Making investments in the crypto world surely seems beneficial. However, you need a brain and not just luck. Your brain will help you make profits.
One of the questions that beginners often ask is the currency they should choose. With the availability of so many options, it is confusing to select one cryptocurrency. Also, if it is suitable to invest in more than one currency or not.
You should know these things if you want to make a start. Along with the theoretical information, you will also need some tools, which include your crypto wallet and investment software. Trading in cryptocurrencies is so easy because of the available software that does all the work by itself. For example, you can get at bitcoinscodepro.com/de.
This is the trading software that helps you in getting your trading experience. In addition to this, it will also increase your profitability by making timely decisions. You will get trading signals through its superior algorithm. It allows you to make quick decisions and increase your profit. Or you can choose the trading bot that will enter and exit the trades according to the data reports. So, you are bound to do amazing trades with this software.
The question that whether you should choose one currency or more is still there. So let’s get an answer to that.
1. Staking all of your investment
If you have even a little bit of knowledge regarding investments and trading, you should know that you never stake everything on one bet.
Similarly, while working with cryptocurrencies, you have various choices. So why would you bet all of your money on a single one? Although some currencies might do a better business than others but some might go down too. Therefore, you should prepare yourself for both cases.
For example, you invest all of your savings in bitcoin and it has been top crypto as well. However, suddenly the market goes down and you lose your investment. What will you do then?
2. Quantity over the name
Bitcoin and Ethereum are the top two cryptocurrencies in the world. Therefore, they are the most expensive ones too. However, we prefer quality over quantity but things work differently in the crypto world. Although name and fame are important factors to determine the investment option but again, not in the crypto world.
While working with cryptocurrencies, it is important to look at other factors. For example, a new cryptocurrency may have better features and working performance. In addition to this, it might show better market performance. Thus, it will have more potential as compared to other currencies. Such factors show a promising future. Therefore, investing in the early days will be a good choice.
So investing all your amount in a single currency won’t be much beneficial for you. Instead, if you choose to buy many coins of cheaper crypto and a few of a better name, it could be a good option. So spread your money in the market and make several investments. This will give you a chance to make a profit. Even if one currency is not doing a good business, the other one might be. So if you lose some amount from one cryptocurrency, you will make a profit from another one.
3. Changing technology and different potential
Bitcoin was the first cryptocurrency and therefore, its uses are limited. Although it paved the way for future cryptocurrencies but it itself, is lacking in many things. Despite that, bitcoin has been the number one cryptocurrency in the world. Although it still lacks various features that new currencies have, but it has maintained its position till now.
For example, Bitcoin was the first cryptocurrency and it works on blockchain technology. But because blockchain technology has its limitations, the next cryptocurrencies made use of other technologies. Ethereum, for instance, has its own blockchain. It allows developers to use create decentralized applications.
Similarly, Polkadot (DOT) can use various blockchains and even bridge them together. So if bitcoin is still stuck at being a digital currency, other currencies have better goals.
4. Real-world uses
Although the world has started to accept digital currencies but not all of them. You can do shopping by using bitcoin, litecoin, Ethereum and even some other digital currencies. However, not all stores and shopping platforms will accept all other digital currencies.
Therefore, you should have a range in your wallet. This will let you do shopping even if the store is accepting only one of the currencies you have. So the more you have, the better it will be.
5. Growth potential
The growth potential of digital currencies is also different. Despite being in the top two positions, Bitcoin and Ethereum also face bad days. Their market value also goes down. And this can be as severe as going down by 10 and 11 percent.
Such shocks are a part of this trading world. Even if you have invested in the top 2 cryptocurrencies, there is no guarantee that you will make an immediate profit and won’t lose anything.
6. You can earn rewards by staking only
You can even pledge cryptocurrencies to the blockchain by staking on them. So if you do so, you will get your invested amount back. Moreover, you will get rewards/and what can be the reward? Some coins of other currencies.
But staking option is not available for all digital currencies in the market. Therefore, you have to be aware of the things that are going on. This will let you have detailed reports on how the market is working and what will be the future. In this way, you will be able to get a chance to earn reward coins for free.
In addition to this, Bitcoin does not allow staking. Therefore, if you have invested only there, you won’t be able to do anything. This also gives you another reason to look for more digital currencies and not to rely on a single one.