Many investors are getting to grips with cryptocurrency as one way to diversify their portfolios to mitigate the effect of volatility on a specific asset class or a single asset. Crypto investors also diversify within their cryptocurrency portfolio, so their investments aren’t in just one coin.
So, once you’ve decided you want to invest in crypto (Your Guide to Crypto Investing), you’ll also need to think about your investment strategy and how much you’re willing to invest in digital currency. Some hedge fund managers are increasing cryptocurrency holdings to between 5 and 10% of their total assets. Investing a small amount is an easy way to mitigate risk and give you access to the potential for incredible growth attributed to this asset class.
Next, and before you can buy crypto, you’ll need somewhere to store it.
A digital wallet is a data purse or pocketbook. Unlike a physical wallet that stores dollar bills, a digital wallet stores cryptocurrency. A wallet keeps digital assets secure because you need a private key (Glossary of Cryptocurrency Terms) to use it.
You can withdraw funds and transfer them to trading or investment accounts or other wallets like a physical wallet. You need a wallet for each type of crypto or digital asset you own. And there are several types of wallets for desktop, web, mobile, as well as hardware wallets.
Regular crypto traders or spenders use wallets to send and receive digital currency tokens. There are two types: hot and cold. A hot wallet (Glossary of Cryptocurrency Terms) is connected to the internet, making it quicker to transact to and from, but which can also make it more vulnerable. A cold wallet (Glossary of Cryptocurrency Terms) stores bitcoin offline, safeguarding against cyber-attack.
Fabriik Money Button is a popular Bitcoin SV wallet that offers a simple way to make or accept crypto payments over the internet. Payments cost less than one cent and are almost instant. You can pay, tip, and buy BSV with its unique swipe feature. And now you can also trade crypto directly from your wallet too – with Fabriik Weave – a quick and effortless way to trade up to US$1000 in crypto per day.
We have chosen Bitcoin SV because we believe it is a superior blockchain technology to other cryptos. For investors, this translates to extremely low – negligible – transaction fees, ultra-fast transaction speed, and security.
There is one thing to keep in mind as you navigate the digital currency universe — although you must have your assets online to trade and do transactions, many experts recommend immediately taking assets off-line to a hardware (cold) wallet as soon as you’re done. That means your digital wallet will be disconnected from any remote cloud or other networks.
A bitcoin wallet comprises the bitcoin owner’s public and private keys. The private key is used to access the bitcoin currency and contains a unique combination of alphanumeric characters. The public key is the equivalent of the account name in a traditional bank account. The trading parties share their public keys. Once the blockchain verifies the transaction, the buyer pays the bitcoin tokens to the seller’s address, and the seller can access the funds via a private key.
“If you invest in cryptocurrencies, you should always protect your cryptocurrency wallet with the most reliable security measures. This includes storing your digital assets on a dedicated hardware wallet, enabling two-factor authentication, and keeping the system up to date with software patches. If you don’t take these precautions, you run the risk of losing all of your cryptocurrencies.”
— Clay Epstein, Chief Information Security Officer, Fabriik.
Another last but essential tip is to always keep the hardware secure to avoid losing the digital asset because once it’s lost, there is no getting it back. It’s imperative to secure your digital assets, even though they’re not in physical form. Read more – Tips to Safeguard Your Digital Wallet & Passphrase
The risk of loss in cryptocurrency-related investments can be substantial. It is important that you fully understand the risks involved, that you have adequate financial resources to bear such risks, and that you monitor your positions carefully. We do not provide you with any investment advice. If you are in any doubt about the risks involved with your account, you should seek professional advice.
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