Individuals, out of a deep conviction in the success of virtual currencies or to have a go at this new kind of investment, can diversify their holdings by investing in crypto currencies. Formerly an ultra niche market reserved for the most geeks of the geeks, access to crypto currencies has become widely democratized thanks to the emergence of online brokers and web platforms allowing the purchase of Bitcoin and other encrypted currencies, to be build up your crypto-currency portfolio. Be careful though, just because access to investment in tokens is now relatively easy does not mean that it is less risky. In this article, discover 4 mistakes too often made by the neophyte and the right attitude to adopt when you want to start trading virtual currencies. NEGLECTING THE TECHNOLOGY ON WHICH THE CRYPTO CURRENCY IS BASED First, you should never invest in cryptocurrency if you don't understand what it is. Indeed, it is better not to invest in crypto currencies if you do not understand what it is for, and above all, how it works. The purpose of virtual currencies, like any currency, is to be used to purchase products and services.
And the enthusiasm for these new payment methods is very real. However, speculation, which is very present in the cryptocurrency market, is also for many investors a motive for investing.
At their own risk! What is certain is that virtual currencies are still seeking their balance, between means of payment and financial assets. We have seen the possible uses of cryptocurrency, now let's see how these tokens work. Most virtual currencies are based on blockchain technology (or block chains in French). The initial goal is to create a currency that is not controlled by central banks.
The tokens are put into circulation by the computer protocol which defines both the number of tokens in circulation, their circulation speed and their storage power. This protocol can be changed by any developer, as long as the developer has the agreement of the entire community. They make it possible to carry out dematerialized financial transactions quickly, simply and therefore inexpensively; but also in a secure and anonymized way, without a trusted third party. As such, they can represent the future of means of payment.
INVEST IN A SINGLE VIRTUAL CURRENCY Diversification is a golden rule of investing and cryptocurrencies are no exception. You don't put all your eggs in one basket.
So, if you are convinced of the advent of crypto currencies, it is better not to just invest in one but to spread the risk, buying different tokens. It may be wise to vary the characteristics of the assets held in the portfolio and for example opt for currencies whose supply is constrained, that is to say that the quantity is limited and defined from the start as Bitcoin (21 million units in 2140), with currencies following them, an inflationary model like Ethereum, for which no limit has been set on its money supply. Be careful, it is better to choose currencies relatively known and recognized to avoid serious disappointments. Thus, it will be advisable to favor cryptocurrencies with a relatively high market capitalization. BET A LOT OF MONEY ON CRYPTOCURRENCIES investment-cryptocurrency-avoid-risks Hyper volatile, hyper risky, investing in cryptocurrencies is not recommended for the most risk averse cautious profiles, and others would also do well to devote only a very small part of their wealth to it.
Virtual currencies fall under the investment category of atypical investments or alternative investments sometimes also called exotic investments. These atypical investments refer to investments in art, books, wine, forest, collectibles, virtual currencies, etc. These are relatively risky diversification investments which, as such, should never represent more than 5% of your assets. INVEST IN CRYPTO CURRENCY WITH EYES CLOSED AND WITH CONFIDENCE As we have seen, virtual currencies are risky assets. But also be aware that there are many
INVEST IN CRYPTO CURRENCY WITH EYES CLOSED AND WITH CONFIDENCE As we have seen, virtual currencies are risky assets. But also be aware that there are many scams in this area. Thus, you can find on the web fake cryptocurrency trading platforms or virtual wallets that offer to buy or trade various cryptocurrencies but which, in reality, take your pennies and never return them to you. It can be tempting in this context, to want to be accompanied by a specialist in atypical investments.
You might consider seeking advice from your wealth management advisor. monk (CGP) but beware, in the eyes of the AMF, crypto-asset investments are not miscellaneous assets and, as such, a wealth management advisor will not advise you on this matter. You will have to fend for yourself. Be aware that two types of professionals can offer their services to buy and sell virtual currencies: digital asset service providers and stock brokers offering derivatives based on cryptocurrencies.
Digital Asset Service Providers (PSANs) are financial intermediaries that offer various services relating to crypto-asset investment, including the purchase / sale and custody of crypto-assets. As soon as the PSAN offers the custody of crypto-assets or access to crypto-assets, as well as the purchase / sale of crypto-assets against currencies having legal tender, it must be registered with the Authority. financial markets (AMF). Before entrusting your money to this type of intermediary, check that this is the case and that it is not on the AMF's blacklists of platforms not authorized to offer cryptoassets. However, this provision is very recent and there is to date, according to our information, no service provider who has obtained AMF approval. You can also invest in cryptocurrencies by positioning yourself on derivatives whose underlying is a virtual currency. Therefore, you will be able to buy cryptoassets through an online broker that offers this type of derivatives.
Please note, before investing, check that the service provider is approved and appears on the Regafi lists (the register of financial agents).
