www crypticstreet .com like Bitcoin and Ethereum are digital assets built on blockchain technology. A blockchain is a decentralized, distributed ledger that records transactions securely and transparently.
The first www crypticstreet .com , Bitcoin, was created in 2009 by the pseudonymous Satoshi Nakamoto. Bitcoin introduced the innovative idea of a decentralized digital currency that doesn’t require centralized intermediaries like banks or governments.
Since Bitcoin launched, over 19,000 other cryptocurrencies have been created. Some of the top cryptocurrencies today besides Bitcoin include Ethereum, Binance Coin, Cardano, Ripple, and Dogecoin.
To acquire and use cryptocurrency, you’ll need a crypto wallet. Wallets can be software applications, hardware devices, or paper wallets. They allow you to securely store your public and private keys and interact with the blockchain.
To easily buy, sell, and trade cryptocurrencies, you can use a cryptocurrency exchange like Coinbase, Binance, or Kraken. Exchanges allow you to convert fiat currencies like dollars into crypto and vice versa.
The world of crypto investing continues to grow and evolve. With proper research and planning, cryptocurrencies offer exciting potential rewards, though not without substantial risk. This guide will explore crypto investing basics for newcomers.
Assessing Risks and Rewards
www crypticstreet .com Investing carries significant risks that must be carefully evaluated before committing any money. The extreme volatility and price fluctuations of cryptos can result in huge gains, but also devastating losses if mistimed. Security risks like exchange hacks and wallet thefts are also a constant threat. Regulatory uncertainty creates an unpredictable legal environment for cryptos as well. However, the high potential upside makes these assets appealing for those willing to stomach the hazards.
Volatility is perhaps the biggest risk facing crypto investors. Major cryptos like Bitcoin and Ethereum regularly experience double-digit percentage swings in value from week to week and month to month. While this provides opportunities to profit from price swings, it also means portfolio values can sink rapidly during downswings. Timing entries and exits is challenging.
www crypticstreet .com also face security risks on multiple fronts. Exchanges can be hacked with millions stolen, while individual wallets can be compromised if private keys are not properly secured. No investor is immune from these cybersecurity dangers.
Regulatory uncertainty persists as well. Governments are still evaluating how to oversee and regulate cryptocurrencies. Major regulatory changes could impact everything from trading rules to tax policies. This legal unpredictability needs to be factored in.
However, crypto’s upside potential remains alluring. Bitcoin’s gains exceed 200% annualized since inception. Other cryptos like Ethereum have turned early investors into millionaires. For those with high risk tolerance, patience, and strong security practices, crypto presents an emerging asset class with blue sky possibilities. As with any high-risk investment, moderation is key.
Top Cryptocurrencies to Consider
www crypticstreet .com has exploded in popularity in recent years. While there are thousands to choose from, several stand out as leaders in the space and solid options for new crypto investors.
Bitcoin
Bitcoin is the original and most well-known cryptocurrency. It was created in 2009 by the pseudonymous Satoshi Nakamoto as a decentralized digital currency without centralized control. Bitcoin runs on a public blockchain that records all transactions on the network. It uses proof-of-work mining to validate transactions.
Bitcoin is accepted widely as a payment method and has spawned an entire industry around it. It has a market capitalization over $300 billion. Bitcoin is seen as digital gold – a store of value and hedge against inflation. The limited supply of 21 million bitcoins contributes to this perception.
Ethereum
Ethereum is a blockchain-based computing platform that can run decentralized applications, smart contracts, and more. Its native cryptocurrency is Ether (ETH). Ethereum was proposed in 2013 by Vitalik Buterin and went live in 2015.
Ethereum enables developers to build and deploy decentralized applications (dApps) that inherit the security and resilience of the blockchain. These dApps can serve many different purposes. Ethereum makes it possible to create decentralized financial (DeFi) instruments like loans and insurance.
Ether is the second largest cryptocurrency by market cap at over $200 billion. It powers the Ethereum network by paying for transaction fees and computational services.
Cardano
Cardano is an open-source blockchain platform founded in 2015 by Ethereum co-founder Charles Hoskinson. It aims to directly compete with Ethereum as a smart contract platform with lower fees and scalability advantages.
The Cardano blockchain uses a proof-of-stake consensus model called Ouroboros which is less energy intensive than Bitcoin’s proof-of-work. The ADA token is the native cryptocurrency of Cardano.
Cardano has an academic rigor in its design, using peer-reviewed research. It has slowly and methodically built out its technology in different phases. Cardano is still working towards full smart contract functionality.
Solana
Solana is a highly scalable blockchain network designed for fast, low-cost transactions. It utilizes a unique proof-of-history consensus combined with proof-of-stake. Solana claims to be capable of 50,000 TPS which would make it one of the fastest blockchains.
The native token of the Solana blockchain is SOL. There are over 400 projects built on Solana across DeFi, NFTs, Web3 apps, and more. Solana has seen massive growth in 2021 due to its speed and low fees.
Critics argue that Solana is too centralized and still needs to prove itself on security and uptime compared to older chains. But its throughput capabilities make it a leading next-gen contender.
Polkadot
Polkadot is a sharded heterogeneous multi-chain network founded by Ethereum co-founder Gavin Wood. It enables communication between different blockchains as well as pooled security between chains.
DOT is Polkadot’s native token used for governance, consensus, and bonding. Parachains are custom blockchains that connect to Polkadot for interoperability and security. Polkadot uses a nominated proof-of-stake consensus model.
Polkadot aims to become a fully decentralized “internet of blockchains” – a network of specialized chains working together rather than a single “one-size-fits-all” chain. This flexible design allows it to adapt to many use cases.
Researching and Analyzing Cryptos
When researching and analyzing cryptocurrencies to invest in, there are several key factors to consider:
Whitepapers
The whitepaper published by the cryptocurrency’s development team is one of the most important resources for understanding the project’s technology, goals, and roadmap. Read the whitepaper thoroughly to assess the problem the crypto aims to solve, the technology behind it, the tokenomics model, and the qualifications of the team. Analyze whether the whitepaper is well-written and convincing.
Technology
Look into the blockchain or other technology powering the cryptocurrency. Is the code open-source and auditable? Does it introduce any innovations compared to older cryptocurrencies? Is the crypto built on an established blockchain like Ethereum, or does it have its own proprietary blockchain? The strength of the technology is key for security and scalability.
Development Activity
An active, competent development team is a positive sign. Review the project’s GitHub repository to see how frequently code is committed. Check if the roadmap is being executed in a timely manner. Stay updated on announcements and upgrades by following the project on social media. Lack of development activity may indicate stagnation or abandonment.
Reddit and Social Media
The www crypticstreet .com community on Reddit, Twitter, Discord and Telegram can provide valuable insights on investor sentiment and analysis. Follow the official social accounts of the crypto project as well as community forums like subreddits. Be aware of hype, FUD (fear, uncertainty, doubt) and bias in social channels though.
Price Charts
Analyze price charts over different timeframes to identify support/resistance levels, trading volume, market cycles and trends. Chart analysis can inform good entry and exit points. However, crypto markets are extremely volatile, so rely more on fundamental analysis of the technology and development.
By thoroughly researching these aspects, you can gain a solid understanding of a cryptocurrency to make informed investment decisions. Stay skeptical, patient and analytical – don’t just chase hype when researching crypto projects.
Building a Balanced Portfolio
When investing in cryptocurrency, it’s important to build a balanced portfolio to manage risk. This involves properly allocating your assets across different cryptocurrencies and asset classes.
Asset Allocation
Decide what percentage of your overall portfolio you want dedicated to cryptocurrency vs other assets like stocks and bonds. Generally, limiting cryptocurrency to 5-10% of your total portfolio is recommended for diversification purposes.
Within your crypto allocation, diversify across different cryptocurrencies and crypto sectors like platform coins, utility tokens, privacy coins, etc. Many experts recommend keeping Bitcoin as 50-70% of your crypto portfolio due to its position as the most established coin.
Diversification
Diversifying your crypto holdings reduces risk because if one coin underperforms, others may balance it out. Research the top 25-50 cryptocurrencies and invest in a variety spread across sectors, market capitalization, use cases, and geography.
Avoid investing in too many small cap cryptos which can be volatile. Stick to more established coins for the bulk of your portfolio.
Managing Risk
Given crypto’s volatility, only invest money you can afford to lose. Set stop losses to protect from major crashes. Rebalance your portfolio over time by taking profits from top gainers and reallocating to laggards.
Combining Crypto with Other Assets
Keep some assets in stocks, bonds, real estate to balance crypto’s volatility. Over the long term, a blended portfolio of crypto and traditional assets may provide an optimal risk/return profile. Monitor your overall asset allocation and rebalance periodically.
Using Crypto Exchanges
Crypto exchanges are online platforms that allow you to buy, sell, and trade cryptocurrencies. When selecting an exchange, it’s important to consider factors like fees, security, payment methods, and supported cryptocurrencies.
Overview of Popular Exchanges
Some of the most widely used crypto exchanges include:
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Coinbase: One of the largest and most beginner-friendly exchanges. Supports a limited number of major cryptocurrencies. Known for its simple interface. Charges higher fees but has solid security practices.
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Binance: The largest exchange by trading volume. Offers an extensive selection of cryptocurrencies and low trading fees. Geared towards more advanced traders but has a basic interface as well.
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Kraken: A long-standing exchange with high liquidity and a good reputation. Supports many cryptocurrencies and fiat currencies. Offers margin trading. The interface can be complex for beginners.
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Gemini: A regulated US exchange created by the Winklevoss twins. Compliant with regulations, making it a secure choice. Fewer trading pairs but low fees. The mobile app is easy to use.
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KuCoin: Based in Hong Kong. A wide variety of altcoins. Beginner-friendly but also offers advanced trading features. Trading fees are low and the platform is secure.
Fees
Exchanges make money by charging fees on trades. Fees vary but may include:
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Trading fees: Charged per trade as a percentage of the total value. Typically 0.1% to 0.5%.
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Withdrawal fees: For moving assets out of the exchange to a private wallet. Usually fixed amounts depend on the cryptocurrency.
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Deposit fees: Uncommon, but some exchanges charge for deposits via credit card, wire transfer, etc.
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Account fees: Only required on certain exchanges. May include monthly account maintenance fees.
Lower fees are ideal, but it’s also important to consider security practices, liquidity, and ease of use.
Security Practices
As crypto exchanges hold user funds, it’s crucial they have robust security measures including:
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Cold storage: Keeping the majority of funds offline in secure cold wallets. This protects from large-scale hacks.
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2FA/MFA: Requiring two-factor or multi-factor authentication to access accounts. This prevents unauthorized logins.
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Encryption: Using encryption to protect sensitive user data like account information and passwords.
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Insurance: Maintaining insurance policies to cover losses in the event of a breach.
Deposit/Withdrawal Methods
Exchanges allow depositing funds to trade with and withdrawing to external wallets or bank accounts. Common options include:
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Bank transfer: Slow but low fees.
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Debit/credit card: Fast but higher fees.
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Wire transfer: Fast with moderate fees.
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eWallets: Deposit/withdrawal through PayPal, Skrill, Neteller, etc. Convenient but can have higher fees.
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Cryptocurrency: Deposit coins from an external wallet. Usually no fees but slow.
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Stablecoins: Faster and lower fees than cryptocurrencies.
The right option depends on your location, needs, and the specific exchange. It’s good to have multiple methods available.
Securing Your Crypto Assets
Protecting your crypto assets is crucial as www crypticstreet .com are highly targeted by hackers and scammers. Unlike traditional bank accounts, there is no way to recover stolen crypto funds. Here are some tips to keep your crypto investments safe:
Use Offline Storage
One of the most secure ways to store crypto is in offline “cold” storage. This involves keeping your private keys offline on a device not connected to the internet. Options include:
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Paper wallets – Keys printed on paper stored securely in a safe or safety deposit box.
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Hardware wallets – Special encrypted USB devices made specifically for crypto key storage. Leading brands include Trezor and Ledger.
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Offline computers – Keys stored on a computer with no internet connection.
Offline storage reduces attack surface since the keys are not online.
Protect Your Private Keys
Private keys provide access to crypto funds. Protect them like you would cash, credit cards, or precious metals. Never share your keys. Store them in encrypted formats. Use complex passwords. Consider splitting keys into multiple parts via Shamir’s Secret Sharing.
Use Hardware Wallets
Hardware wallets like Trezor and Ledger provide excellent security with encrypted offline key storage and easy transactions via USB connection. However, make sure to buy directly from the supplier, set up your own pin code, and always confirm transactions on the device.
Avoid Crypto Scams
Be wary of scam attempts aiming to steal your keys through phishing attacks, fake exchanges, fraudulent ICOs, airdrops, giveaways and more. Never input your keys on unfamiliar sites. Double-check URLs and domain names. Enable 2FA on exchanges.
Following security best practices is critical for protecting your crypto assets in this emerging technology space. Take precautions to avoid the irreversible loss of your hard-earned cryptocurrency investments.
Tax Implications
www crypticstreet .com Investing can have significant tax implications that should not be overlooked. While the rules are still evolving, here is an overview of how cryptocurrency is currently treated for tax purposes:
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Cryptocurrencies like Bitcoin and Ethereum are treated as property by the IRS, not as currencies. This means any gains or losses from selling or exchanging your cryptos are taxable events.
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If you sell cryptocurrency at a profit, it is subject to capital gains taxes. Short-term capital gains for assets held less than a year are taxed as ordinary income. Long-term capital gains for assets held over a year are generally taxed at lower rates.
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Exchanging one www crypticstreet .com for another is considered a taxable event. You must calculate the fair market value of the coins at the time of exchange to determine if there is a capital gain or loss.
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Mining cryptocurrency is treated as taxable income equal to the fair market value of the coins mined. The income is recognized at the time the reward is received.
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Crypto received from a hard fork or airdrop is subject to tax. The value is considered ordinary income and must be reported.
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Detailed records must be kept of all crypto transactions in order to accurately calculate taxes owed. Third-party services can help with tracking cost basis across exchanges.
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Cryptocurrency must be reported on your tax return. Failure to report can result in penalties and interest from the IRS. Schedule 1, Schedule D, and Form 8949 are used to report capital gains.
Proper reporting of cryptocurrency transactions is important to remain compliant with tax regulations. Consulting a tax professional can help you minimize your tax liability and avoid costly mistakes. The rules around crypto taxes are complex and still being developed, so stay up to date on the latest IRS guidance.
Staying Up to Date
To be a successful crypto investor, it’s crucial to stay up to date on the latest news, analysis, and opinions about the crypto market. The crypto space moves very quickly, with new developments happening daily that can impact prices and trends. Here are some tips for keeping your knowledge sharp:
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Follow crypto news sites and blogs – Some good ones to check are CoinDesk, CoinTelegraph, and Decrypt for reporting on crypto news. Also follow crypto thought leaders on Twitter or YouTube who share insights, like Andreas Antonopoulos and Changpeng Zhao.
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Keep up with crypto podcasts and videos – There are great podcasts like Unchained and Bankless that discuss the latest crypto trends. YouTube channels like Coin Bureau, Crypto Casey, and Altcoin Daily provide news and analysis.
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Understand market cycles – Crypto markets are cyclical and move between periods of bullish and bearish sentiment. Zoom out to get the bigger picture of long-term price trends amidst short-term volatility. Learn to spot changing market cycles.
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Join crypto communities – Discussing crypto with other investors can help you gather different perspectives. Reddit forums like r/cryptocurrency have active discussions. Also connect with crypto groups on Facebook, Discord, or Telegram.
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Read expert analysis – Follow what thought leaders in the crypto industry are observing about the markets. Their insights can help you make sense of price movements and spot opportunities.
Staying continually informed will help you make smarter investment decisions and time the markets better for buying and selling. An hour a day focused on crypto news and analysis is time well invested for any serious crypto investor.
The Future of Crypto Investing
The future of cryptocurrency investing looks promising yet uncertain. While cryptocurrencies have exploded in popularity in recent years, they are still not widely used or accepted as mainstream forms of payment and investment. However, many experts predict broader mainstream adoption in the coming years.
Mainstream Adoption Predictions
www crypticstreet .com like Bitcoin and Ethereum were initially niche interests, but they are now becoming more mainstream. A 2021 survey by Pew Research found that 16% of Americans have invested in, traded, or used cryptocurrencies. As more major companies and financial institutions embrace crypto, such as Tesla investing in Bitcoin and PayPal allowing users to buy and sell crypto, average investors are likely to increase adoption as well. Mainstream use of cryptocurrencies for payments and financial transactions is predicted to steadily rise.
Increased Regulation
As www crypticstreet .com grows, governments are increasingly examining how to regulate them. Rules and oversight from bodies like the SEC in the U.S. can help legitimize cryptocurrencies. But increased regulation also creates uncertainty regarding how cryptocurrencies will be categorized and restricted. While regulation may provide more protection and security for average investors, it could also limit the scope of how cryptocurrencies can be used. The extent and impact of future government regulation is still unknown.
Outlook for Major Cryptocurrencies
The prices of major cryptocurrencies like Bitcoin and Ethereum saw wild swings in 2021, reaching record-high prices followed by significant declines. However, most experts don’t see cryptocurrencies disappearing anytime soon. The long-term outlook remains positive, with cryptocurrency prices forecasted to increase again in the coming years. But experts warn investors should still be cautious and avoid investing more than they can afford to lose. The high volatility of the crypto market looks likely to continue. While the future is uncertain, cryptocurrencies appear poised to remain a potentially lucrative investment option.
