How to invest in cryptocurrency to ‘hedge against inflation’ – tips from experts | Personal Finance | Finance
“Unlike a company share price, which is directly related to the company’s profits and performance, cryptocurrencies are basically worth whatever the market will pay for it.
“As an example, in November 2021, investors loved Bitcoin and were prepared to pay nearly $70,000 per coin, but by June this year, the price had fallen by 75 percent – without any significant change in the underlying fundamentals of the industry.”
So, Mr Kopelman advised: “In order for people to responsibly invest in crypto, it’s imperative that they understand what they are investing in.
“Promises of sky-high returns and low fees should be a big red flag – if it sounds too good to be true, then it probably is.
“False guarantees that you ‘can’t lose money’ or feeling pressured by a sense of urgency that you ‘must invest now’ both indicate you are being led into a scam.
“Investors should always check that they can verify the information of the company and owner before making a transfer; only dealing with reputable, registered companies that only list cryptocurrencies that have a clear track record and can be considered as a long-term investment.”
Where to start?
Investing in Crypto is also more complex than buying shares or other traditional assets, according to Mr Osborne.
He said: “The first step is to select a broker or Crypto exchange to enable you to buy your cryptocurrency. Brokers can make the buying process easier, but the cost of using a broker is usually quite high – either through direct fees or by executing your trades at a more expensive price.
“Crypto exchanges such as Binance or Coinbase provide platforms where buyers and sellers can trade cryptocurrencies. Some exchanges only allow you to buy Crypto using other Crypto, so make sure the broker allows you to buy Crypto using pounds or dollars (called FIAT currency).”