How to choose a cryptocurrency to invest in

There are currently around 10,000 cryptocurrencies that are actively in use. So the question becomes: how to pick a cryptocurrency to start trading? That’s an important question to ask and shows that you are approaching the world of crypto trading with caution and care. 

Here we will share with you 3 points to consider, so you can start trading with confidence. 

Tip 1: understand the different uses of coins

Each cryptocurrency serves a different purpose. Here are the main ones:

• Investment: crypto is often used for investing, either long-term, where traders buy and store coins like Bitcoin hoping their value increases over time, or short-term, where highly volatile cryptocurrencies are traded to profit from price changes, though this carries higher risk.

• Payments: some cryptocurrencies, like Bitcoin (BTC) or Litecoin (LTC), are mainly designed to work as digital money, allowing traders to send and receive payments across borders quickly and safely.

• Smart contracts and DeFi: smart contracts are digital agreements that run automatically when certain conditions are met. This powers DeFi (Decentralized Finance), allowing traders to lend, borrow, trade, or earn interest without the need to use banks. Ethereum (ETH) and stablecoins like USDC and USDT are commonly used in DeFi due to their stability.

• Utility tokens: this is when cryptocurrencies give users access to a specific platform, application, or service. For example, some video games use crypto to allow players to purchase items in-game. Utility tokens can also be used to grant access to certain softwares and apps.

Tip 2: review the coin’s details

Now that you have a better idea of how you want to use your crypto, you can look into the coin’s details. This will help you gain a better understanding of how the coin is doing in the market. You can start by visiting our Market page to get a glimpse into the coin’s history, its market cap (size of the coin in the market), circulating and maximum supply, among other things. This can also build your trust in the coin’s reliability and assess its risk factors.  

Tip 3: trade safely

As mentioned above, awareness and research are essential. When you make an informed decision, you avoid falling for scams or schemes designed to exploit lack of knowledge like rug-pulls and pump-and-dump schemes. Here are additional tips on how to navigate the world of crypto safely.

Additionally, as you start trading, your job is to ensure that your trades are conducted in a safe environment. You should always trade in licensed and regulated exchanges like Rain, to keep your funds and information safe. 

These are a few methods that can help you kickstart your crypto journey, and Rain will continue to be with you the whole way. Our support team is available 24/7 to personally answer any questions or concerns you may have. We have also created a comprehensive list of guides on how to trade on Rain that you can access if you need guidance.