Cryptocurrency investment is becoming a worldwide trend, and tech-savvy Canadians are not being left behind. Most Canadians use these coins as high-risk investments to trade them at exchange wallets.
Cryptos are also widely used in online gaming, with Blockchain-based games now becoming more popular than ever. Even Canadian casinos have joined this trend. These gaming sites now process lightning-fast deposits and withdrawals in dozens of digital coins.
However, don’t let the crypto hype lead you to invest without performing due diligence. The world of crypto investment can be volatile and unpredictable, leading to unexpected losses. This guide prepares you well by sharing a few tips for investing in cryptos successfully.
Tip #1: Learn the Crypto Landscape
It’s essential to familiarize yourself with the crypto landscape before investing. Start by learning about the legality of investing in these coins to avoid getting yourself into trouble with the authorities. Thankfully, investing in cryptos in Canada is permitted, although these coins are not legal tender like fiat currencies. No one will come knocking if you invest in cryptos.
You can also learn more about the Canadian crypto landscape in these ways:
- Following crypto news outlets like CoinDesk and Decrypt.
- Joining crypto groups and forums on Reddit, Skype, Discord, and other apps.
- Asking friends and family members about the market.
- Watching and following popular crypto channels on YouTube.
- Follow crypto Twitter influencers like Elon Musk and Vitalik Buterin.
Tip #2: Have a Budget for Investing in Cryptos
This point is for all those who want to start trading cryptos. Cryptocurrency is still a relatively new technology, with the first Bitcoin mined in January 2009. This means digital assets can be highly volatile, quickly losing or gaining significant value. Even minor industry speculation can cause values to tumble within hours.
So, to protect yourself against unexpected volatility, the first principle should be to have a specific budget for trading cryptos. Of course, this should be money you can willingly live without if the worst happens. Anjali Jariwala, a crypto expert, recently told CNBC that you shouldn’t invest more than 3% of your portfolio. However, some experts think that 5% is the sweet spot.
Tip #3: Invest in Major Cryptocurrencies
Research published by Exploding Topics shows that more than 13,000 cryptocurrencies are in circulation. The study adds that more than 18,000 businesses accept crypto payments from the 420+ million investors worldwide. This research shows the massive growth potential of these coins, with the industry expected to hit the $4.9 billion mark in 2030.
However, some digital coins are inactive or simply valueless. The world currently only has 8,985 active cryptos. Therefore, a wise investment is to choose established assets like Bitcoin, Ethereum, and USDT. These currencies move quickly due to their large market capitalization. In addition, major coins are better at navigating significant market downturns than newer, smaller-cap assets.
Tip #4: Security is Key
Crypto theft and cyber-attacks are significant security challenges in this budding industry. A Chain Analysis report reveals that $3.7 billion worth of cryptos were stolen in 2022. Thankfully, this number decreased by a massive 54.3% ($1.7) billion in 2023. Still, that’s a considerable sum that should worry any serious crypto investor.
You can enjoy the crypto benefits in CA while staying secure. First, only invest your coins in a reliable crypto exchange. Get recommendations from friends and family members who have crypto experience. Also, use a hardware wallet where possible. Unlike online software wallets, hardware wallets don’t expose your coins to online attacks. They are also easier to back up and restore.
Other security tips for beginners include:
- Don’t trade your cryptos on websites without encryption technology.
- Don’t share your wallet password or security code with anyone.
- Avoid clicking unknown email or SMS links.
- Withdraw your digital assets from the wallet as soon as possible.
- Don’t tell everyone that you’re investing in cryptocurrencies.
Tip #5: Leverage AI Technology
The AI technology is here to make your crypto trading a breeze. Therefore, take full advantage of this technology. Today, crypto traders can use AI-powered bots to significantly boost their trading speed and efficiency. These bots can quickly analyze extensive market data and promptly modify your strategies in real-time. They also use historical trends to fine-tune future executions.
Another reason beginners should consider AI trading bots is to mitigate emotional biases. These bots make decisions based only on historical data, allowing you to approach your trading more objectively. They can also execute trades 24/7 while you’re engaged with other activities. What’s more, their performance can improve progressively over time.
After reading this guide, you should be ready to dive into crypto trading. The key to trading in cryptos is to make data-backed decisions and learn from mistakes. It’s also vital to leave out human emotions while trading digital assets. Remember, even the slightest trading mistake could be costly. So, do thorough research and arm yourself with a trading bot.
