How To Invest In Bitcoin and Other Cryptocurrencies Effectively? (Is It Too Late) Guide for Beginners

Cryptocurrency investment has been an intense debate subject over the past few years. We heard a lot of stories about people who became millionaires overnight. Meanwhile, we also heard stories of people who lost thousands of dollars while they are hoping to get a quick profit!

The fact that you are reading these lines now means that some of these stories have already reached you, and might you have several questions about cryptocurrency investing.

Is it too late to invest in bitcoin? what is the best way to invest in cryptocurrency?

In this guide, we're going to talk about cryptocurrency investment and how to invest in bitcoin online like gainful investors. If you need actionable steps to get started, then read 5 Actionable Steps To Start Investing In Bitcoin.

Before we get going, let me tell you the story of bitcoin in history. When the geek programmer, Laszlo Hanyecz, purchased “2 pieces of pizza for 10,000 BTC coins On 22 of May 2010. At that time, owning Bitcoin wasn't attractive. BTC coin’s price was only a few cents, and no store accept BTC.

But two years later, something shocking happened. Starting from 2012, the news websites began to shed light on this story and compare bitcoin's pizza price in 2010 and its current price (presumably).

Since then, May 22 of every year has become a day when the Bitcoin community celebrates the most expensive pizza in history.

Interestingly, the guy who got 10,000 BTC for two pieces of pizza ( which cost a mere $25) might have more than $80 million according to BTC price today.

This story is not about pizza; it is about the greatest investment ever seen in our modern times; crypto-investment, Bitcoin, and money!

Bitcoin, The first cryptocurrency which doesn’t subject to any central bank, its price moved from a few cents when launched in 2009 to reach $35000 as of today's price.

All of which have triggered a massive appetite to invest in cryptocurrencies. Should you invest in bitcoin? In fact, investing in cryptocurrencies could be incredibly profitable. Many investors achieved great returns on their cryptocurrency investments.

You're probably wondering if you can buy bitcoin after it's gone up so high. Because you worried that the boom will go away and you stand on a high. If you think so, you may always miss the market. 

I believe the crypto market will continue developing as time goes by, there is never a lack of trading opportunities.

However, many people had jumped on crypto-investment with no study, understanding of this market, or even any investment plan. You can imagine what happened! Many of them lost part of their fund or even all of it.

What you don't know about the cryptocurrency market; although it is highly volatile and high-risk, it can make big profits for those who understand the risks associated with it.

Any investment in this world whatever it is should have a plan, there are some risks, and there are some rules and guidelines that must be followed to achieve satisfactory returns.

Get trading strategies from the Mitrade app

A simple way to invest in a crypto is to trade on CFD:  Sign up with Mitrade App to get a unique trading experience in cryptocurrencies. 

You can find opportunities in their rising value OR their drop by trading crypto derivatives - contracts that track their change in value (CFDs)!

Trade now ››

Mitrade is a simplified forex CFD trading platform, providing users a quick and convenient way to trade on global markets, such as Forex, Commodities, Indices, cryptocurrencies, US stocks.

With zero commissions, this platform offers competitive spreads, leverage from 1- 200, as well as fast and reliable order execution.

Mitrade is made for the traders who want to seize the opportunities of markets fluctuating.

why trade on Mitrade

The blockchain brings together the three main types of cryptocurrency.

Bitcoin:  About ten years ago, the mysterious Satoshi Nakamoto published a Bitcoin white paper, which describes“A Peer-to-Peer Electronic Cash System.”Bitcoin was the beginning of cryptocurrencies — the beginning of a new era that could cause a revolution in the financial world.

Altcoins： After Bitcoin’s spreading, we have seen launching dozens of cryptocurrency versions. These cryptocurrencies are called“altcoins". Some are defining altcoins as“alternative versions of bitcoin", referring to any cryptocurrencies other than bitcoin. as altcoins. Find the best altcoins to invest in 2022.

Tokens： This type of cryptocurrency is what we just talked about; it is that‘token’used on DApps are constructed to use smart contracts technology on blockchains like Ethereum and NEO. That is why Dapps use tokens.

The shocking fact is that the cryptocurrency market has more than 7000 cryptocurrencies to date. But what dominates the scene and is the most famous in the world of cryptocurrencies, is a small list of currencies and most important.

1.  Bitcoin

Bitcoin is the beating heart of the entire cryptocurrency market based on the brilliant technology "blockchain." This revolutionary idea of Bitcoin influences most cryptocurrencies. But Bitcoin is still the dominant cryptocurrency, occupying first place in terms of market capitalization. This cryptocurrency has received a lot of attention from financial institutions around the world, which adopted it widely. It is also still the best investment place in the cryptocurrency market.

Trade now ››

2. Ethereum

Ethereum is one of the most promising projects in the cryptocurrency market comes with its sophisticated technology. It is launched in 2015 by the talented math guy Vitalik Buterin, and other partners. Ethereum is the second-largest cryptocurrency in terms of market capitalization, trading volume, and popularity after bitcoin. It is also the fastest cryptocurrency growing — it grew over a thousand times shortly after its appearance and is considered the most active competitor on crypto-market share after Bitcoin.

Trade now ››

3. Ripple

Ripple has succeeded several times in reaching second place in of top cryptocurrency value for a while before it gets back to third place. Ripple is a convenient option for banks and financial institutions wishing to take advantage of the potential of blockchain, as the cryptocurrency XRP acts as an intermediary to facilitate financial transactions and reduce processing time, as well as reduce remittance fees.

4. Bitcoin Cash

Bitcoin Cash is what is known as altcoin - a virtual currency that works essentially in the same way as Bitcoin. Bitcoin Cash is just a branch of Bitcoin. It is a result of Bitcoin's hard fork which separated the original blockchain and gave out each blockchain a different governing set of rules. Bitcoin Cash was created to solve the scalability problem of the size of the blocks in the Blockchain, as the capacity constraint has caused the problem of high fees and delays in transactions. 

5. Litecoin

Litecoin (LTC) is similar to Bitcoin in many properties, and it is one of the most veteran and highly popular cryptocurrencies. However, Litecoin is four times faster, with cheaper transaction fees than Bitcoin.

Well, we have enough knowledge of crypto investment. Let's turn to our vital part of the article.

Open Live Account   Try Demo Account

■ Cryptocurrency Trading

In day trading or swing trading, the trader makes trades for one day or a few days according to the trader's estimation and expectations of price movement.

Traders rely mostly on technical analysis and fundamental analysis to make their decisions to enter and exit trades. they need to stay stuck to the screen of the computer throughout the day. 

If you are proficient in technical analysis techniques and an expert on how the markets work, you will only need minutes to find opportunities that suit your trading method. 

■ Long-Term Investing in crypto

Long-term investors are those Hodlers who buy and wait for a long time. They do not care much about what happens during the day or even during the week, and their vision extends for years.

This type of trading requires a certain amount of trust in cryptocurrency holdings, most likely attained after an in-depth study of the white paper and previous market history of the cryptocurrency of interest.

■  Bitcoin mining

Mining has become an industry and is even accepted by ordinary people. Miners have gone through mining with CPUs, then to ASIC machines, and then with mining pools and cloud mining. Many older devices are no longer coming online, which means the entire network will become more efficient, leading to more competition.

Read the Crypto chart

First of all, if you don’t have a financial or technical background and want to involve in the cryptocurrency market, your first steps will be confusing. Therefore, If you want to trade effectively, you need to know how to read the candlestick chart.

Let's start with the key elements of the cryptocurrency charts.

●  Candlesticks (Bearish and Bullish)

To begin with, the crypto charts have two types of candlesticks which are Bearish and Bullish. By default, the bullish candlesticks are represented by green candles, which indicates that the price has increased during the selected time frame. Each candlestick has an opening price, closing price, body, and wicks (which represent the highest and lowest prices).

●  Time Frame Selection

In crypto charts, candles cover a specific time frame. So, it is essential at first to choose the time frame that you want to cover candles. This means that the encryption candlesticks will show all the transactions that occurred in the time frame you selected.

For example, if you choose the Bitcoin timeframe for five minutes, each candle will represent 5 minutes for the bitcoin transactions.

Picture: Bitcoin trading chart on Mitrade

You can choose from default time frames (5 minutes, 15 minutes, 1 hour, 4 hours, daily, weekly, monthly).

●  Volume

The standard crypto chart always displays what is called Volume, which represents how many trades were executed during the selected time frame.

The longer the volume bar is, the more buying or selling pressure is. A green volume bar will highlight an increased interest in the coin and buying pressure. On the other hand, a red volume bar will highlight a decrease in interest in the coin and selling pressure.

That's was the necessary knowledge to read the crypto charts, we will devote a more detailed guide about technical analysis using indicators, but this part is enough to move to the next point.

Let's turn to talk about how to choose the best platform for trading cryptocurrencies. Before involved in any platform to buy/sell, trade, or hold cryptocurrencies, there are several things to consider, the most important are:

Regulation —  It is important that you open an account in a regulated cryptocurrency trading platform.

Fees — Before joining, make sure you understand fee-related information such as deposit, transaction and withdrawal fees. Fees could differ significantly depending on the broker you use.

Trading Options — It is exciting to be able to invest in many financial markets at the same time. The best option is to work with a broker that offers a wide range of markets for trading.  

Easy-to-use — A user-friendly interface is crucial for the trading platform as bad interfaces could confuse the trader, which may lead to some errors or even accidental losses.

Fast Execution — Some platforms may take several minutes to execute a buy or sell order, and this is not normal; it should take only a few seconds or less.

Some places to invest in bitcoin and cryptocurrencies

#1. MiTrade 

#2. Binance

#3. BitMEX

#4. Coinbase

#5. FTX

Cryptocurrency Scams

the cryptocurrency market is a fledgling industry is filled with many forms of fraud in one way or another. The cryptocurrency market is complicated, confusing to a vast of new users, and lightly regulated — all of which make it an ideal target for scammers. 

The most famous crypto frauds include Scam Coins, Fake News, Fraudulent ICOs, Phishing, Mining scams, Ponzi Schemes, Money Transfer Fraud, Malware, Fake Apps & Scam software, plus fake exchanges and wallets.

Regulatory Issues

Bitcoin's ability to use almost anonymously is a cause for concern, as that would make it attractive for criminals. They are fear the decentralization nature of Bitcoin that may be exploited for money laundering and tax evasion.

As a result, Many authorities (or regulators) around the world are still struggling to establish a regulatory framework for Bitcoin. But, just like any innovation involving to be used as money, regulations regarding Bitcoin will continue to be written and rewritten.

Cryptocurrency Market Volatility

The cryptocurrency market is in high volatility. You could make unprecedented gains if you invest in cryptocurrencies at the right time as well as you could make significant losses if you chose the wrong time or the wrong way. 

The reasons for cryptocurrency market volatility included a lightly regulated market, investors' feelings like FOMO (Fear of missing out) and panics, marketing propaganda, fake news, and scammers.

Cryptocurrency Market Manipulation

cryptocurrencies often shoot up by dozens of percentages in a few minutes to dramatically fall back to their previous levels the following day, what is known as the pump and dump scheme. As well as sell walls, accumulate cryptocurrency tokens cheaply ahead of positive news and dark pools, and other market manipulation tactics.

All of these morally-questionable schemes make the crypto market so risky for novice investors who are not familiar with the underlying market mechanics.

● Plan a strategy

Investing in itself requires many things. At first, you need an entry plan, building your expectations of how much will grow, how long it will take to rise, how much risk is, determining the capital you can invest, the time frame for investment,  and finally, the exit plan. These are all the essential questions you should ask yourself before you start investing in the cryptocurrency market.

● Do not put your entire funds in one cryptocurrency

This rule applies to all types of investments, meaning that you have to invest in more than one crypto asset, not only throwing your entire funds in one asset.

● Take profit or stop loss timely

It is wrong to trade without using a stop-loss order. That could be like driving without brakes, which ultimately leads to an unintended result. Stop loss is your safety point.

● Conduct your research

Learning to do your research is an important life skill and can push you forward if you rely on it accurately. It is about developing your skills in criticism and assessment, recognizing patterns, and balancing your emotional opinions with logical reasons. 

● Learn about common scams