How do I invest in cryptocurrencies?

Know how do i invest in cryptocurrencies is an important step for those who want to buy these assets. The valuation of digital currencies has grown significantly in recent years, which has increased people's interest in them. Check them out below.

How do I invest in cryptocurrencies?

Lately, with the great appreciation of digital currencies, more people are asking themselves: how do i invest in cryptocurrencies? However, as with any investment, it's important to learn more about this market. 

According to data released by the IBGE, more than 4 million Brazilians are investing in cryptocurrencies. The data shows that the age group of people investing in cryptos is between 16 and 25 years old.

To start investing in cryptos, investors need to open an account with a specialized broker. There are several options on the market, such as digital brokers, traditional brokers and brokers specializing in this type of sale. 

What is cryptocurrency?

In general terms, cryptocurrency works like traditional money, but there are some differences between the two. One of the characteristics of cryptos is that they only exist in the digital world. In addition, it is not issued by any bank, government or company. 

These digital currencies were born to revolutionize. After all, with Bitcoin, users can receive and send money at any time, without needing a third party to carry out the task. 

Bitcoin is the best-known cryptocurrency on the market, but there are other models that are gaining ground. It's worth noting that all crypto transactions take place on a system known as blockchain, which is responsible for storing all data and security. 

How to start investing in cryptos

As mentioned above, there are several brokers that offer these assets for purchase, whether traditional, specialized or digital. The first step to investing in this market is to open an account with one of these platforms. 

Investors can buy cryptocurrencies or crypto funds. Then, after some time investing and with experience, it is possible to buy coins through the cryptos acquired in specialized agencies.

If you don't have experience in this type of investment, buying shares in funds is recommended. The procedure is simpler than you might think, as you don't have to buy the cryptos, but rather the derivatives. 

Another possibility is to invest in exchanges, which work like investment funds that are traded like shares on the stock exchange. The BITH 11 ETF, for example, is attracting a lot of attention. 

Investors can buy assets directly, i.e. by trading with other people. This type of transaction doesn't need any intermediary to work, but it's important to be careful to avoid scams. In other words, find a reliable user on the market. 

What are the main cryptocurrencies on the market? 

As mentioned earlier, Bitcoin is the most popular crypto in the world, but there are other cryptocurrencies. Alternatives such as Ethereum, Litecoin, Ripple and more are gaining more and more ground among investors. 

According to data released by Code Market Cap, the main cryptocurrencies of 2021, i.e. those that appreciated the most, were: Polygon, Terra, Gala, Fatom, Axie Infinity and The Sandbox. 

How peer-to-peer investment works

Cryptocurrencies can be traded through peer-to-peer investment. These transactions usually take place on dedicated platforms. In other words, the buyer contacts the seller, agreeing on the quota and the amount they want to buy. 

If the seller accepts the price, then the buyer makes the payment and receives the assets in the wallet within a few minutes. Since there is no third-party intervention, this process can be carried out at any time and place in the world. 

As soon as the payment hits the seller's account, he sends the cryptocurrencies to the buyer. It's worth noting that the cryptos are only received once the payment has been sent. This reduces the chances of scams or fraud. 

One of the biggest advantages of negotiating directly with sellers is the speed and absence of fees. However, it's important to find trustworthy people, as scams can happen.

If you're afraid of buying cryptocurrencies directly from sellers because of the risk of being scammed, the best alternative is specialized brokers. 

How investing in exchanges works

Exchanges, also known as brokers, are the safest way to buy cryptocurrencies. After all, these platforms are responsible for intermediating trading, connecting various investors around the world in one place. 

The process of buying cryptocurrencies on exchanges is simpler than it sounds. This is because the user only needs to register on a platform, providing all the data requested when opening the account.

In most situations, these applications take place over the internet. In some cases, exchanges may ask for copies of certain documents. In any case, the transactions are simple. 

Once you've transferred the money to the account, the next step is to find the cryptocurrency you want to invest in and apply it. Most institutions allow you to send real money via bank transfer. In addition, some accept credit and debit cards. 

Where to store cryptocurrencies

Now that you know the main intermediaries for buying cryptocurrencies, it's time to find out where to store them. 

Investors can leave them on the exchanges, as they provide a virtual wallet, or they can transfer them to the wallet itself. Wallets work as follows:

• App: This model is the most practical, but it is less secure as you need to be connected to the internet;

• Websites: Another possibility is websites. This type of wallet is considered a little less secure, as the user's information is stored on the company's server. So don't use it to store large sums of money; 

• Desktop: This type of application is only available for personal computers. The model is extremely secure, especially when used in combination with a good antivirus and firewall;

• Physical: Last but not least, the physical wallet is similar to a USB stick. In this case, all the information and passwords are stored and protected inside the device, making it extremely secure as there is no need for the internet.