We are constantly seeking ways to invest and grow our money. One of the numerous ways in this day and age is by investing in cryptocurrencies. They are volatile but not to worry, there are ways to go about it to achieve the best results. That is what will be addressed in this article.
On a Smartpreneur Live session with investment expert and Founder of Wealth Motley, Solafunmi Sosanya, cryptocurrencies were explained and simplified
According to Solafunmi, people do not have to understand cryptocurrencies because it almost doesn’t make sense to us as individuals. The best thing to do is to get started and learn as you go, understanding comes with experience here.
A major point to note especially for beginners is that cryptocurrencies are really volatile. “A particular cryptocurrency could be up by 30 percent this minute and in the next, it is down by 40 percent but then there is a lot of money in it once you understand how it works” said Solafunmi.
With the recent market dip, Solafunmi expressed that now is the best time to invest in cryptocurrencies. “Cryptocurrency can be very volatile. If you are buying now, you’re coming in at a great time. When something is down, the probability of it going up a lot higher is always there but I will advise that people buy the long-term cryptocurrencies, the large cap type. These are the ones that more people have invested in. They are the older ones such as Ethereum and Bitcoin. Put your money in these and they will do well no matter what. The smaller ones might not do as well”
You cannot lose with long-term cryptocurrencies and those that are always being bought and the fact that people will use them in the future.
If you are wondering the kind of investments to make as regards cryptocurrencies, Solafunmi advised long-term over short-term, especially for busy people. Cryptocurrencies fluctuate. Investing in the long-term will not bother you but the biggest mistake people make is that they jump right in when it’s going up and are quick to back out when it is down.
There are only 21million Bitcoins that can be mined in the world, more will not be made, and not all of it is in circulation. Unlike the Naira, more can be minted when there is a shortage. But in the case of Bitcoins, everyone will have to share from the 21million available to the world and as a result, supply will eventually be limited, and coupled with the ever-increasing demand, Bitcoin will become even more valuable.
There are different types of Cryptocurrencies. Solafunmi recommended four that should be invested in preferably for a long-term, with great use case:
- Bitcoin, the oldest and first kind of cryptocurrency
- Ethereum which is the second-largest cryptocurrency after Bitcoin and the most actively used blockchain
- Ada which is listed in exchange as Cardano.
- BNB which is the Binance coin
Speaking of Dogecoin and its investment-worthiness, Solafunimi said: “Dogecoin started as a joke. There are a lot of coins, in the world of cryptocurrency, that are just for fun with no use case, created by a bunch of people who just decided to create a coin. But it has transcended with people like Elon Musk who have gotten behind it and it is beginning to grow but will I invest in Dogecoin for the future? Personally, no.”
In conclusion, Solafunmi stated that consistency is a key factor when investing. Be consistent with your investments.”Don’t think your money is small. You’ll be amazed at what you will get when you put away N20,000 every month. In a year, you would have saved N240,000 but if you had invested right, N240,000 could have easily amounted to N340,000”. This goes to show that when you invest wisely, money comes back to you, one way or another.
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