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Not sure what to do with your cryptocurrencies? Let these 3 experts help you
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However Investing is a centuries-old traditionCryptocurrency is a relatively new asset class that many have yet to master. Whether you have tons of unrealized gains in your crypto portfolio or just a few small-cap coins, you should always manage your holdings wisely. Here’s Some tips from crypto experts that can help you.
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Use a trusted Exchange
You’ve probably heard of many fraudulent exchanges that have gone bankrupt and taken away crypto investors’ money. That’s why it’s important to use reliable and reputable exchanges for your transactions. Check the security features, user reviews, and regulatory compliance to ensure the trustworthiness of the exchange.
Learn more: In 5 years, these 2 stocks will be worth more than Apple
Secure your investments with cold storage
Storing your cryptocurrencies in cold storage is one of the safest ways to protect your investments. Keeping your digital assets offline minimizes the risk of hacking and unauthorized access.
Optimizing unrealized gains
Mitch Naumann is a cryptography expert and co-founder of Cryptoquote.ioHe suggested that people with substantial unrealized gains in cryptocurrencies leverage their equity through asset-backed loans. He said: “If a digital asset investor needs liquidity and is making gains in the market, they can consider using their assets as collateral to secure a loan. This approach provides liquidity without the need to sell their cryptocurrencies.”
Understanding the tax implications
Take the time to understand the tax implications of owning and trading cryptocurrencies in your country. Prioritize planning and reporting your crypto activities to avoid potential legal and financial issues.
Shirin Bucknam is the founder of Crypto Witches Club“Buying cryptocurrencies has no tax implications, but trading or selling cryptocurrencies does! Cryptocurrency taxes can be confusing, especially if you’re a more advanced user and stake your cryptocurrencies, receive airdrops and rewards, or trade NFTs. Companies like CoinTracker are essential to ensure you’re compliant with the tax rules (and that any carryover losses are accounted for),” she said.
Don’t Underestimate Lesser-Known Altcoins
Naumann said: “Never say never when it comes to cryptocurrencies that currently have no utility or volume, as their value can skyrocket unexpectedly. While it’s generally wise to avoid betting on any cryptocurrency outside the top 20 by market cap, maintaining a small, diversified portfolio of lesser-known cryptocurrencies can sometimes generate surprising returns.”
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While he doesn’t recommend overloading your wallet with these coins, there is a smart way to acquire them.
“It should be noted, however, that successfully investing in these coins requires a lot of research and a solid understanding of market trends to identify potentially hidden gems,” he explained.
Beware of scams
Rosco Kalis is the founder of Revoke.casha crypto security product. He noted: “Scams and hacks are rampant in the cryptocurrency space, with billions of dollars lost each year to scams and hacks.”
“One of the most important things to watch out for is making sure you don’t lose your hard-earned crypto to hacks and scams. I would advise readers with large amounts of crypto to educate themselves on best practices for staying safe in crypto, such as hardware wallets, managing token approvals, and recognizing potentially dangerous crypto interactions,” he added.
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This article was originally published on GOBankingRates.com: Not sure what to do with your cryptocurrencies? Let these 3 experts help you