Unless you’ve been living under a rock for the last decade, you’ll undoubtedly be familiar with rise and rise of cryptocurrencies. Launched in 2009 with the arrival of Bitcoin, there are currently almost 8,000 different cryptocurrencies in circulation, some of which are worth far more than they were at their inception.

For those interested in investing in this exciting new sector, it can seem like something of a minefield to know where to begin. Thankfully, this informative article is on hand to offer a few pointers on how to get started, what to look out for and how to maximise your return on investment (ROI) when entering the crypto marketplace.

Educate yourself

As with any potential investment opportunity, the first step is learning as much as you can about the venture in question. That might pose a larger problem than normal, since cryptocurrencies are an entirely new industry unto themselves. However, taking the time to read up on the subject to have all crypto questions answered can stand you in good stead when it comes to getting your head around how your currency of choice works – and when is best to buy and sell.

Read the news

Staying abreast of cryptocurrency-related currency affairs is absolutely crucial to ensuring your investment performs to its maximum potential. With so many different coins being released every week – and with governments, industry experts and prominent public figures discussing them in the media – the value of cryptocurrencies can go up and down at the drop of a hat. You only need to glance at the effect of Elon Musk’s comments on Bitcoin to see how much of an effect the news has on the crypto market.

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Diversify your portfolio

Have you ever heard the old adage about not keeping all your eggs in one basket? While it’s a sensible precaution to take with most investments, it’s particularly applicable to cryptocurrencies. That’s because they are, by their very nature, highly susceptible to fluctuations in price, with more than one thousand of them failing since the industry was born 12 years ago. Investing in several different currencies at once allows you to hedge your bets and avoid losing too much all at once.

Only invest what you can afford to lose

Anyone who has any experience of investment whatsoever will be aware that your capital is always at risk and there’s a chance you could receive less than what you invested at the outset – or indeed, lose it altogether. On the other hand, early adopters of Bitcoin who invested just a single dollar at its inception would now have a sizable fortune worth tens of millions of dollars at the time of writing. As such, the risk is ever-present… but the rewards are potentially astronomical.

As an emerging market for investment, there is still much to be learned about how cryptocurrencies will perform in the future. Educating yourself now and staying abreast of the latest development can help to inform your cryptocurrency investment strategy, giving you the best shot at an optimum ROI in the long run.