Dash (DASH) is one of the many cryptocurrency contenders that have been strongly influenced by the household name that is Bitcoin. Dash was originally formed when it was forked from the Bitcoin protocol, launching as Xcoin in 2014.
The project was later rebranded as Darkcoin, before receiving its current moniker in 2015. After settling on this new name, Dash began to escalate in value, and even exceeded a market capitalisation of $4 billion in 2018.
Since then, the price of Dash has receded somewhat, but the crypto coin remainsy within the top 100 tokens in terms of market cap. This guide will discuss how you can invest in DASH and will also explore some popular strategies for investing in the cryptocurrency.
There are a variety of ways available to invest in Dash, but in the following section, we're going to examine four of the most popular and commonly used strategies. All these methods can be used with or without leverage.
The first method to buy Dash is probably the most popular. Cryptocurrency exchanges have sprung up online in large numbers, and these enable investors to purchase cryptocurrencies, alongside other equities and commodities.
While digital exchanges typically include storage functionality as part of their overall packages, it is always advisable to opt for a hardware wallet. This will provide additional security when storing Dash and other cryptocurrencies.
Crypto wallets that feature online connectivity are referred to as hot wallets since the funds are always accessible. The best advantage of a hot wallet is that they keep your digital currencies available while providing a decent level of security. They aren't as secure as hard (or "cold") wallets but provide better accessibility and user-friendliness. Hot wallets are more likely to be targeted by hackers and cyber criminals since they can be accessed through online bugs.
Some of the hardware wallets compatible with Dash include the following:
To purchase Dash, it will first be necessary to join a cryptocurrency exchange. This requires a relatively straightforward registration process to be followed, and part of this involves confirming your identity as an investor. This usually requires providing some government documentation, along with some proof of your current address.
Registration procedures for cryptocurrency are usually compliant with the Know Your Customer norms. This refers to the process of verifying the identity of customers, and references the regulated bank customer identity verification practices, used by financial institutions to assess and monitor customer risk.
The minimum fraction of Dash available, according to the developers of the altcoin is one-millionth of one Dash. This has been dubbed the ‘Duff’, after the creator of the cryptocurrency, Evan Duffield.
Another possible purchase method for trading Dash is via a cryptocurrency broker. Considering the popularity of cryptocurrency as a trading mechanism, these have become widely available online.
Brokers act as intermediaries between the investor and the market, facilitating the purchasing and selling of cryptos. Typically, brokers also bring a lot of knowledge and experience to the table, and also frequently offer extra services as well.
It is important to choose a Dash broker diligently, and ensure that the credentials of this platform are fully proven. Brokers should be conversant with regulatory measures for financial services, and you should also ensure that you can access your crypto broker platform via both desktop and mobile applications.
Another option for cryptocurrency traders is to opt for an ETF (Exchange Traded Fund). These are frequently used to trade other assets, equities, and commodities, and now they have been welcomed into the cryptocurrency fold as well.
ETFs can also be used to combine what would be a diverse set of cryptocurrencies into a solitary tradable asset. This is often witnessed in other markets, with baskets of commodities and currencies being drawn together.
ETFs trade in the same way as common stock on an exchange, being subjected to changes in price throughout the day as investors buy and sell the token.
ETFs are often seen as a better and passive method for new investors to enter the crypto market, by trading a so-called basket of different digital tokens. However, regulators in the US have denied multiple attempts to offer products of this nature on its exchanges, so they are somewhat location-specific.
Before investing in Dash, or any other cryptocurrency, it is important to take into consideration certain issues. So, in this section of the article, we're going to examine some of the most important factors that can impact your Dash investment.
According to bitinfocharts.com, the average transaction fee for Dash is between $0.20—$0.30, whereas it is in the range of $2—$5 for Bitcoin. It is, thus, much cheaper to transact using Dash coin, as compared to Bitcoin currently.
Exchanges also tend to charge fees on Dash transactions, with Binance levying a minimum of a 0.1% charge.
Although there are huge opportunities for profit in the cryptocurrency space, it is also important to remember that there are risks involved with investing as well.
The first of these is the fact that the cryptocurrency marketplace remains relatively volatile. While this means that it is possible to make massive profits in a short timeframe, it is also an unpredictable market, in which it is equally possible to lose money rapidly. Investors should definitely tread carefully before opting for Dash or any other cryptocurrency, and ensure that they are well-informed on altcoins generally.
Cryptocurrency also remains fairly unregulated, despite some efforts in this direction by governments and central banks. This is not necessarily a massive problem for those looking to profit, but it may be a dissuading factor for some cautious investors.
There are potential issues related to hacking and human error with cryptocurrencies as well, and Dash is definitely susceptible to these problems. However, it should also be noted that all investments are subject to potential theft, and this is nothing particularly unusual to cryptocurrency.
Nonetheless, crypto tokens can also be discontinued due to developer decisions. This is something else to take into consideration, as this can lead to a loss of investment.
Finally, the CFD contracts that are often used to trade cryptocurrencies can be considered relatively risky investments. Those choosing to invest via CFD could find themselves heavily leveraged, and this can sometimes lead to significant losses.
There are several payment methods possible with Dash, with virtually every fiat currency supported, and further options such as PayPal, Scrill, and Neteller also available. You can also use the market-leading Bitcoin and altcoins to purchase Dash.
There are several compelling reasons to invest in Dash. Firstly, the price per Dash token has doubled during 2021, and it had tripled at one stage during the calendar year. Cryptocurrencies generally have been in a bull market, and many people believe that they will escalate in value further still in the future.
Dash has also done a decent job of solving Bitcoin's scaling and consensus problems, which provides excellent upside for the token. With a development budget in excess of $2.5 million already in place, it is clear that Dash will benefit from improvements in the future as well.
Another area where Dash has been praised is with regard to privacy, while the developers of the token have also aimed to force mass adoption in a short timeframe.
Dash is one of the brightest new wave cryptocurrencies, having established itself as a decent performer in the volatile market.
With the combination of excellent privacy and state-of-the-art performance, Dash delivers much of the ethos that was always associated with cryptocurrency since the advent of Bitcoin.
Many investment strategies were discussed in this guide such as day trading, buy and hodl, and the use of trading bots. Investors can also use shorting strategy to benefit even in a declining market. New investors must manage risk by making use of strategies such as hedging.