Crypto Investing 101 Feb 8, 2022 9:38:28 AM Three questions to ask yourself before you invest in crypto. If you ’ re taking your foremost steps into the world of cryptocurrency investing, we recommend asking three questions to gain your foot. Don ’ t concern, we have some answers to get you moving when you ’ ra ready. And remember, to invest in crypto you don ’ t have to be an technical. We ’ re here to be your guide so you can make the best decision for you. question 1 : What is crypto ? A simpleton interrogate with a not so bare answer. To date, there are over 17,000 types of crypto in existence.1 Bitcoin and Ethereum may be household name but the worldly concern of crypto extends far beyond their influence. In club to understand crypto, it helps to understand its underlying engineering : blockchain. Blockchain is a engineering that, in the context of crypto, provides recordkeeping through five foundational features : immutable : The data can ’ thyroxine be changed. Decentralized : Controlled by a large network of computers rather of a central authority. Distributed : many parties hold populace copies of the daybook. Cryptographically Secure : Makes tampering or changing the data basically impossible. Permissionless : open to anyone to participate. If you don ’ t remember any of the five features above, here ’ s the big theme : The internet enabled the digital stream of information. Blockchain technology enables the digital flow of about anything of value. What does that mean ? It means we can create systems to record possession without the need for third base parties. And we can transfer ownership—using blockchain—between each other without a third party. This creates potential for modern economic and business models, which is why there are more than 17,000 types of crypto. Crypto use cases span from artwork ( for case, you can bid on a bored looking ape for alone a few hundred thousand dollars ) to bank ( making fiscal services available to marginalized groups ) to gaming ( better grab that plot of land in the metaverse before Snoop Dogg does ). All of this is made possible because crypto, built on blockchains, creates new ways to transact in a growing digital economy. question 2 : Why should I invest in crypto ? If you want to invest in crypto, reflecting on why can help guide your investments. Crypto is an emerging asset class and is transforming the fiscal diligence. however, you should be careful to understand the risks of cryptocurrency, which can be highly inquisitive and volatile and can experience crisp drawdowns. Like all invest, this is personal and not without hazard, and we encourage you to invest in crypto only when you are comfortable bearing the risk of passing. One of the things that excites us about crypto is the diverseness of the ecosystem that is being created. Crypto is far more than plainly a digital currentness used to buy NFT art or “ digital gold ” as we see in the headlines. The use cases are creating global investment opportunities available to anyone who chooses to participate. Keep in heed, across the thousands of crypto projects, you do have to look out for scams and imposter. For exercise, Squid Game may have been a television indicate worth gorge watching but ended up being a crypto worth about nothing. But that ’ s not to say that crypto can ’ t be used for dependable. ( Fun Fact : Did you know that you can donate crypto to charity ? GiveWell, one of Betterment ’ s collaborator charities, accepts many different types of crypto ! ) hera are a few common reasons people invest in crypto : Make Money Crypto investing comes with risks. There can be extreme price fluctuations compared to traditional asset classes. With that said, there is the likely for crypto to quickly increase in value both over short circuit and long periods of time. Based on Betterment ’ s research, this is the # 1 argue people invest in crypto. And that ’ s perfectly fine—we invest to create wealth for ourselves and loved ones. Decentralization Many of the projects that create crypto tokens are considered decentralized, which means they aim to remove the control banks and big institutions have on fiscal services and early occupation models such as advertising. When applied to traditional finance, this sector of crypto is called Decentralized Finance, or DeFi. Blockchain engineering, including digital wallets and chic contracts, can be used to replace banks and other third base parties. In theory, this can put users in operate, reduce fees, and speed up transactions. ( You can send crypto about immediately to another digital wallet. ) Oh, and did we mention that crypto transactions can occur 24/7/365 ? Another benefit of its decentralize nature. Invest in the Future As we ’ ve mentioned, crypto spans a wide spectrum of our lives, and it ‘s changing the future, evening if we don ’ metric ton know how yet. By immediately, you ’ ve probable heard the condition metaverse being casually used, whether by Facebook ’ sulfur ( good-for-nothing, we mean Meta ’ randomness ) CEO Mark Zuckerberg or by a family member at a vacation dinner. It ’ s everywhere we look. And one way or another, many investors believe the metaverse will be depart of our future. similarly, the concept of Web 3.0, which is a broader development of the internet, offers investors many forward thinking investments to consider. The best depart ? It ’ south by and large accessible to anyone, not merely saint investors and venture capitalists. Stepping back, a more general reason for investing in crypto, specially if you are completely new to it, is diversifying your broad investment portfolio. If done correctly, including a small sum of crypto in your overall portfolio may help prevent you from being excessively exposed to boil down risks. Depending on what crypto investments you select, you ’ ll amplification photograph to advancements in the metaverse, decentralized finance, and Web 3.0 technologies, among others. question 3 : How should I invest in crypto ? There are many ways to invest in crypto but we ’ ll boil this down to two categories for you to choose from : do-it-yourself Crypto and Managed Crypto Portfolios. Do-It-Yourself Crypto DIY crypto investing involves navigating digital wallets, selecting crypto exchanges, and safekeeping keys ( then significant ! ). Before you do any of that, don ’ triiodothyronine forget you need to research which of the 17,000-plus cryptos you want to invest in while navigating the crypto ecosystem yourself 24/7/365. peculiarly because cryptocurrency is sol vary and prone to speculation, DIY crypto involves significant upfront research to understand which crypto is the right fit for you. Managed Crypto Portfolios Crypto managed portfolios function similarly to managed fairness portfolios. The technology and investment experts that manage the crypto portfolio do much of the heavy rise ( the nitty farinaceous research of which cryptocurrencies may be allow for you based on your fiscal situation and preferences, the rebalancing and reallotment, and the manage of your account, including wallets/keys ) while you can focus on the bigger painting like creating the life you want through your investments. There is hush risk with this method acting of investing in that the underlying cryptocurrencies may experience losses, but it can help you invest in crypto based on your needs and interests, creating a individualized crypto investing feel. Plus, you ’ ll deliver clock time and not have to stress about remembering your digital wallet ’ sulfur password for reverence of losing your Bitcoin forever. Are you cook to invest in crypto ? Before you step into crypto endow, make sure you know what you are investing in and why it ’ s crucial to you, and try to understand the risks involved. Remember, you don ’ t have to be an technical. If you reserve the terminus DIY for weekend trips to the Home Depot, not crypto induct, consider a managed crypto investing portfolio.