The world of cryptocurrency is quite an alluring one which has made a lasting impression on both the giants of the investment market as well as on the beginners. Beginners especially may find it hard to choose which cryptocurrency to invest in with so many tantalizing digital coins getting introduced now and then with so much to offer amidst the volatile nature of the crypto landscape.
The world’s three largest coins- Bitcoin (BTC), Ripple (XRP), and Ethereum (ETH) are bound to grab the beginner’s attention. The attractive market capitalization of the digital coins, the smart contract technology they offer, and the decentralized applications (DApps) can make the choice of narrowing down one cryptocurrency for investment- quite a tricky business.
So where is the sweet spot of this crypto world where the beginners can sail through easily without facing dear losses?
Looking at Bitcoin (BTC)
Bitcoin BTC was the pioneer of all the digital currencies. And it has maintained its spot despite hundreds of other tokens mushrooming now and then. The decade-old coin has maintained its worth of a storage value. Hence, it has earned itself the most stable coin title. It is the most stable liquid and secure asset. The market capitalization of Bitcoin makes it the most accessible crypto coin for the traders and investors alike. It offers a plethora of exchanges and software implementations.
Moving on to Ethereum (ETH)
Ethereum is a bit different from Bitcoin. It was launched in 2015. It is based on a blockchain platform. It works on ‘smart contract protocols,’ which catalyze the automatic functioning of other projects of an allotted task upon compliance of the already agreed conditions. Headed by Vitalik Buterin, Ethereum ETH has shown a lot of expansion and led 2016’s ICO upturn. Ethereum reigns the 60 percent of all the token models in the current crypto market, earning a 1,000 Ethereum-based digital currencies. The market hold of Ethereum, therefore, impresses and attracts a lot of investment into this smart digital token.
Is Altcoin a beginner- friendly investment?
The relative inexpensiveness, the tall yet volatile market capitalization can all be the source of massive attraction for the beginners looking to invest in the cryptocurrency world. It is not to say that they are bad investments. It is rather subjected to steep drops and steep highs, which means there is a lot of risks involved. For the beginners to test the waters, Altcoins may not be the safest investment route into the crypto world, due to their striking risk potential and equally rewarding benefits ratio. Once an investor gains a certain understanding, experience, and confidence, then these Altcoins investments can be beneficial, as many of the Altcoins offer
A Word on Altcoins
Investing in altcoins can bring in huge profits, and so there is a high possibility of first-time investors to be influenced by the misleading market capitalizations and relative inexpensiveness. The tendency of higher risk/reward gives altcoins a disadvantage which thereby, makes new crypto investors skeptical about investing in altcoins. Still, investing in altcoins isn’t a bad option as quite a few of them represent future technologies that might be as significant as BTC or ETH.
If we look at the cryptocurrency investment platform, most of the investments don’t promise any guarantee like traditional equities to do. But some exchanges like Gemini are making a name for itself on the very same grounds, while others are attracting the investors with varied attractive reasons.
What are the best crypto exchanges?
As a beginner, you can easily get confused in the myriad of cryptocurrency exchanges. To help you out, here are a few exchanges that are performing and delivering to high standards:
Talking of insurance in the cryptocurrency investment schemes, there is one cryptocurrency exchange that is earning a name for complying with regulations. It is Gemini. Gemini is created by twin brothers Cameron and Tyler Winklevoss.
Gemini offers a multi-faceted investment portfolio. It supports individual traders and institutional investors. It also accepts fiat currency. You get to trade three tradable coins at the fee ranging from 0% to 1%. It does not permit margin trading and short selling.
Gemini provides FDIC insurance for cash. The company is regulated by the New York Trust Company which is further regulated by the New York State Department of Financial Services.
It is considered the world’s largest cryptocurrency exchange. It holds an impressive 500 Million Dollar volume trade every 24 hours. One of the main reasons behind this capacity of trade is the very low cost of transaction fee of only 0.1%. Additionally, the exchange offers a long list 130 tradable coins to choose from.
The company reigns the crypto exchange market for a good reason. It understands the investor mindset. By offering customized trading models based on the investor’s experience levels, the company ensures to back up their customers with a lot of trust and value. Not only this, but Binance also offers its own coin called- ‘Binancecoin BNB.’ Further, you can enjoy a discount on its fee if you trade a cryptocurrency with another. As per the report from CoinMarketCap, this token holds a market cap of $1.7 Trillion.
On the downside though, Binance does not use fiat currency currently. Also, the company does not permit the margin trade of cryptocurrency, and the trade at Binance offers minimal regulations.
Coinbase was founded in 2012. It currently has 1 Billion dollars valuation. This company is registered as Money Service Business with FinCen and holds a license to function in most parts of the U.S. As per Forbes reports, the company has partnered with other companies that accept Bitcoin like Expedia (EXPE Overstock (OSTK) and Dish (DISH.)
The versatile investment portfolio of the company offers cryptocurrency exchanges, wallet, the usage of fiat currency for exchanges and allows the trade of four types of cryptocurrencies. The fee for fiat currency investors is 1.49 percent whereas the fee for the wallet investors is 3.99 percent on every purchase. Coinbase does not allow short selling.
This is a Hong Kong-based cryptocurrency exchange company. The unique selling point of this company is the impressive number of tradable coins it offers its investors and traders. It offers 145 tradable coins, along with its own coin which is called OKB. The company boasts 1.5 Million dollars in Bitcoin Futures per day.
Talking about the plus points, OKEx allows traders discount, margin trading, a unique voting system within the company, and short selling of its coins and tokens. It also permits the fiat currency for investment. OKEx charges 0.02% to 0.2% fee. Although the company still needs to reach the U.S. markets after gaining a green signal in terms of regulation.
BitMex stands for Bitcoin Mercantile Exchange. It is also a Hong Kong-based company. This exchange supports the trading of Bitcoin only. The selective approach of this company into the world’s largest cryptocurrency has got itself a trade of $2 Billion every day.
With BitMex you get unique Leverages contracts. You can buy futures contracts and the perpetual contracts instead of directly owning Bitcoins. Any fluctuation in the crypto market, therefore, will give the investor Bitcoins instead of cash. The company charges a fee of 0.05% to 0.25%. It does not accept fiat. Interestingly, the company permits short selling, margin trading. With a little experience, investors can enjoy these smart investments with the company.
On the downside though, BitMex is also not available to the U.S. market currently due to regulatory reasons.
Kraken was founded in 2011. It is the first cryptocurrency exchange to partner with the first-ever cryptocurrency bank. It is the largest Bitcoin exchange in Euro and liquidity.
The company deals with a variety of tradable fiats that include- USD, Euro, Pound, Yen, and the Canadian Dollar. Kraken allows margin trading, short selling at a fee of 0% to 0.26%. The investor can choose from the 17 tradable coins the company offers.
Next one on the list of beginner-friendly exchanges is Huobi. It is a Chinese exchange. One of the most attractive points about this company is its capacity to offer a solid variety of 248 tradable coins. It does so at the fees of 0% to 0.2%.
Huobi makes a special effort to take care of the beginners and the experienced investors. For instance, the company has designed ‘Huobi OTC’ that charges 0% trading fee for trading cryptocurrency with fiat currency. For the experienced investors, on the other hand, Huobi offers more sophisticated features which are backed with 24/7 customer services. According to Coindesk’s report, Huobi will offer a cryptocurrency exchange traded fund (ETF) with the name- GB10. Huobi too has not reached the U.S. markets due to regulatory reasons.
As a beginner, it is always wise to invest an amount which you are comfortable risking and to choose an investment portfolio based on your particular investment needs rather than which is the hottest investment trend in the market. It goes same for a beginner and for an expert to see past the hype and the lucrative trends of the crypto market and fish the real solid deals.