Should I join the euphoria of investing in Bitcoin?
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(CNN Spanish) -
El Salvador became the first country to establish by law Bitcoin as an exchange and forced currency currency.
The cryptocurrency suffers ups and downs every time Elon Musk, CEO of Tesla, makes a comment, events that have caused the conversation around this and other cryptocurrencies to be more and more frequent, but how much do we understand about cryptocurrencies?
According to a Harris Poll survey of 1,984 people between February 12 and 14, 2021 - which was shared with Bloomberg - 61% of those interviewed who indicated they had heard of cryptocurrencies said they had little or no understanding of cryptocurrencies. its operation.
Only 14% of those interviewed said they understand "very well" how they work.
If you belong to the percentage of people who are not experts in cryptocurrencies, but you are interested in exploring the idea of investing in bitcoin and other cryptocurrencies such as ethereum, cardano or dogecoin, then we will tell you how to do it.
The World Bank says it will not help El Salvador implement the bitcoin law
But before making a decision you should know that, unlike other assets, such as gold, bitcoin and other cryptocurrencies have no other purpose than to be an asset.
"So if everyone decides one day that bitcoin isn't worth much anymore, then in fact, it won't be worth much," explained Eric Maskin, winner of the Nobel Prize in Economics, to CNN, who called cryptocurrency investing a game of money. random.
It is for this reason that cryptocurrencies are very sensitive to the economic policies that some countries may take or to the statements of important investors, such as Elon Musk.
Cryptocurrencies: why is their price so volatile?
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Security risks
Unlike other currencies, such as the dollar, cryptocurrencies are not backed by any government, so if cryptocurrencies are stored with a third-party company and it closes or is hacked, the government has no obligation to intervene or help them. affected to get their money back.
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And while investing in cryptocurrencies carries risk, there are risks that can be avoided, such as scams.
The U.S. Federal Trade Commission (FTC) reported that scammers have profited from the cryptocurrency boom and from October 2020 to March 2021, around 7,000 people reported losing more than $ 80 million in scams.
Many people reported being lured to fake websites with the idea of investing or mining cryptocurrencies.
There are also "gift scams" supposedly sponsored by celebrities, and scammers have even used online dating sites to mislead people.
The FTC indicates that if someone offers guaranteed money, great returns, free money, or claims without details or explanations, it is very likely that it is a scam.
Bitcoin, dogecoin, ethereum or cardano
“There is more to the cryptocurrency market than bitcoin.
Just like there is more to the stock market than Apple, "said Denis Vinokourov, head of research at digital asset platform Bequant.
But with more than 4,000 cryptocurrencies in circulation, according to the data site Statista, finding the ideal cryptocurrency to invest is not a simple decision.
Although bitcoin remains the highest value cryptocurrency, there are other interesting options such as ethereum, thether, binance coin, cardano, dogecoin and XRP.
Differences between cryptocurrencies: bitcoin, dogecoin, ethereum and binance coin
For Greg King, CEO of Osprey Funds, a company that invests in digital currencies - as well as other bitcoin experts - the bet is on investing beyond bitcoin.
"It makes sense for investors to have a long-term portfolio of bitcoins and ethereums and own a basket of some of the others (cryptocurrencies) to trade," King said.
Investing, whether in bitcoin or any other asset, should be an informed decision and ideally should be based on your risk profile, which is the level of tolerance you have for potential losses of money.
Basically, don't invest more than you are willing to lose.
Platforms for the exchange of cryptocurrencies
By mid-June, a bitcoin coin was worth roughly $ 38,000, which could be above your investment plans, but to invest in bitcoin - and most other cryptocurrencies - you don't need to buy the coin. completely, since you can acquire half or even a small fraction of it.
Once we make that point clear, the next thing is to choose the platform on which you will make the purchase.
According to Investopedia, the three highest rated platforms for buying and selling cryptocurrencies are Coinbase and Coinbase Pro, the CashApp app, and Binance.
However, these are not the only platforms available as the list is long.
Below we show you how the purchase process is on the three aforementioned platforms.
Coinbase
Create an account and verify it.
Add a payment method, such as a bank account, PayPal, debit card, or bank transfers.
Click Buy / Sell.
Choose the asset, such as bitcoin, ethereum, tether, cardano, dogecoin, among others.
Click Buy Now.
CashApp
Create an account and verify it.
Click on the Invest tab.
Click on Bitcoin.
Select the amount you want to invest, whether it is US $ 1, US $ 10, US $ 50 or more.
Confirm your PIN and click Confirm.
Binance
Create an account and verify it.
Click Buy Crypto
Choose the asset, such as bitcoin, ethereum, Pax Gold, Harmony, Ochid, among others.
Enter the amount you want to invest.
Click Buy.
Choose an electronic wallet
Once the exchange platform has been chosen, the next thing is to think of an electronic wallet or wallet to safely store your cryptocurrencies.
Although when buying a digital currency you can leave the "keys" of your coins within the exchange platform, you can also move them to an electronic wallet, such as: Bitcoin Wallet, Blockchain Wallet, Exodus, Electrum or Mycelium.
An electronic wallet will store your private key, which is like the PIN you use to enter your bank account, and your public key, which is similar to your account number.
Bottom line: Do you need the e-wallet?
No. However, if you have a large amount of bitcoins and other cryptocurrencies it is something you should consider.
Paul R. La Monica contributed to this report.
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