When it comes to making money on cryptocurrency, the first thing that comes to mind is crypto trading. However, this activity is not for everyone, as it involves constant monitoring of the market and fast reaction. That’s why many people prefer to invest in crypto and make passive income. In this article, we will discuss where to invest in cryptocurrency.
Where to start?
There are a lot of investment options in crypto. Cryptocurrency exchanges are probably the most popular place to do it on.
Firstly, most crypto investors’ journeys begin when they purchase a cryptocurrency on an exchange. It can be an established asset or an innovative cryptocurrency. And secondly, modern exchanges offer tools for passive income and are considered to be convenient platforms for investing in crypto.
At the same time, it should be taken into account that each exchange has its own advantages and disadvantages, so it is important to decide on an investment strategy and choose the right platform even at times of economic uncertainty.
What to pay attention to when choosing an exchange?
There are two types of cryptocurrency exchanges:
- Centralized exchange (CEX) is an online platform that provides services for buying, selling, storing and exchanging cryptocurrencies. Such an exchange acts as a repository of assets and an intermediary between the two parties. CEXs usually have a single center responsible for managing and ensuring exchange’s work.
- Decentralized exchange (DEX) is a fully automated service based on blockchain technology (distributed ledger) that uses smart contracts. User verification is not required. The fundamental difference between CEX and DEX is that DEXs do not store assets and do not have access to user transactions. An example of such exchange is WhiteSwap, where users can become liquidity providers and earn depending on their share in the pool.
However, CEXs are an easier solution for beginners, as it has a simpler mechanism, interface and a wide range of tools.
Consider a number of key factors that must be taken into account when choosing a crypto exchange:
- It is necessary to analyze the cybersecurity measures taken by a platform. Study the history of the exchange for failures, leaks, hacks and their consequences;
- High liquidity is the most important factor responsible for the ability of the exchange to ensure the smooth purchase and sale of digital assets by users. It is better to use special services to evaluate trading volumes on the exchange as well as user activity;
- The number of supported currencies and trading pairs. The number of cryptocurrencies is constantly growing and investors need to have access to as many of them as possible;
- Wide range of tools. The best crypto exchanges are able to meet the needs of the users and offer a variety of tools for both trading and long-term investments.
Let’s review WhiteBIT, one of the largest European centralized crypto exchange from Ukraine, founded in 2018. The trading fees on WhiteBIT are considered to be quite low. The high level of liquidity of the exchange allows users to make a deal quickly at any time. The exchange also has its own token, the WhiteBIT token (WBT).
At the same time, not only can you buy and store crypto on WhiteBIT, but also make passive income of up to 30%. WhiteBIT’s Cryptodeposit allows users to earn this way.
Cryptodeposit is implemented in the format of a user’s loan of assets to the exchange at interest from 0.4% to 30%. This tool is great for both short- and long-term investment.
The high level of crypto security is confirmed by Hacken.io and CER.live audits, according to which WhiteBIT is in the top three exchanges in terms of reliability with the highest AAA rating.
But do not forget about the general security rules when investing in cryptocurrency:
- Diversify your portfolio. Don’t invest in just one asset. Diversification will allow you to reduce risk. Keep in mind that crypto is a volatile market and anything can happen.
- Study cryptocurrency. Before investing in cryptocurrency, you need to carefully study its characteristics, features, experience and reputation of developers, capitalization indicators, trading volume, etc.
- Invest only what you can afford to lose. Base your decisions on your own financial ability. Never invest money that you cannot afford to lose.
Which cryptocurrency to choose?
There are over 10 000 digital assets based on blockchain technology. Although most beginners only heard of Bitcoin, there are a lot of great cryptocurrencies out there. When choosing the assets to invest in, pay attention to Ethereum, the second most popular crypto in the world. Some people prefer investing in the assets of one of the biggest exchanges in the world, Binance, called Binance Coin (BNB). And there are, of course, those who know that such hidden gems as Cardano can be a key to success.
The final decision is yours, but practice shows that crypto as an investment is popular with both owners of traditional investments and those who have not invested in anything before. However, there is no 100% “safe haven investment” and you should do your own research before making any crypto-related decisions.