Safely Investing in Cryptocurrency Investing was once only a rich man’s sport, with most people struggling to get by on what they already had. Time’s have changed since then, and now investment is more common throughout most of society in some form or another. One thing that’s always been true about investments is the relationship between risk and reward, although not everybody wants to risk their savings for a bigger reward. Thankfully, the world of investments has also expanded in recent years to include much less volatile options. Although we’ve seen volatility in it’s most extreme in the crypto markets, there are options many options within cryptocurrency that are a safe bet. Understanding these can help you to find new and interesting ways to invest your money, without the gambler’s risk of losing it all. Invest Affordably As with any investment advice, this too must come with the classic disclaimer of only advising you to invest what you can afford to lose. This is because even the safest investment has ways of going topsy-turvy beyond comprehension, and as the investor you’re often the least protected. This shouldn’t scare you off though, as one can lose money in a million ways in this modern age, rather it should inspire focus and consideration in your investments. Don’t Fall for the Hype First and foremost, to safely invest in cryptocurrencies it’s important not to fall for the hype that surrounds this industry. As it’s still new, people tend to be very excited about both gains and losses, which can lead to conflation and dramatization which doesn’t necessarily reflect reality. Before you go and invest everything you have in crypto assets, do the following. Digital Wallet Cryptocurrency coins are stored in what’s aptly called a wallet, which tends to be a service provided by standalone companies. Although recent years have seen Neobanks (purely digital banks) start integrating them into their account systems. These may be a more appropriate option for those who want to see their crypto next to their fiat. Crypto Trading Platform Those marketplaces where countless people trade their coins, there are many cryptocurrency trading platform out there with their own benefits and drawbacks. As crypto is decentralized it can be hard to trust smaller providers of these platforms, so opt for the larger more well-known ones initially. As with wallets, some neobanks have incorporated trading platforms into their systems, so keep an eye out for them. Safe Bets When it comes to investing in cryptocurrency, there are a couple of ways you can do so which could be considered safe bets. While these won’t double your money like a timely investment in a newly minted coin, they do tend to have a better Return on Investment (RoI) than a term deposit. Stablecoins The aptly named stablecoins are crypto assets which attach their market value to some external reference, often a reserve asset. This results in a cryptocurrency which retains it’s value over time, although this also means that they don’t tend to go up very much. There are several kinds of stablecoin at this time: - Fiat Collateralized Stablecoins maintain a fiat currency reserve, such as Tether and the USD - Crypto-Collateralized Stablecoins are backed by other cryptocurrencies, such as DAI and Ethereum - Non-Collateralized (Algorithmic) Stablecoins don’t use a reserve but include a working mechanism similar to a central bank to retain a stable price, such as Basecoin There have been calls in recent years to further regulate stablecoins and their use in the crypto exchange, which will further improve the viability of this as a safe investment. Staking A relatively new function in the world of crypto assets, staking allows people to purchase certain cryptocurrency coins and hold them for network support. Those staked coins are then used to validate new blocks on the blockchain, and when your staked coins are used to do so you’re rewarded. This makes for a low risk way of earning money from your cryptocurrency, and may be the best way to get started in this world. Staking Stablecoins The safest bet you could possibly make in the world of cryptocurrency combines the above two aspects: stablecoins and staking. By staking stablecoins, not only will your coin retain it’s value over the period it’s staked, it will also earn you money. There are several different ways you can stake stablecoins, including Decentralized Finance (DeFi) applications. Although one of the absolute best ways may again be through neobank institutions that are offering staking stablecoins as one of their services. This will minimize fees and transaction times, and can help you keep everything in one place.