5 tips to safely invest in cryptocurrency in Canada
It wasn’t that long ago that people would laugh if they found out you held part of your investment portfolio in cryptocurrency. Now it seems like cryptocurrency is everywhere, and not just for hardcore investors and blockchain nerds either: Elon Musk has proclaimed his love for Dogecoin, Gwyneth Paltrow has supported TeraWulf, and Apple CEO Tim Cook has spoken openly about buying into Bitcoin.
There’s a reason crypto is so popular: there’s a lot of money to be made. If you invest now, you are still pretty much getting in on the ground floor. Experts predict Bitcoin could be worth as much as $100,000 one day. Some even think it could replace gold in the future.
Cryptocurrency investments, in general, can offer better returns than traditional investments — they’ve outperformed most other asset classes in 2021. Whether you’re thinking about investing in Solana, Siacoin or Shiba Inu, owning some cryptocurrency can increase your overall portfolio’s diversification.
Ready to get started? Here are 5 tips to safely invest in cryptocurrency in Canada:
- Diversify your investments
Like any good investment strategy, diversification is key. In order to hedge against possible cryptocurrency price drops, avoid putting all of your money into any one coin. There are many options to choose from, including popular cryptocurrencies like Ethereum, Ripple and, of course, Bitcoin.
- Choose a trustworthy exchange
Canadian cryptocurrency exchanges are the best and most convenient way to buy, hold and sell cryptocurrencies. They’re generally secure, in compliance with appropriate regulations, can help safeguard your assets and are often insured in the unlikely event of a security breach. They’re also generally pretty easy to use, offering intuitive interfaces that make it easy to do everything from buy all major crypto coins to deposit money directly to your bank account.
A few questions you should be asking:
-Is this crypto exchange secure? Canada’s Hubkoin has the highest tech known to humankind — the security is the highest it can be, says managing director Robert Watterson. “The site cannot be hacked the way we’ve seen in the past.”
-What percentage of assets are stored offline? Hubkoin stores about 92 percent of assets in cold storage to protect it from attacks.
-Are fees low? Hubkoin doesn’t charge for some types of transactions and offers the lowest exchange rates.
- Keep most of your cryptocurrency in a ‘cold’ wallet
Want to actually use your cryptocurrency? Get yourself a cold wallet.
Cryptocurrency wallets don’t actually store your currency, like an ordinary wallet that you keep in your purse or pocket, but rather enable you to access, send and receive your coins on the blockchain with your public key (the address the other party in the transaction sees) and private key (known only to you) — both are required in order to complete a transaction. Wallets also provide a record of transactions and let you know your available balance.
There are two main types of digital wallets used to store cryptocurrency: hot and cold. A hot wallet is connected to the internet. A cold wallet, considered a safer and more secure option, is offline.
You can use cold wallets to store your private key on a hardware device, where it can’t be accessed by unauthorized parties.
Just remember that the seed phrase for your wallet is extremely important to keep safe.
- Protect your internet connection
There’s an extra layer of protection you should employ to protect your investments: anytime you use your crypto online, you should use a VPN to secure and encrypt your internet connection, making it harder for others to hack into your accounts.
Encrypting your data ensures no one else can see your data and ensures your crypto purchases are completely anonymous.
- Start slow and focus on learning
The blockchain, hot wallets, non-fungible tokens. There’s a lot to learn when it comes to cryptocurrency investing. It’s important to take things slow and, especially at first, focus on learning. Even if you’re already well-versed in the world of stocks and investing, cryptocurrency can be a little confusing.
There are also a lot of coins out there. But just because you’ve heard about them doesn’t automatically mean you should invest in them. Do your research and choose a cryptocurrency that has a solid road map and strong plans for development.
Choosing a cryptocurrency exchange like Hubkoin can help. Hubkoin aims to not only help you invest but also teach you how to do it safely and confidently.
There you have it! Five steps for safely investing in cryptocurrency in Canada. Follow these steps and, before you know it, you will be safely buying yourself a satoshi of Bitcoin, selling some Dogecoin and transferring the profits to your bank account.