools and strategies used in the crypto space compared to the ones you know from the stock market? The answer is: not much. You can do your own research to find out which cryptocurrencies are best for you. You can invest through a publicly-traded broker like Voyager and, when you use the Voyager app, you can utilize a dollar cost averaging strategy (DCA), limit orders and recurring buys to invest steadily and time the market.
The basics of investing in crypto are pretty similar to other assets, but the difference of potential becomes apparent when you discover how much easier crypto makes it to diversify, build, and maintain a thriving portfolio.
2. Different types of cryptocurrencies
You may know about Bitcoin, but the crypto industry is so much bigger than just one asset. As of today, there are over 9,000 altcoins available on the crypto market, where altcoins are defined as any cryptocurrency that isn’t Bitcoin.
Altcoins have added diversity to crypto offerings, creating different sectors of crypto. For example, USD Coin (USDC) is a stablecoin that is matched to the US dollar and allows you to invest while earning 9% annual rewards when you hold USDC on Voyager. Another popular sector of crypto is Decentralized Finance, or DeFi, in which networks allow for borrowing, lending, and exchanges through decentralized platforms.
Altcoins also range across a vast number of interests, from sports and gaming to entertainment—some of them even operate as partial charities or work toward environmentally sustainable goals, like Shiba Inu coin or Avalanche.
3. How to build a well-balanced crypto portfolio
With all of these options, where should you begin? Many start their investment journey with well-known picks, like Ethereum and Bitcoin. Both assets have been around for a while and have built a steady reputation in the market. Other altcoins may be newer or have yet to gain prominence in the market, but you can monitor assets of interest by keeping an eye on their trade volumes, market caps, and planned network upgrades. These stats will help you determine the amount of coins available for a specific asset, how they’re being traded, and their plans for the future.
Some prefer to invest and HODL (i.e., “Hold On For Dear Life,” or hold without selling) crypto assets because of market volatility. This can be beneficial on several platforms because it can allow you to earn rewards on your investments. For example, you can earn 12% annual rewards on Voyager by holding assets like Polkadot (DOT) in the app.
The nature of crypto allows for investors to buy assets in fractions, meaning you can buy some Bitcoin if you’re not ready to buy one whole Bitcoin, giving you more room to experiment with buying assets. Also, because the crypto market is inherently more volatile, there is almost always a chance to “buy the dip,” or purchase assets when they are at a lower value. This is how the decentralized aspect of the crypto market provides opportunity for all.
4. The easy way to build and track your crypto portfolio
Voyager is creating an alternative to monitoring and tracking various hot wallets and crypto platforms. On Voyager, you can store your portfolio and monitor all of your assets in real time with just a swipe. There are currently over 70 assets to choose from, with more being added all the time, and 30+ assets offering annual rewards up to 12% when you hold the monthly minimum balance in the app.
Trade, diversify, and begin your crypto journey with Voyager today.
All digital asset transactions involve risk, and the past performance of a digital asset or other financial product does not guarantee future results or returns. Cryptocurrencies are highly speculative in nature, involve a high degree of risk and can rapidly and significantly decrease in value. It is reasonably possible for the value of Cryptocurrencies to decrease to zero or near zero. While diversification may help spread risk, it does not assure a profit or protect against loss. Traders should consider their objectives and risks carefully before trading. Previous gains may not be representative of the experience of other customers and are not guarantees of future performance or success.