As the world becomes increasingly digital, investors are looking for ways to cash in on the trend. Cryptocurrency is one of the hottest investments on the market, and for good reason. If you live in Canada, it’s possible to get on the rewards with the best possible option just by searching “best crypto exchange Canada” so you can start building your digital assets with the utmost security. Services that you’ll find from that click will also help you learn how to invest and what you should know. Keep reading to learn more about the rewards of investing in crypto.
What is crypto anyway?
Crypto is a digital or virtual currency that uses cryptography to secure its transactions and control the creation of new units. Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control. Bitcoin, the first and most well-known cryptocurrency, was created in 2009.
Since its inception, Bitcoin has been incredibly volatile, with prices ranging from pennies to over $1,000 per coin. However, as more people have become interested in crypto, the value of Bitcoin and other currencies has increased. In 2017, the total value of all cryptocurrencies reached nearly $100 billion. Since Bitcoin’s inception, many coins have grown in popularity over the years, and you can trade cryptocurrency with little limit.
You can store crypto coins in several ways.
A big benefit of cryptocurrency is that you can store it digitally and have continued access to it from anywhere, at any time, with little to no issue. There are a few different options that you can choose from so you can transition your CAD from your bank account or credit card into eth or bitcoin.
Here are the types of wallets out there:
- Hot Wallet: This is a digital wallet that is connected to the internet. It is easy to use but is not as safe as other methods because it is vulnerable to hacking.
- Hardware Wallet: This type of wallet stores your crypto offline on a physical device, such as a USB drive or a hard drive. This makes it very secure, but it can be difficult to use.
- Paper Wallet: A paper wallet is simply a piece of paper that contains your public and private keys. It is very secure but can be difficult to use.
- Cloud Storage: Cloud storage allows you to store your crypto online using a third-party service provider. This option is convenient but can be less secure than other methods.
Knowing the pros and cons of each wallet is essential when picking the best one for you and getting all of the benefits, especially if you’re in a Canadian exchange or a United States cryptocurrency exchange, or any other jurisdiction. That’s the benefit of cryptocurrency exchange, too; you can switch options with relative ease so you can find the best wallet for you and your needs.
What are the benefits of using cryptocurrency?
The reward of using cryptocurrencies is that the benefits are many. The digital currency has many perks, which makes them more appealing.
They’re secure: Cryptocurrencies use advanced cryptography techniques to ensure the security of transactions and prevent fraud.
They’re global: Cryptocurrencies can be used anywhere in the world without restrictions.
They’re anonymous: Transactions made with cryptocurrencies are generally anonymous, which makes them ideal for privacy-sensitive activities like online gambling or buying illegal goods.
They’re fast: Transactions using cryptocurrencies are processed quickly compared to traditional methods like bank transfers. There may be a small trading fee, but the ability to use your crypto whenever you want it at such a fast pace is hard to pass up.
They diversify your portfolio: Cryptocurrencies can help reduce overall portfolio risk because they are not correlated with traditional asset classes. Most cryptocurrencies are highly liquid and can be converted into other currencies quickly and easily.
They’re low cost: Cryptocurrency transactions are typically much cheaper than those made with traditional currencies. Your CAD can become a crypto asset without using all of your fiat money/government-issued money so you can pay for goods and services traditionally without the volatility of the crypto world. And with being low cost, cryptocurrencies have provided high returns over the past several years, outperforming traditional assets such as stocks and bonds.
What are some common mistakes made by cryptocurrency investors?
Cryptocurrency investments are still in their early stages, which can lead to several mistakes being made by investors. One of the biggest mistakes is investing in a cryptocurrency without understanding how it works. Another common mistake is investing based on emotions rather than logic. For example, many people invest in Bitcoin because they think its price will continue to go up, regardless of whether it has real-world use cases.
Additionally, some investors blindly follow the advice of others instead of doing their own research. This can lead to investing in fraudulent or overvalued cryptocurrencies. Finally, many people do not consider the risks associated with cryptocurrency investment and end up losing money when prices fall. Ultimately, doing your research yourself and reading articles like this to get your jumping-off point before you invest is always a fair shake.
The rewards of investing in cryptocurrency are generally positive. Cryptocurrencies are becoming more popular and more valuable and offer several advantages over traditional currency. Additionally, the risks associated with investing in cryptocurrency are relatively low. For these reasons, investing in cryptocurrency is a wise decision once you’ve done your research to see if it’s truly right for you.