Summary

Bitcoin may be the most popular cryptocurrency among investors, but it's not the only option. When buying cryptocurrencies, altcoins are also ideal products to enrich your investment portfolio.

In addition, when choosing a cryptocurrency, you should also consider whether you prefer long-term investment or short-term trading, and how much risk you are willing to accept. And what kind of analysis method you want to adopt. You can choose between fundamental analysis or technical analysis, or a combination of both. Once you know these points, you can invest or trade on Binance.

Introduction

Investing in Bitcoin and other cryptocurrencies is an excellent way to diversify your investments, but the potential for high risks cannot be ignored. Therefore, before starting your investment journey, you must understand some basic concepts and principles. This is far more complicated than buying a cryptocurrency and then waiting for the price to increase.

Informed investment decisions are inseparable from careful research and analysis. Ideally, you should tailor your strategy to your personal risk profile and invest no more than you can afford.

Bitcoin or altcoin?

For cryptocurrency beginners, Bitcoin is often the first port of call for investment. It is the most famous blockchain project and the largest cryptocurrency by market capitalization.

In addition, there are thousands of cryptocurrencies (altcoins), some of which are built on exclusive blocks chains, others use existing networks (such as Binance Smart Chain or Ethereum). Each project proposal is different and has its own potential risks and advantages.

Whether you want to invest in Bitcoin alone or buy a combination of crypto assets, the decision is entirely yours. Some people only invest in Bitcoin, while others diversify by holding altcoins.

On the one hand, asset diversification eliminates the risk of investing in a single project. If you hold multiple assets, you won't necessarily suffer a huge loss even if one of them plummets. On the other hand, there are investment risks in altcoins, and there are endless scams. Therefore, you must do your own research before taking the plunge.

There are so many types of tokens in the market that people often don’t know where to start. Please read "Besides Bitcoin, Which Digital Currency Should You Buy?" ” to learn more about the different types of cryptocurrencies.

Short-term trading or long-term investment?

When deciding which cryptocurrency to buy, you should also consider whether your purpose is investing or trading. The two are easily conflated, but they are not the same. Simply put,investing is buying an asset and holding it for the long term. This strategy does not involve too much time and energy, and the risks faced are significantly reduced.

In contrast, trading makes short- and medium-term profits through regular buying and selling. Becoming a great trader takes a lot of time and practice. Traders need to develop more complex strategies, invest more time in analyzing markets and trading platforms, and take greater risks. They also need to consider the cost of investing in transactions and transaction fees.

Don’t forget that cryptocurrency markets can sometimes be more volatile than traditional markets. Traders make money through volatility, but high volatility means high risk.

For beginners, investing is by far the easiest and safest option. Investors’ investment horizons are typically measured in years, and short-term price changes are inconsequential. Investment decisions are primarily based on the fundamentals of the token (the soundness of the project and its long-term prospects).

Some people like investing and don’t worry about short-term fluctuations. Others choose to trade frequently to make the most money from it. There are also people who engage in both investment and trading at the same time. Everything depends on the specific strategy, personal circumstances and risk tolerance.

The decision-making power is also in your hands, but the funds invested or traded must not exceed personal affordability.

In summary, to learn more about cryptocurrency day trading and swing trading, please read our Cryptocurrency Trading Beginners Guide The Scholar's Comprehensive Guide.

Comparison of fundamental analysis and technical analysis

Analysis is the key to determining high-quality investments. The type of analysis mainly depends on whether the goal is investing or trading, but both fundamental and technical analysis can play a role.

As mentioned above, short- to medium-term price changes have little impact on investing (or holding for the long term). Generally speaking, long-term investors pay more attention to the intrinsic value of a token or project, which is closely related to fundamental analysis (FA).

Fundamental analysis evaluates asset potential based on the entire project, including utility, team, white paper, development, marketing, management, reputation, long-term goals and other factors.

In contrast, technical analysis (TA) considers historical price trends and trading volume data to try to predict future price trends. This technique usually uses K-line charts and TA indicators (such as moving averages and trend lines).

Buy your first Bitcoin on Binance

Buying Bitcoin and altcoins is easy on the Binance cryptocurrency exchange.

1. Visit the Binance homepage and click [Register] in the upper right corner to create an account.

2. Verify personal Binance account. The KYC process helps verify your identity and is a legal requirement.

3. The easiest way to buy cryptocurrency is through the flash exchange function using a credit or debit card.

You can also use the transaction view to transfer fiat currency from your personal bank account to purchase digital assets. For a complete explanation of both methods, read the Binance Beginner’s Guide.

Buy your first altcoin on Binance

You can build a diversified portfolio by buying altcoins like Binance Coin, which is a versatile of utility tokens.

1. Log in to your Binance account, move your mouse to [Buy Coins] and click [Credit/Debit Card].

2. Next Choose from multiple cryptocurrencies in one step. The chosen fiat currency must also be accurate. In this example, we use Euros to buy Binance Coin.

3. Fill in the bank card details, then buy the cryptocurrency and wait for it to arrive.

What should I do with cryptocurrency?

When investing in or trading cryptocurrencies, common strategies include buy, sell, and hold. For long-term holding, you can choose to keep your cryptocurrencies in your Binance account or transfer them to an external cryptocurrency wallet.

If you save cryptocurrencies in a personal Binance account, it is recommended to try the various solutions offered by Binance Finance. You can think of it as a savings account, earning passive income while holding cryptocurrencies.

Summary

It takes time to master investing or trading in cryptocurrencies. Improving your knowledge is a great way to reduce your overall investment risk and help you make more informed decisions. It’s extremely easy for bad market sentiment to trigger panic selling, but the chances of this happening are significantly reduced as long as you understand investing and trading well. To learn more, read "The Psychology of Market Cycles."