Investing In Crypto

3 January 2023
 Categories: , Blog


There has been a tremendous surge of interest from individuals in the investment opportunities that cryptocurrencies can represent. However, these individuals may not always know where to begin or how to proceed with these investments. 

Set Limits On The Amount Of Your Portfolio That You Dedicate To Crypto Holdings

Whenever you are preparing to make investment decisions, a risk calculator should be done so that you can properly balance your portfolio of holdings. One step in this process can be setting a maximum percentage of your portfolio that you are willing to dedicate to the type of asset. This can be especially important for volatile assets, such as cryptocurrencies, as individuals will often want to balance the volatility of these assets with other more stable options. By setting an overall limit on the amount that you are going to dedicate to investing in crypto, you can more efficiently allocate this portion of your portfolio among the various crypto investment opportunities that you find to be promising.

Assess The Fees That The Broker Or Service Will Charge

Understanding the fees that the broker or other service that you use to buy or sell the crypto will be something that you should give considerable attention to as it can directly impact the profitability of your trades. Many of these services will provide a sliding scale of fees that are based on the number of trades that a client makes. For someone that is expecting to make a high volume of trades, choosing a broker or exchange with good discounts on trading fees can result in substantial savings.

Minimize The Amount Of Crypto That You Leave On Trading Platforms Or Exchanges

A common mistake that individuals that are new to investing in crypto can be leaving their coins on the exchange or trading platform. This can leave a person vulnerable to these assets being difficult to recover in the event of hacking, exchange failure, and other serious security concerns. A safer option can be to transfer these coins to a cold storage solution. This can be done by investing in a cold storage wallet that will allow you to actually store the cryptocurrencies offline. This can be the safest option for a person that is wanting to protect these valuable assets from being lost due to theft or other unfortunate events. As part of the process of setting up a cold storage solution, you will need to create a passphrase, and you should take aggressive steps to keep this passphrase safe and secure.

To learn more about crypto investments, reach out to a financial planner near you.