Six tips to invest in cryptocurrencies safely

According to a study by United Nations Conference on Trade and Development (UNCTAD), 3.7% of Peruvians already own digital assets, placing Peru in 18th place in the top 20 of the countries with the highest adoption of digital money. During the last 15 years, the country has had one of the fastest growing economies in Latin America; however, the sociopolitical turmoil and the increase in inflation throughout the year have worried Peruvians, leading them to seek options for digital investment as a source of reserve value, having cryptocurrencies as an option – among investors aged 25 to 45 years.

For Adriana Cuéllar, country manager of Libertex, investment in cryptocurrencies has aroused interest in some private investors because its decentralization is a strength in the face of currency devaluation. “Currently, the list of cryptocurrencies has had a considerable increase. Since bitcoin was the first cryptocurrency to operate in 2009, more than 10 years have passed, and there are currently more than 8,000 cryptocurrencies available on the market.comment.

The figures show that Peru would aim to become one of the countries in the region with the highest adoption of cryptocurrencies, climbing towards the leadership positions that are currently held by countries such as Brazil and Colombia. A report by the consulting firm Sherlock Communications indicates that, since 2020, Peru has registered an 18.3% increase in the use of cryptocurrency wallets.

A report by the Asian firm Triple A revealed that more than 1.2 million Peruvians already own cryptocurrencies, equivalent to at least 3.74% of the Peruvian population having “crypto assets” in their possession. “The trend, towards the end of this year, would be for this figure to change radically, taking into account the greater interest that citizens have regarding digital assets and the new ways of investing”Cuellar maintains.

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Invest in cryptocurrencies: how to do it safely?

The cryptocurrency market is going through a stage of accumulation after a huge drop at the beginning of 2022. The Libertex specialist points out that there are many myths surrounding the use and acquisition of cryptocurrencies, such as that by investing in them, the user will obtain large Profits; or, on the other hand, that this would be a scam. In that sense, she offers the following recommendations to invest -in a simple and safe way- in cryptocurrencies:

Investigate the product in which you are going to invest. To be a good investor, you must keep up with trends and learn from experts what is happening in the world of cryptocurrencies, as well as know the charts, metrics and factors with technical and fundamental analysis. What matters is to assess which features best suit the user’s needs.
Choose a secure and reliable exchange platform. When exchanging fiduciary money for cryptocurrencies, you should choose an exchange platform -better known as an ‘exchange’- or a CFDs broker that is reliable, profitable and handles the cryptocurrencies that interest the investor.

“There are hundreds of platforms and exchanges to invest in cryptocurrencies. Whatever your decision, make sure you read the legal terms carefully before starting to invest in any platform”says the specialist.

Choose a ‘wallet’ or purse. The ‘wallet’ is the digital wallet in which the cryptocurrencies are stored. It is important to have a hardware wallet, an electronic device that stores cryptocurrencies offline. The characteristic of this ‘wallet’ is that the user has the keys (some exchange platforms guard the cryptocurrencies in the application itself) and it is not permanently connected to the network, so they will be safe from a cyber attack.

Cryptocurrency mining like Bitcoin consumes incredible amounts of electrical energy. (Photo: Freepik)

Certainly, many investors store their money in the hardware wallet and only withdraw the funds intended for trading. Although there are many options, the investor should choose one that is easy to use and provides the security they need.

Set a loss cap amount. Being a particularly volatile investment, we must monitor it closely, so it is not recommended to invest an amount that you will need in the short term or that, if a downtrend occurs, affects your economic stability. Once the amount is decided and the best time to invest is evaluated.
Decide which cryptocurrency to invest in. Before starting to invest in a cryptocurrency, it is essential to ask yourself: how many countries recognize and accept it as a means of exchange? What is its level of security? What is its history? How long has it been in the market? Once this information is known, the panorama will be clearer to choose the ‘cryptoactive’ of preference. “If after your investigation you still have doubts and want to rely on the opinion of experts, you can investigate on our platform. We have experts who can help you and guide you to make a safer and more accurate decision”maintains the specialist.
Verify the security of the platform. It is essential to make sure that the platforms on which you operate are totally secure; To do this, it is recommended that you choose a complex and unique password on all the platforms you use to operate and store your cryptocurrencies.

“Cryptocurrencies have proven to be a reliable medium of exchange, the use of which will be inevitable in the future. It is likely that the volatility of the market can be scary for many people when investing digitally, so being properly informed is vital to take the first step”concludes the specialist.