In times when everyone talks about cryptocurrencies, there are many who are left out because they do not really understand what it is about. They are a new concept, offering an interesting investment opportunity, albeit with high volatility, and it is not advisable to bet on an instrument with these characteristics without knowing what it is about.
To avoid that, Hanna Schiuma, VP of Wealth and Community at Ank, an app for money transfers between the bank and virtual accounts, explains in a dialogue with us what they are, how and how much to invest and which ones to choose.
What are cryptocurrencies?
” Cryptocurrencies are an innovative form of digital money, the native money of the Internet and, just as the web is a protocol for transmitting information, we can think of crypto as encrypted and open digital protocols to transmit value, ” begins Schiuma.
These assets use Blockchain technology, which Schiuma describes as “a kind of immutable digital ledger,” to settle their operations. And he points out that there are two main types of cryptocurrencies: volatile, which are not linked to a physical asset, and stable, the latter generally have a price tied to a hard currency, such as the dollar.
Faced with the question that every new investor asks himself or should be asked, which is why bet on these assets? “.
It also explains that cryptocurrencies are an easy and cheap way to access digital assets that can be exchanged on global markets, known as exchanges.
“Some investors see Bitcoin as a hedge to inflation and global uncertainty, despite its high volatility. Some even compare it to gold and call it ‘digital gold,'” says Schiuma.
What to take into account to start investing?
When listing which elements or main keys must be taken into account when investing in cryptocurrencies, the executive mentions:
-It is advisable to invest in crypto that has the highest market capitalization, such as Bitcoin, Ether, USDC or DAI and that are supported by networks or verifiable projects, in constant development.
-He warns that there are some cryptocurrencies that, despite their high capitalization, present risks for the investor, such as dogecoin.
-And it advises to buy in exchanges legally authorized to operate, “since operations between people known as P2P, being completely deregulated, present a greater risk for inexperienced users, although also a greater degree of freedom.”
Which ones to choose and how to do it?
In the same sense, Schiuma warns when thinking about which cryptocurrencies to choose to start with, that, when choosing between cryptos that trade with high volatility, the important thing is not to invest more than one is willing and can lose.
However, he assures that, “in the case of stable-coins, the investment is safer because its value is tied, for example, to the dollar.” Thus, it indicates that the choice depends on the risk appetite of each investor and the information that the user incorporates from reliable and suitable channels.
Another common question that arises among newbies in the crypto world is how much money to invest to start and how to go about taking the plunge. “The amount always depends on the volume of savings that the investor has,” the Ank specialist responds in this regard.
According to his vision, it is advisable to start small to test and insists that it is advisable to always resort to exchanges authorized to operate in Argentina. In this sense, he mentions Bitso, Buenbit or Ripio as some examples of reliable companies.
However, it recognizes that, for the moment, access to crypto still presents some difficulty in the user experience, but ensures that the members of the industry are working to develop simpler, more robust and attractive products that solve the financial life of the users.
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