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How to Invest In Cardano In 2021

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Cardano is a major cryptocurrency project that runs on an open-source basis, to provide a public platform for smart contracts. It also features a token that goes by the name of ADA. The development of the Cardano project is overseen and supervised by the Cardano Foundation, which is based in Zug, Switzerland.

Cardano began development in 2015, before finally being launched two years later. Charles Hoskinson, a co-founder of Ethereum and BitShares, was involved in the cryptocurrency token. The market capitalisation of Cardano has increased massively during its lifecycle, with the blockchain associated with Cardano considered to be particularly sophisticated. This guide will discuss how to invest in Cardano and will also list some popular platforms for investing and trading this cryptocurrency.

4 Ways to Invest in Cardano

There are a variety of ways to invest in Cardano, but in this article, we’re going to look at four of the most commonly used and prominent methods. All these methods can be used with or without leverage. 

1. Buy Cardano Through an Exchange

It is firstly possible to buy Cardano via a range of cryptocurrency exchanges. These are now widely available on the Internet, particularly as trading online has become popular. 

While digital exchanges tend to offer storage facilities, it is still advisable to download and use a hardware wallet for the storage of your crypto assets. With this in mind, Cardano is compatible with cryptocurrency wallets including the following:

There are other software wallets available but generally, hardware wallets are considered the safest and secure option.

Before you can purchase crypto via an exchange, it is first necessary to register for your exchange of choice. The registration process is not particularly arduous, but it will require you to have your identity confirmed by its developers. This is a requirement under the Know Your Customer regulations, which are also used as part of bank customer identity verification practices.

As a general rule, registration will simply require government identity documentation and proof of address to be submitted. As the space has become more regulated, such confirmation of identity has become mandatory.

Our recommended exchange

There are a huge amount of exchanges available on the Internet, but before committing to one of these platforms it is advisable to read through our recommendations.

1
Min. Deposit
$50
Exclusive promotion
Our score
10
Accepts customers from the USA
Offers 15 crypto coins to buy&sell including BTC, LTC, ETC, NEO and more
Trade on the world's leading social trading and investing platform
Start Trading
Payment Methods:
Wire Transfer, Bank Transfer
Full Regulations:
CySEC, FCA

2. Buy Fractions of Cardano Through an Exchange

It is also possible to purchase fractions of cryptocurrency via exchanges. But this is only usually possible when the cryptocurrency in question is particularly highly valued. Although Cardano has been a successful token, its price per unit is still relatively low. 

However, in the case of Cardano, you can purchase its units, referred to as Lovelace. This means that you can invest any amount of your choosing in Cardano. 

3. Trade Cardano Through a Broker

Another option for cryptocurrency traders is to invest in Cardano via a broker. While there are many brokers available in the real world, cryptocurrency brokers operate almost entirely online, due to the nature of the medium.

Brokers act as intermediaries between the investor and the market, both conducting trades and also offering advice and services. Brokers must demonstrate excellent knowledge of the cryptocurrency space, while they usually also have official regulation and certification.

At one time, brokers were only generally used by experienced investors, but the boom in internet trading means that they have now become widely available to beginners as well. This means that there are many cryptocurrency traders available on the Internet, and it should be possible for people with all budgets and experience levels to locate someone suitable.

Certainly, although brokers charge fees, they are a good place to start if you are new to the cryptocurrency space since they provide automated trading. 

Our recommended broker

There are a wealth of brokers available online, but before opting for a particular candidate, it would be advisable to read through our recommendation.

1
Min. Deposit
$50
Exclusive promotion
Our score
10
Accepts customers from the USA
Offers 15 crypto coins to buy&sell including BTC, LTC, ETC, NEO and more
Trade on the world's leading social trading and investing platform
Start Trading
Description:
eToro offers a wide range of cryptos, such as Bitcoin, XRP and others, alongside crypto/fiat and crypto/crypto pairs. eToro users can connect with, learn from, and copy or get copied by other users.
Payment Methods
Wire Transfer, Bank Transfer
Full regulations list:
CySEC, FCA

4. Invest in a Cardano ETF

Another option with Cardano investing is to opt for an ETF (Exchange Traded Fund). These can be used to trade cryptocurrency via methods that would otherwise be impossible, including combining a diverse range of cryptocurrencies into one tradable asset. This has often occurred with traditional commodities and equities, but is now also possible with cryptocurrencies.

A cryptocurrency ETF will track one or more digital assets, and its price will be subject to trading in the marketplace, with other investors buying and selling the particular asset. ETFs are often considered a safer way for mainstream investors to enter the cryptocurrency market place, enabling an accessible investment for people of all experience levels. 

When purchasing a cryptocurrency ETF, the organisation managing the fund owns the underlying assets, and that the purchaser effectively takes control of an equivalent amount of the fund without requiring to purchase the individual assets. 

5 Cardano Investment Strategies

There are a wide variety of Cardano investment strategies available, but in this section of the article, we are going to examine five of the most common and popular approaches.

1. Buy and ‘Hold’ 

What is it?

Buying and holding have been used in a variety of stock markets for many decades. And it is certainly a valid approach in cryptocurrency as well.

Investors choosing to buy and hold Cardano would purchase the token, as the name suggests, holding on to the cryptocurrency for a period of time. Buying and holding can definitely be seen as a long-term strategy, intended to benefit from the price discovery of a particular token.

Those choosing a buying and holding mechanism will believe that the underlying fundamentals of a cryptocurrency are sound, and that it will gain in value over a period of time.

What is the benefit of using this strategy?

The obvious benefit of using the buying and holding strategy is that it is a low-maintenance approach. There is no hands-on fiddling with the market required with buying and holding; investors simply identify a valid cryptocurrency, purchase it in suitable quantities, and then wait for the market forces to take effect.

Another advantage of investing in Cardano and other cryptocurrencies via this approach is that it provides investors with a valid physical asset. This is similar to the way that Gold and Silver have been used as stores of value over the years.

2. Day Trading

What is it?

Day trading refers to any form of trading in which stock, commodities, or other assets are purchased and sold within a single trading day. Although day trading can be conducted in any market of choice, it is most commonly carried out in the foreign exchange and stock markets.

Those engaging in day trading place a large number of trades in a short period of time, attempting to predict and benefit from fluctuations in prices and markets. To achieve success, day traders must be extremely well educated, and often benefit from large amounts of leverage.

Scalping and high-frequency trading are among the techniques entered into by day traders with the aim of making a profit. Day trading is ultimately a highly technical form of trading, and one usually involving experts. It is not yet hugely common within the cryptocurrency space, but it is certainly a valid approach.

What is the benefit of using this strategy?

The first, and most obvious, benefit of using day trading is that it enables you to make a profit in an extremely short period. There is also an excitement and adrenaline rush derived from placing multiple trades in a short period, and many people find it fulfilling to actively monitor the market, and profit from this process.

Day trading may also provide investors with better leverage than holding positions overnight, as is commonly conducted in swing trading. But it should also be noted that there are significant risks associated with day trading, and it definitely isn't the most secure form of trading. Day trading is definitely not recommended for beginners; only people experienced in the cryptocurrency space should attempt day trading.

3. Shorting

What is it?

Another trading possibility in the cryptocurrency market is shorting. This is another technique to have been used in other markets for many years, but it is also perfectly valid in the cryptocurrency space.

Shorting effectively means betting against a particular commodity, equity, or asset. When you go short on Cardano, or any other cryptocurrency, you predict that it will decline in value in the relatively short term.

This means that shorting attracts those who are sceptical about the future of cryptocurrencies, and those who believe that the market is currently overvalued. Shorting is also sometimes referred to as short selling.

What is the benefit of using this strategy?

There are a variety of benefits associated with short selling, but the most obvious advantage is that it enables investors to make money even when a particular market is in decline. Indeed, short sellers will only make money when a market does indeed diminish in value.

Another advantage of shorting is that it enables Cardano investors to hedge against other investments. We will discuss hedging in more detail imminently, but effectively this provides a form of insurance.

4. Using a Trading Bot for trading

What is it?

Another possible form of trading that is open to cryptocurrency investors is utilising a trading bot. These are computerised trading programs that execute trades on behalf of investors, and do not require constant human input.

Crypto trading bots are based on sophisticated algorithms, which monitor the market and its movement, and make decisions based on huge amounts of data collated. Algorithmic traders use artificial intelligence and machine learning techniques, which enable the programs to refine what they are doing over a period of time.

A well-developed trading bot will feature effective algorithms, which enables the computer software to understand and respond to the market in real-time, and even learn from its mistakes.

What is the benefit of using this strategy?

Again, there are a few benefits of using trading bots, with the first, and most obvious, being the lack of input required. Once the initial parameters have been set, anyone can use a trading bot without having to enter into the market actively, or monitor the way that markets are operating. The algorithmic traders simply handle everything.

Another advantage of using trading bots is that they remove the element of emotion from trading. Everyone involved in trading has experienced the problem of a market or investment declining, and the negative emotion that accompanies this. Trading bots obviously do not experience emotion, and can therefore process trades without ever being impacted by this human condition.

Trading bots also offer rapid data analysis, and can trade for extremely long hours, well beyond those that will be possible for a human investor. They also enable those with no particular trading knowledge to enter the market without needing to study its mechanisms extensively.

5. Hedging Cardano

What is it?

Another option for Cardano investors is to hedge the cryptocurrency. This involves making trades that provide protection for the investor against an existing market position. While Cardano itself can be used as a hedge, it is more likely that investors would engage in other trades, to hedge against a decline in Cardano.

What is the benefit of using this strategy?

Hedging a crypto such as Cardano provides insurance against the token declining in value in the immediate future. It is, therefore, a strategy that is often implemented by serious and institutional investors. 

Buy Cardano Today!

What to Consider Before Investing in Cardano

There are a range of issues that investors should take into consideration before entering the Cardano market. Many factors can impact the price of Cardano, so in the following section, we will discuss some of the most important aspects of Cardano investment.

Fees

Fees associated with Cardano tend to be extremely low. Currently, every transaction on the Cardano blockchain will bear a fee of at least 0.155381 tokens, along with an extra cost of 0.000043946 ADA per byte of transaction size at the time of writing. 

Exchanges also charge fees, with Binance currently setting its fees at 0.1% for Cardano at the time of writing. Also, if you use a credit card to fund your account, you'll be charged a higher fee than a debit card or wire transfer.

Risks

Although there can be significant returns from investing in Cardano and other cryptocurrencies, there are also some risks involved.

Firstly, the cryptocurrency market remains relatively volatile compared to some of the other investment options available. This can result in massive profits, but it can also lead to significant losses.

Cryptocurrency also hasn't been as regulated as some of the other markets available. Efforts are being made by central banks and governments to regulate the space, and there has definitely been some progress in this area. But there is still some debate over whether to register Cardano, and other cryptocurrencies, as a form of digital currency, or a tradable commodity.

Cryptos can also be subjected to hacking, while hard forks and discontinuation are also an issue for investors. Finally, the CFD contracts that are particularly popular with cryptocurrencies are considered to be high-risk and unstable.

Payment methods

There are several payment methods available for Cardano, including virtually all fiat currencies, PayPal, Neteller, Skrill, and other major cryptos such as Bitcoin and Ethereum.

Why Invest in Cardano?

There are several compelling reasons to invest in Cardano. Perhaps the most obvious of these is that the price of this cryptocurrency shot up in value during the calendar year, increasing six-fold during 2021. It trades at $1.33 at the time of writing. Many people believe that this is just the tip of the iceberg, with the cryptocurrency niche set to expand further in the future.

Cardano has also been praised for its innovative, efficient, and sophisticated blockchain, which has outperformed some of the more familiar names in the space. Cardano has an active community, and its developers continue to improve the platform, to ensure that it becomes ever more efficient.

Cardano claims that it overcomes existing problems in the crypto market—namely that Bitcoin is too slow and inflexible, and that Ethereum is not safe or scalable. While many people disagree with these views, Cardano has nonetheless attracted a huge amount of attention and followers, and demonstrated that it has a valid use case going forward.

Summary of Investing in Cardano

Cardano has established itself as a successful cryptocurrency, being ranked comfortably in the top ten cryptos by market value. This is due to the qualities that it has exhibited as a crypto token, with many users deeming it to be both safe and efficient.

There are a variety of investment methods available for Cardano. Day trading is one of the most common strategies but hedging is also emerging as a popular trend among investors. This guide discussed some of the most common strategies and also discussed how to purchase the tokens by opening an account through a broker or an exchange. 

It is important to manage risk while trading or investing in cryptocurrencies and new traders must learn to gain experience before committing huge capital in the crypto markets.