The appreciation of cryptocurrencies in 2020 made investors interested in assets. Bitcoin , the best known digital currency, guaranteed accumulated gains in 12 months above 340%, which encouraged a lot of people and made companies listed on the stock exchange start buying it.
The largest Brazilian cryptocurrency exchange, Mercado Bitcoin, reported an almost ninefold increase in its financial volume in the first quarter of 2021 alone. However, many people are still afraid to bet on operations with digital assets.
Thinking about it, we prepared this article for those who are looking to know if it is possible to make a safe investment in cryptocurrency. Check out the topics we will cover:
- What are cryptocurrencies
- What are the main cryptocurrencies in the market
- How to avoid the risks of investing in digital currencies
- What are the main ways to invest in crypto assets
- How to make a safe investment in cryptocurrency
What are cryptocurrencies
For those who don’t know yet, cryptocurrencies are digital and encrypted currencies, non-divisible, unique and transferable. Through them, it is possible to make financial transactions over the internet without the need for physical money. They are considered by the IRS as an asset.
Transactions made through cryptocurrencies are encrypted and have an electronic signature, identifying the amount, sender and recipient anonymously. Thus, its biggest differential is to protect the data of its users.
In addition, those who use crypto assets do not use their personal data, such as name, email and password, in a transaction. Identification is done through an address made up of random letters and numbers that are usually accompanied by a scannable QR code. Thus, before making the transfer, the investor must have funds in his portfolio.
All transactions made with cryptocurrencies are recorded in a digital system called blockchain, which does not allow the alteration or deletion of stored data. This is what ensures the security and transparency of operations.
The main cryptocurrencies on the market
Discover the cryptocurrencies with the highest market capitalization:
Bitcoin (BTC)
With a high market cap, which is currently around $39,000, bitcoin is a pre-programmed asset. This means that its characteristics cannot be modified and that there is a limit to its issuance: up to 21 million coins.
So far, 18.6 million BTC have been issued. What a lot of people don’t know is that they can be bought in fractions.
Ethereum (ETH)
The second largest asset in the cryptocurrency market, ETH is an Ethereum network token that is used to pay processing fees for that system. Due to the great usability in its own network, some say that ETH cannot be used as money.
Binance Coin (BNB)
In 2021, BNB became the third largest asset by market capitalization. It is a Binance ecosystem token, with access to numerous features of the eponymous exchange.
Tether (USDT)
Paired with the value of the US dollar, Tether is a stable value crypto asset (stablecoin). It is issued by the Tether company, which has often failed to prove its dollar reserves. Therefore, USDT generates some distrust from investors.
XRP (XRP)
Native to the XRP Ledger, XRP is a crypto asset known in the market as ripple. This is because the digital currency is the creation of the company Ripple Labs, which is currently facing lawsuits alleging irregularities in the sale of the token.
In addition to the assets mentioned above, we also list other important digital currencies such as:
- Cardano (ADA);
- Dogecoin (DOGE);
- Polkadot (DOT);
- Uniswap (UNI);
- Litecoin (LTC).
How to avoid the risks of investing in digital currencies?
While cryptocurrencies may seem like an easy-to-profit investment opportunity, experts warn that caution is warranted. It is recommended not to allocate more than 5% of the portfolio to assets.
As cryptoassets are volatile, it is worth investing in a varied portfolio, as this reduces the risks of a big fall. However, the golden rule is: research a lot and know the market and the asset. This includes researching the reputation of companies and learning how to store coins to avoid hacker attacks.
Anyone who intends to trade in the P2P modality, between individuals, must be very careful not to become the target of scammers who use fake profiles. Thus, it is important to look for renowned vendors with references.
What are the main ways to invest in crypto assets?
There are five safe ways to invest in crypto assets. Discover the following options:
Exchange
The exchange is a good option for those looking for variety and practicality: there are several options for cryptoassets and the user only needs a cell phone and his ID to start acquiring bitcoins through applications. However, to transfer them it is necessary to pay a fee.
Trust fund
One of the least risky ways to invest is through cryptocurrency funds . This is because, according to the Securities and Exchange Commission (CMV) rule, ordinary investors can only access funds that allocate up to 20% in crypto assets. However, the possibilities of earnings are also smaller.
Index fund (ETF) on the stock exchange
In 2021, the Brazilian stock exchange listed the first crypto asset ETF in Latin America, the HASH11. With approximately 60,000 shareholders, it is already one of B3’s largest variable income ETFs.
The asset has the same advantages as an investment fund, such as safe custody, and has low-value quotas, such as R$50. However, it is not yet available to anyone.
Peer-to-peer (P2P)
As we mentioned in the previous topic, P2P is a negotiation made directly between two individuals, without the mediation of companies. The big advantage is that there is no purchase order, speeding up the receipt of cryptocurrencies.
Decentralized exchanges (DEX)
DEX are autonomous systems, which offer a large offer of crypto assets for investment and use contracts to intermediate negotiations. However, this modality is quite vulnerable and the DEXs can be easily hacked, or even set up in a coup.
How to make a safe investment in cryptocurrency
Below we have prepared some tips for you to make a safe investment in cryptocurrency:
If you are not going to trade your asset, it is recommended not to leave it at the brokerage house. That’s because they are often targeted by hackers and you can lose your funds. The safest thing is to distribute your coins on different platforms and devices or in your own crypto wallet app.
As we are talking about a long-term investment, the best investor can do to protect their cryptocurrencies is to create a security account with a hardware-wallet, a device similar to a pendrive. Only use the broker when trading.
When using a brokerage, the ideal is to place the money in known exchanges, with a large number of customers and more time in the market. In Brazil, the best options are:
- Ripio;
- Bitcoin market;
- Foxbit;
- BitPrice;
- BitcoinTrade.
It is worth mentioning that the investor must not share his private keys and passwords with anyone, at risk of losing his funds permanently.
Conclusion
Although they still generate distrust, cryptoassets are increasingly showing that they can be interesting investment options, especially for those looking for more autonomy and looking for lower rates.
31 responses to “Is safe investment in cryptocurrency possible?”
Is it really possible to make a safe investment in cryptocurrency? With all the risks and volatility, I’m still skeptical. Can you provide some solid strategies to minimize the risks?
Dear cryptoInvestor78, I understand your skepticism about making a safe investment in cryptocurrency due to the risks and volatility involved. However, there are strategies that can help minimize these risks. Firstly, it’s important to conduct thorough research and stay informed about the market trends. Secondly, diversifying your investment portfolio across different cryptocurrencies can help spread the risks. Additionally, setting realistic goals and investing only what you can afford to lose is a crucial aspect of risk management. Lastly, considering the use of stop-loss orders and implementing proper security measures for your digital assets can provide added protection. Remember, knowledge and caution are key to a safer investment.
Investing in cryptocurrency can be risky, but with a cautious approach, it is possible to make safe investments. It is important to do thorough research, diversify your portfolio, and keep an eye on market trends. Remember, knowledge and patience are key in this volatile market!
Is it really possible to make a safe investment in cryptocurrency? With all the risks involved, I’m hesitant to dive in. Can you provide some tips or strategies to mitigate those risks?
Hey Marie_LovesCrypto, I understand your hesitation when it comes to investing in cryptocurrencies. While there are risks involved, there are also strategies you can use to mitigate those risks. Here are a few tips:
1. Do thorough research: Before investing, make sure to educate yourself about the cryptocurrency you are interested in. Understand its technology, history, and potential for growth.
2. Diversify your investments: Instead of putting all your money into one cryptocurrency, consider spreading your investments across multiple assets. This can help reduce your exposure to any single investment.
3. Consider long-term investment: Cryptocurrencies can be volatile in the short term, but many have shown significant growth over the long term. Investing with a long-term mindset can help you ride out the market fluctuations.
4. Use secure platforms: Select a reputable cryptocurrency exchange or trading platform that has strong security measures in place. Look for platforms with features like two-factor authentication and cold storage for your assets.
5. Set clear goals and limits: Determine your investment goals and set realistic expectations. Additionally, set limits for the amount of money you are willing to invest and the potential losses you are prepared to accept.
Remember, no investment is completely risk-free, but by following these tips, you can minimize the risks associated with cryptocurrency investments. Good luck!
I believe that making a safe investment in cryptocurrency is definitely possible. With proper research, understanding the market trends, and selecting reliable platforms, one can mitigate the risks associated with this asset class. It’s important to stay informed and make informed decisions to ensure a secure investment journey in the world of cryptocurrencies.
I have been investing in cryptocurrency for the past few years and I can confidently say that it is possible to make safe investments. However, it requires thorough research and understanding of the market trends. It’s important to diversify your portfolio and not put all your eggs in one basket. Keep track of the news and stay updated with the latest developments in the crypto world. With the right knowledge and cautious approach, cryptocurrency can be a profitable investment option.
Is it really possible to make a safe investment in cryptocurrency? With all the risks involved, I’m not sure if it’s worth it.
Hi cryptoqueen! Making a safe investment in cryptocurrency is indeed possible. While there are risks involved, with proper research, risk management strategies, and adherence to security measures, investing in cryptocurrencies can be rewarding. It’s important to stay updated on market trends, diversify your portfolio, and choose reputable exchanges. Remember, every investment carries some level of risk, but with caution and knowledge, you can navigate the crypto market successfully.
I’ve been investing in cryptocurrencies for a few years now, and I believe it is possible to make safe investments. However, it requires thorough research and understanding of the market. Don’t put all your eggs in one basket and diversify your portfolio. Stay updated with the latest news and trends in the cryptocurrency world. Happy investing!
Investing in cryptocurrency is absolutely worth it! Bitcoin has already proven its potential for high returns, and with proper research and risk management, it is possible to make safe investments in cryptocurrencies. Don’t let fear hold you back from exploring this exciting market!
Cryptocurrencies have shown incredible growth in recent years. It’s definitely possible to make a safe investment in cryptocurrency if you do your research and choose reputable platforms. Just be cautious and stay updated on market trends.
I have been investing in cryptocurrencies for several years now and I can say that it is possible to make safe investments. However, it requires thorough research, understanding of the market, and proper risk management. It is important to choose reputable exchanges and invest in well-established cryptocurrencies. With the right knowledge and caution, cryptocurrency investments can be lucrative.
Is it really possible to make a safe investment in cryptocurrency? With all the risks involved, I’m still not sure if it’s worth it.
Hi Lara31, I understand your concerns about the risks involved in cryptocurrency investments. While it is true that investing in digital assets comes with risks, it is definitely possible to make a safe investment in cryptocurrency. Like any investment, it requires careful research, knowledge, and risk management. By diversifying your portfolio, staying updated with market trends, and choosing reputable exchanges, you can mitigate the risks and increase your chances of a successful investment. Keep in mind that no investment is completely risk-free, but with the right approach, cryptocurrency can be a profitable venture. Good luck!
I believe that making a safe investment in cryptocurrency is possible. The increasing interest and financial volume in cryptocurrencies show their potential. However, it is crucial to thoroughly research and understand the risks involved before investing.
Is it really possible to make a safe investment in cryptocurrency? With all the risks involved, what are the measures that can be taken to ensure the security of our investments?
Absolutely, making a safe investment in cryptocurrency is possible. While there are risks involved, there are measures that can be taken to ensure the security of our investments. One important step is to choose a reputable cryptocurrency exchange with strong security protocols and a track record of protecting user funds. It’s also crucial to properly research and understand the specific cryptocurrency you intend to invest in, including its technology, team, and market trends. Implementing strategies like diversification and setting stop-loss orders can help mitigate risks. Additionally, storing your digital assets in a secure offline wallet, also known as “cold storage,” can provide an extra layer of protection against hacking attempts. By being proactive and staying informed, it is possible to navigate the cryptocurrency market safely.
I believe that making a safe investment in cryptocurrency is definitely possible. However, it requires careful research, understanding of the market, and risk management. Just like any other investment, there are risks involved, but with the right knowledge and strategy, one can mitigate those risks and potentially earn significant profits. It’s important to stay updated with the latest news and developments in the crypto industry and choose reliable and reputable platforms for trading. With proper caution and diligence, cryptocurrency can be a lucrative investment option.
Investing in cryptocurrency can be risky, but with proper research and strategic planning, it is definitely possible to make safe and profitable investments. It’s important to stay updated on market trends, choose reliable platforms, and diversify your portfolio. Remember, always invest what you can afford to lose.
Is it really possible to make a safe investment in cryptocurrency? With all the volatility and risks involved, I’m not sure if it’s worth it. Can you provide any tips or strategies to minimize the risks?
Yes, it is indeed possible to make a safe investment in cryptocurrency. While there are risks and volatility, there are strategies you can implement to minimize them. Here are a few tips:
1. Do thorough research: Before investing, make sure to research the cryptocurrency you’re interested in. Look into its technology, team, and community to get a better understanding of its potential.
2. Diversify your portfolio: Spread your investments across different cryptocurrencies. This helps to minimize the impact of any potential losses.
3. Set a budget: Determine how much you are willing to invest and stick to it. This way, you won’t be tempted to invest more than you can afford to lose.
4. Follow trusted sources: Stay updated with news and developments in the cryptocurrency market. Follow reputable sources for information and analysis.
5. Use secure wallets: Ensure that your cryptocurrency is stored in secure wallets that offer robust security features.
Remember, investing in cryptocurrency carries risks, but with careful planning and research, you can make it a safer investment. Good luck!
Investing in cryptocurrencies can definitely be a safe option if you do your research and choose the right ones. With proper risk management and understanding of the market, you can minimize the risks and maximize your profits. It’s all about being informed and staying updated with the trends. Good luck!
Is it really possible to make a safe investment in cryptocurrency? With all the concerns about security and volatility, I’m not sure if it’s worth the risk. Can you provide more insights on this topic?
Investing in cryptocurrency can indeed be a safe option if proper precautions are taken. While concerns about security and volatility are valid, there are ways to mitigate these risks. One important step is to choose a reputable cryptocurrency exchange that follows strict security protocols. Additionally, diversifying your investment portfolio can help minimize the impact of volatility. It’s also crucial to stay informed about the latest market trends and do thorough research before investing. By being cautious and well-informed, you can make a safe investment in cryptocurrency and potentially reap significant gains.
Investing in cryptocurrency can be risky, but with proper research and understanding of the market, it is possible to make safe investments. The key is to diversify your portfolio, stay updated on the latest news and trends, and only invest what you can afford to lose. Remember, no investment is completely risk-free, but the potential for high returns is definitely there in the crypto space.
Is it really possible to make a safe investment in cryptocurrency considering the volatility of the market?
Yes, it is possible to make a safe investment in cryptocurrency by diversifying your portfolio, conducting thorough research, and staying updated on market trends. While the market is indeed volatile, by following these strategies, investors can mitigate risks and potentially achieve profitable returns in the long term.
Investing in cryptocurrency can be a lucrative opportunity, but it’s crucial to do thorough research and understand the risks involved. Diversifying your investment portfolio and staying informed about market fluctuations are key strategies for making a safe investment in digital assets.
Investing in cryptocurrency can be a risky endeavor, but with thorough research and caution, it is possible to make safe investments in digital assets. Education and staying updated on market trends are key to navigating the volatile world of cryptocurrencies.
As a seasoned investor myself, I believe that safe investment in cryptocurrency is indeed possible if done strategically. Diversifying your portfolio to minimize risks, staying informed about market trends, and choosing reputable exchanges are key factors to consider. While the volatility may be intimidating, with proper research and caution, one can navigate the crypto market successfully.