CryptoHow To

How to Secure Cryptocurrency Investments: Beginners Guide In 2024

What is Basically Trading? 

The act of purchasing and selling goods is known as trading, and it is a fundamental economic notion. These could be products or services, in which case the buyer compensates the supplier. In other situations, the deal may call for the trading partners to exchange goods and services. The worldwide cryptocurrency market has expanded at an astounding rate since the creation of Bitcoin in 2009, luring investors from all walks of life. The cryptocurrency markets, however, are still in their infancy; they are hardly regulated, exceedingly volatile, and a haven for scammers and other crooks. 

The assets that are traded on the financial markets are referred to as financial instruments. Stocks, bonds, Forex currency pairs, options, futures, margin products, cryptocurrencies, and many other financial instruments are examples of these. Don’t worry if you are unfamiliar with these terminology; we will define them all later in this essay. Short-term trading, in which participants actively enter and exit positions over brief time periods, is referred to as trading.

This assumption is a little bit false, though. In reality, the term “trading” can be used to describe a wide variety of various tactics, including swing trading, day trading, trend trading, and many more. But do not fret. Later, we’ll examine each of them in further detail. 

How Do You Invest? 

Allocating resources (such as capital) with the hope of making a profit is called investing. This can involve investing money to launch and fund a company or purchasing land with the intention of selling it at a profit later. In the financial markets, this often entails purchasing financial instruments in anticipation of subsequently selling them for a profit. 

The idea of investing is based on the expectation of a return or return on investment (ROI). Investing often takes a longer-term approach to wealth accumulation than trading does. An investor’s objective is to accumulate wealth over an extended period of time (years or even decades).  There are several ways to achieve this, but most often, investors employ fundamental variables to identify potentially profitable investment possibilities. Investors typically aren’t concerned with short-term price swings because of the long-term focus of their strategy. As a result, they usually maintain a passive attitude without giving short-term losses any thought. 

What Distinguishes Investing From Trading? 

Profits are something that both investors and traders want to achieve in the financial markets. However, they approach this objective in quite different ways. Investors typically aim to make a profit over a longer time frame, like years or even decades. Investors typically want higher returns on each investment since they have a longer time horizon.  

On the other hand, traders attempt to profit from the market’s turbulence. They take more positions and leave them more frequently. Since they take numerous positions at once, they might seek lesser returns on each trade. 

Which is superior? Which one would be better for you? You get to decide that. You can start learning about the markets on your own, and then get experience by doing. Which one best fits your financial objectives, personality, and trading profile will become clearer with time. 

Fundamental Analysis (FA) – What is it? 

A technique for determining the value of a financial asset is fundamental analysis. To assess if the value of an item is fair, a fundamental analyst examines both economic and financial aspects. These may include macroeconomic factors like the overall health of the economy, market conditions, or, if applicable, the operations of the business linked to the asset. Macroeconomics’ leading and trailing indicators frequently track this. 

Analysts seek to identify whether the asset is undervalued or overvalued after completing the fundamental examination. This conclusion can be used by investors to guide their decisions. 

For cryptocurrencies, fundamental analysis may also consider on-chain metrics, a newly emerging area of data science that focuses on open blockchain data. The network hash rate, top holders, number of addresses, transaction analysis, and many more factors are examples of these indicators. On public blockchains, there is a wealth of data that experts may use to build sophisticated technical indicators that gauge various aspects of the network’s general health. 

Fundamental analysis is frequently employed in the stock market and on foreign exchange, but it is less appropriate for cryptocurrencies currently. There just isn’t a defined, all-inclusive framework for evaluating market valuations for this asset class because it is so new. Additionally, a lot of the market is influenced by rumors and stories. As a result, the impact of basic factors on the price of a cryptocurrency is often very small. However, as the market evolves, more precise approaches to considering the price of cryptoassets might emerge. 

Technical Analysis (TA) – What is it? 

Technical analysts employ a distinct methodology. The fundamental tenet of technical analysis is that past price behavior may provide clues as to how the market will probably behave going forward. Technical analysts don’t try to determine an asset’s intrinsic value. Instead, they analyze past trading activity and make opportunities-based decisions from there. This can involve examining price movement and volume, as well as using technical indicators, chart patterns, and a variety of other charting tools. This analysis’s objective is to assess a market’s strengths or weaknesses. 

Having said that, technical analysis can be used for more than just forecasting the likelihood of future market moves. The framework can also be helpful for managing risks. Technical analysis makes managing trades more defined and measurable because it offers a paradigm for understanding market structure. The first step in controlling risk in this situation is to measure it. For this reason, not all technical analysts are purely traders. Technical analysis might only be used by them as a foundation for risk management. 

Technical analysis is a practice that can be employed in any financial market, and it is very popular among cryptocurrency traders. However, is technical analysis effective? Well, as we’ve already indicated, speculative activity is largely responsible for the cryptocurrency markets’ current valuation. Because they can succeed by just taking into account technical criteria, this makes them the perfect playing field for technical analysts. 

Crypto Safety: The Fundamentals of Keeping Your Crypto Safe: 

It takes deliberate effort to protect your digital assets, especially your cryptocurrency. You must take preventative measures since, as we’ll explore later, it will be challenging to recover your cryptocurrency if it is taken. 

Here are some fundamental guidelines for keeping your cryptocurrency safe. If any of these suggestions are unclear, don’t worry; we’ll go into more detail later. 

  • Make use of two-factor authentication (2FA) for your exchange and wallets. 
  • From your exchange, transfer your cryptocurrency to a wallet. 

On a sheet of paper, jot down the key phrases for your wallet; nevertheless, keep it somewhere secure. 

  • Always use secure passwords. 

Create a special password for your wallet that is in no way related to any other passwords you use. 

  • If you can, keep your cryptocurrency in a hardware wallet. 

Steer clear of phony applications and websites. Crypto-related email files should always be treated with caution. 

  • Put your seed words nowhere online. 

Whenever possible, stay away from public WiFi; otherwise, use a virtual private network provider. 

How to Spot a Scam on a Cryptocurrency Exchange and What to Avoid: 

As you can see, there are many various things you can do to secure your digital assets, but selecting a reliable and trustworthy cryptocurrency exchange may be the most crucial. In the end, it’s where you’ll purchase and store the cryptocurrency you trade. 

Examples of Safe and Trustworthy Cryptocurrency Exchanges:

Fortunately, there are many trustworthy, legal cryptocurrency exchanges. Coinbase and are a couple of the names that come to mind. I’ll suggest one more that we’ve used firsthand: Kraken. 

Kraken, which was founded in 2013, offers solid security and protection for your cryptocurrency assets.  

Cold Wallets:

95 percent of Kraken’s cryptocurrency holdings are kept in cold wallets, which are secure and out of hackers’ reach. out of hackers’ reach. 

Security Measures :

For the servers, this includes cages, guards, and physical surveillance cameras. Although Kraken won’t reveal where the servers are physically located, it assures users that access to the servers is “strictly controlled.” 


Two-factor authentication, or 2FA, safeguards user accounts from unauthorized access. 

Kraken offers a bug bounty program and hires security professionals to look for ways to breach the platform’s security in the hopes that flaws can be discovered and fixed before the bad guys uncover them. 

Security and Compensation: 

You should also think about how secure an exchange is before using it. Bitmart, a cryptocurrency exchange, experienced a cyberattack in 2021 and lost more than $200 million worth of cryptocurrencies.   

Crypto.Com was also Compromised, Resulting in a $35 Million Loss:

Both Bitmart and have pledged to compensate customers who lost money. Other significant exchanges, like as Binance, Bitfinex, KuCoin, and others, have been compromised in the past. However, each of these exchanges paid back users who had money lost. Finding out how much of the exchange’s cryptocurrency is kept in “hot wallets” connected to the internet is one technique to protect against security issues. 

Less cryptocurrency will be kept in these wallets by the best exchanges. The remaining data will be kept offline. This will reduce losses in the event of a significant hack. Utilizing only exchanges that pay consumers back for hacking is an additional measure of safety. 

Using 2FA to Secure Your Exchange Account: 

Selecting a trustworthy exchange will aid in defending you against attacks that are the exchange’s fault. You won’t be compensated, though, if your account is compromised without the exchange’s fault. 

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