How can I become a big investor in cryptocurrency?

One of the most common questions I hear regarding cryptocurrencies, such as Bitcoin and Ethereum, is how someone can become a big investor in cryptocurrency and start earning huge profits right away.

This is actually very easy to do if you have the right information and know what steps to take. Here are five ways that you can start earning big profits in cryptocurrencies and become one of the top investors.

These five steps will help you earn millions of dollars from cryptocurrencies over time, but it all starts with your initial investment and choosing the right cryptocurrency to invest in.

Decide on how much you are willing to invest

Before you buy your first coins, take some time to decide how much you are willing to invest. This is important as you will have to choose between all-in or Dollar Cost Averaging (DCA).

All-in means that you invest an amount of money at one time, and DCA allows you to spread out your investment into small amounts over time. To figure out what strategy is best for you, consider your tolerance for risk and how long until you want to see results.

If you aren’t planning on holding for more than a few months, then all-in investing could be better because it allows for fast growth with high profits.

Start out small and practice trading

Any investing, whether it's stocks or crypto, starts with practice. Get your feet wet by signing up for a free online trading account and start with small amounts of money. You'll gain experience before you risk large sums of cash that you might lose if you don't have enough experience.

It's easy to lose everything when trading cryptocurrencies because they're so volatile, but if you're willing to take on that risk while you learn more about trading cryptocurrencies, it could be worth it. Practice makes perfect!

Set goals for your portfolio

Your investment strategy should include more than just buy low, and sell high. Your financial goals dictate how you need to invest and what strategies work best for you.

For example, if you're saving up for your first home, you'll want to set aside money that's easy to access while keeping other funds invested so they have time to grow. If you're saving for retirement, on the other hand, your focus should be on long-term growth over short-term gains.

The same goes for college savings or setting up an inheritance fund—each requires different tools and strategies depending on your long-term goals.

Don’t get greedy!

Investing your money with zero percent risk is not an option. The goal of every investor should be to maximize profits while minimizing potential losses.

While I don’t think it’s wise to use large amounts of money that you can’t afford to lose, never invest more than you are willing to part with if your investment tanks.

A lot of people get greedier when their investment starts making them money and end up losing everything when they push their luck just one time too many. Don’t get greedy and you will never have to watch yourself lose it all!

Finding the right exchanges and accounts

If you’re new to cryptocurrencies, one of your most pressing questions will be how and where to buy them.

We recommend using Coinbase as a digital wallet because it’s incredibly easy to use, allows you to invest in Bitcoin and Litecoin through bank transfer or credit card, and they will also store your coins for you.

For larger purchases of Bitcoin, we recommend Gemini. Once you have bought Bitcoin or other cryptocurrencies from an exchange like Coinbase or Gemini it is highly recommended that you move them into your own personal wallet.

It is not safe to keep large amounts of cryptocurrency on exchanges that are subject to hacking attacks and security issues that put your funds at risk.

Getting started with bitcoin trading

Start by getting to know how bitcoin works. Bitcoin is an entirely virtual currency that doesn’t require any physical coins or bills. Instead, it uses something called blockchain technology—which acts as a public ledger for all transactions involving bitcoin.

The ledger isn’t owned by anyone and is instead maintained by thousands of computers at once, which prevents forgery and hacking attempts.

If you want to own some bitcoins, all you need to do is set up an account with one of many third-party companies that work with bitcoin and start buying or selling your bitcoins through them.

Understanding market news, events, and trends

Start with podcasts or online resources that focus on market trends and news. You’ll have to learn how to separate good information from bad, but it’s better to dive into too much than not enough. The more informed you are, the better your decision-making will be.

One of my favorite podcasts is This Week in Startups. (Fun fact: My co-founder Adam was interviewed for TWiST!) Another great podcast is Unchained, hosted by Laura Shin.

There are also tons of great blogs out there that keep you up-to-date on market news and trends, including Coindesk, Coin Telegraph, and Investopedia.

Buy low, sell high

Investing is about risk and opportunity. There are huge advantages to investing early on, and there are huge risks associated with investing too late. You’re giving up a lot of opportunities by waiting and that should be reflected in your expectations of return on investment.

The bottom line is that if you want to invest at any level and have no idea where to start or how to look for ways to take that first step.

Sure it might cost some money now but long term, it will be worth every penny you spend to get started. The best time to invest is always right now, even if there’s nothing but ambiguity around what you’re buying into today.

Conclusion

Investing is about research and about diversification. If you don’t understand how something works or how to evaluate it properly, then steer clear of it until you do.

You could make money from investing in cryptocurrencies—but if you do so without understanding what makes them valuable, then you’re likely to lose everything. For example, if everyone stopped using fiat currency tomorrow, would Bitcoin remain valuable?

It might for a brief period before plummeting down to zero value—or perhaps people would start using Bitcoin as currency instead. The important point is that it’s not enough to just understand what something is; we must also understand why its value exists.

Without that knowledge, any investment becomes potentially catastrophic because we lack the direction or purpose behind our decisions.