The ultimate guide to start your first cryptocurrency investment under $10
Have you heard about Cryptocurrency (especially Bitcoin) and curious about how to start investing in it? For those who are new to it, A cryptocurrency (or “crypto”) is a digital currency that can be used to buy goods and services but uses an online ledger with strong cryptography to secure online transactions.
There is a lot of volatility in crypto investment but can give a decent return in the long run (Bitcoin at ~ $34k at the time of writing). Ideally, you should diversify your financial portfolio so it’s a good idea to invest some percentage of your portfolio in crypto assets. As a starting point, you can start with a little investment ( $10 or more), and losing the entire fund shouldn’t hurt your financials much. This article shall help you with your first investment into the crypto world.
This article is not financial advice so please do your own research or consult your financial advisor before investing in it. I have been investing in the crypto market since March 2020 and the article is based on my own experience.
Open an account with a centralized exchange and complete your KYC.
There are multiple ways to buy/sell cryptocurrency and I feel that that opening account with exchange is the easiest and cost-effective way. The trading fee is relatively lower and it gives you a good head start into crypto land.
There are multiple crypto exchanges to open your account. You need to link your bank account with the exchange so that you can transfer the funds between an exchange and a bank. I would advise getting KYC done before depositing any funds into these exchanges. You can’t withdraw funds or have limited account activities if the KYC is not completed. Though there are some exchanges where KYC is not required. Here are the two known exchanges:
Wazirx.com (if you are from India).
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Buy a cryptocurrency like BTC, Eth, Dot, Polygon, or ADA
Once the KYC is done then transfer your first amount to the exchange, keep the amount as smallest as possible. Ideally, the amount should reflect in your account within a few minutes.
Now you have your $10 in your account then you can start buying any of the coins mentioned in the exchange. As a starter, it is always recommended to go with the top 10 coins so divide the investment into two-three coins. Let’s say you buy BTC(Bitcoin), ETH(Ethereum), and BNB(Binance)/Polygon(Matic). You pay a nominal fee for these transactions and now you own these cryptos.
Some people would like to keep their coins in the exchanges and let them grow from here while other people would like to earn extra for these coins. So the next step is to add liquidity in your pool and stake your crypto (just like earning interest on your deposits) and earn a passive income.
Liquidity pools are one of the foundational technologies behind the current DeFi ecosystem. They are an essential part of automated market makers (AMM), borrow-lend protocols, yield farming, synthetic assets, on-chain insurance, blockchain gaming — the list goes on. In itself, the idea is profoundly simple. A liquidity pool is basically funds thrown together in a big digital pile.
The First step to create a passive income is to create your own crypto address using Metamask Wallet
The crypto wallet is a way to create your own wallet (unique address) and you can store your cryptocurrency in it. You can control your crypto and in theory, no one can access your wallet without your permission. So to create your first wallet, you need to install the MetaMask extension on your browser.
You need to create your account using the meta-mask extension. Please write down the 12 words(Seed Phrase) in a secure place. You can use a notebook for saving the Seedphrase. You need to remember that these are the key to your virtual locker and if the key is lost, you can’t access your crypto.
Here is a great tutorial to create an account on MetaMask
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Transfer coins to your meta mask address
There shall be a hexadecimal address when you create your account on the MetaMask. Now you need to move your coins from your exchange to your crypto wallet. This shall allow us to earn passive income from our coins. Normally, the fee to transfer the funds using Ethereum is relatively high, so it’s better to use Binance Smart Chain or Matic Chain to transfer your funds.
Here is a very good video to transfer your crypto from Binance to BSC
Add liquidity — Pool the coins
Once the coins are in the account then you stake them after making a pool of two coins. You can create a pool of these coins using a BSC platform like Pancakeswap or use a Matic platform like QuickSwap. You can earn a passive income by staking the coins.
Here is a good video explaining Adding liquidity pool
Use a yield aggregator to maximize your passive income
Why do we need it? We can use a yield aggregator(auto compounding) to automate the process of staking and maximize the returns. You can use an aggregator like Eleven. Finance or AutoFarm or Beefy.finance
Here is a good video to stake token on eleven.finance
Learn more about crypto for future investment
There are many good youtube channels out there to learn about crypto investment. Start investing 15–30 mins daily on these channels and find more information about the crypto. Don’t blindly follow the recommendation and do your research before any investment into a new coin.
The Coin Bureau is your go-to informational portal to the Cryptocurrency galaxy. Guy, the Crypto guy is the captain of…
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