Cryptocurrency is created through crypto mining, which you can do at home with your computer. Unfortunately, this has given cybercriminals a new target, as they can secretly use your computer to mine for crypto without your knowledge.
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Crypto prices are volatile, so you must be careful when venturing into this form of investment. We have some tips to help you get started.
Before we dive in, this is not financial advice. Cryptocurrency is inherently risky, and you should never invest money you are not willing to lose.
Using dollar-cost averaging to lower risk
When you purchase regular stocks, you can set buy orders to automatically trigger when specific prices are met. You can fine-tune these purchases over time using dollar-cost averaging. This also works for cryptocurrency.
Rather than invest a lump sum in one commodity and risk falling victim to volatility, you can invest in increments. Choose an amount you’d eventually like to invest and buy smaller amounts of crypto for an equal price over time.
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How it works
Let’s say you want to put $5,000 in crypto. You can invest it all at once, but if a big dip happens, you can lose most of your money. Instead, break it up into smaller purchases over time. For example, you can put in $500 every month towards Bitcoin, Etherium or Solana. This is done automatically when you set up recurring buys.
Over an extended period, dollar-cost averaging tends to have lower risk and, along with it, greater reward. This is a long-term strategy that helps to protect you from market swings.
Dollar-cost averaging takes away the stress of trying to time the crypto market, which is essentially impossible to do.
Developers and companies sometimes airdrop crypto to their early users and investors, but be careful if you receive crypto seemingly out of nowhere. Tap or click here how scammers are using the gift of crypto to target new victims.