iskandarnote.com – Here’s How to invest in cryptocurrency – A little over a decade after the first cryptocurrency, Bitcoin, was launched, the thriving industry around the new technology has experienced explosive growth.
Currently, not only cryptocurrencies are available, but several blockchain-based digital assets, including crypto tokens and NFTs.
There are several methods to start your investment journey in crypto. Depending on whether you want to help manage your investments or if you want to align with the ecosystem ethos and “be your own bank”, there are opportunities for those just starting out.
Keep in mind that investing in cryptocurrencies is still a risk you could lose the entire value of your investment so make sure you are in a sound financial position and take the time to assess your risk appetite before putting money into an asset class.
How to buy cryptocurrency
Perhaps the easiest way to buy cryptocurrency is through one of the traditional financial service providers that have recently adopted the technology.
CashApp, a peer-to-peer payment service owned by Square Inc., allows users to buy bitcoins only.
PayPal allows users to buy four different cryptocurrencies: bitcoin, ethereum, bitcoin cash, and litecoin.
Users who hold crypto on PayPal can then use it to checkout in the app as well. Robinhood, a mobile app for stock investing, supports seven cryptocurrencies for users to purchase, including the popular cryptocurrency meme Dogecoin.
And personal finance provider SoFi also allows crypto purchases of 21 different crypto coins and tokens through its app.
These products are well established in the market and can make new investors feel more comfortable with their slick user interface.
But they have certain limitations that make using cryptocurrencies in other ways a hassle.
PayPal, for example, currently doesn’t allow users to send cryptocurrencies they’ve purchased to other crypto wallets, although the company says that functionality is coming. Robinhood is also developing its own wallet.
In SoFi, crypto tokens, which can normally be pledged as collateral called staking for passive income, cannot be used in this way.
The main utility of buying crypto through traditional financial applications is the ability to trade and/or invest for profit in US dollars.