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How to Invest In Tezos In 2021

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Tezos is an advanced blockchain platform that supports smart contracts. In many ways, it resembles Ethereum, however its infrastructure is quite advanced, allowing it to evolve and improve over time without ever being in danger of going through a hard fork. The platform is governed by its community, where holders of XTZ tokens can vote on proposals to upgrade the protocol.

Tezos prides itself on being a secure, upgradable, and built-to-last open-source platform with its smart contract language providing the accuracy necessary for high-value use cases. This has seen the platform embraced by large institutions such as Société Générale, a French banking giant that is using the blockchain platform to experiment with its own central bank digital currency. This guide will go through ways and strategies you can use to invest in Tezos. 

4 Ways to Invest in Tezos

1. Buy Tezos Through an Exchange 

Before you start buying Tezos on a crypto exchange, you need to invest in a cryptocurrency wallet. This way, you will be able to safeguard your investment. Wallets hold private keys that allow you to stake a claim on a quantity of tokens. Two types of wallets exist: software wallets and hardware wallets. 

Software wallets come in the shape of websites, mobile apps, and desktop applications. They are easily accessible since they are mostly online, and are convenient for investors who regularly need access to their tokens to conduct transactions, or for trading Tezos. Examples of such wallets include Trust Wallet, Atomic Wallet, Exodus, and Guarda. 

Hardware wallets are more secure compared to software wallets since they store your private keys offline. They resemble USB flash drives and are convenient for long-term investors and people who hold large amounts of Tezos. Examples of these include wallets from Ledger, Trezor, KeepKey, and Corazon. 

After acquiring a Tezos wallet, it's time to join a reputable exchange and buy Tezos (XTZ). Register an account and complete the KYC process by uploading a photo of your ID/passport, proof of residence, and a selfie for verification. Fund the account using any supported payment modes and make your purchase. Then move your tokens to a private wallet.

Our Recommended Exchange

The section below will display a list of reputable platforms that will allow you to purchase Tezos tokens with ease and confidence. 

1
Min. Deposit
$50
Exclusive promotion
User 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:
Bank Transfer, Wire Transfer
Full Regulations:
CySEC, FCA

2. Buy Fractions of Tezos Through an Exchange

Currently, the price of Tezos tokens is around $6. The good thing is you can buy fractions of the token, and many Tezos exchanges will allow you to buy small fractions of XTZ. For coins that don't cost too much, buying fractions doesn't make much sense, but it's possible. There are network fees involved when purchasing Tezos, and most exchanges will stipulate that you buy at least XTZ worth about $10 to ensure you cover the fees. For that amount, you would get almost two full Tezos coins at the time of writing, since the fees are minimal. 

3. Trade Tezos Through a Broker

Brokers are great for short-term traders and for individuals that love convenience, and are great for investors who don't want to deal with the actual asset and the risks of safekeeping the tokens - these will be stored in your brokerage account.

Crypto brokers also allow you to trade financial instruments attached to Tezos, such as contracts for differences (CFDs). These allow users to speculate on slight price movements, whether positive or negative, with potentially higher profit margins, since they have access to leverage. By using leverage, your capital is boosted, which increases your exposure for a trade. All you need to do is join a reputable trading platform like the ones listed below, register an account, fund it, and you are good to go. 

Our Recommended Broker

Below is a list of all top brokers you can use to speculate on the price of Tezos with potentially higher profits. 

1
Min. Deposit
$50
Exclusive promotion
User 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
Bank Transfer, Wire Transfer
Full regulations list:
CySEC, FCA

4. Invest In a Tezos ETF

An exchange-traded fund (ETF) allows users to gain exposure to Tezos through the traditional stock market. They are highly regulated and scrutinized, and this inspires confidence among investors who can engage with these products knowing their investments are safe. 

Many of the cryptocurrency ETFs that exist today are composed of multiple different coins, allowing users to spread their investment across a managed portfolio. In contrast, others are made up of a single coin, in this case, Tezos only, and will offer more direct exposure to a single asset. Either of these forms of ETF are a good choice for the cautious investor who values regulation and security above all else.

5 Tezos Investment Strategies

After covering four easy ways you can invest in Tezos, it's time to take a look at five strategies that will aid your journey and help you make the most of this endeavor. 

1. Buy and 'Hodl'

What is it?

The first strategy is buying and ‘hodling’. This simply means buying Tezos on a cryptocurrency exchange of your choice and holding on to it for as long as you can, in this case, even years. The term ‘hodl’ is part of cryptocurrency slang, and refers to putting faith in a given project for a long time. 

strategy assumes that projects such as Tezos will grow over time as they see more adoption and cryptocurrencies grow among the masses, and there is evidence to support this theory. Since Tezos was launched, it has recorded an ROI of over 1000%. This trend is expected by many to continue as cryptocurrencies become an integral part of our lives. 

What is the benefit of using this strategy?

For starters, you don't have to worry about the short-term price volatility associated with Tezos. Price volatility can mess with your profitability if you opt for short-term investing strategies. Additionally, you don't need much technical know-how to use this strategy and profit from it. Unlike most short-term trading strategies, you don't have to understand how to read charts and conduct technical and fundamental analyses. Most importantly, you get rewarded handsomely for believing in Tezos over time. 

2. Day Trading

What is it?

Day trading involves buying and selling XTZ over short periods. It can be hours, or even minutes, within a day. This strategy helps you to exploit the enormous volatility that exists within the Tezos market. However, you need to understand how to conduct technical and fundamental analysis to make the most of this strategy. 

Additionally, you need to keep up with the latest ongoings within the Tezos community, and the crypto market at large, ensuring you are always informed of events that are likely to push the asset’s price up or down. Risk management strategies like ‘stop loss’ and ‘take profit’ orders should be employed to maximize profits.

What is the benefit of using this strategy?

This strategy will help you profit frequently. Unlike long-term investors, you don't have to wait years to see a return, and you don’t need to worry about purchasing and safekeeping your tokens and the risks associated with them. Additionally, you can use brokers to make the most of this strategy through leverage trading, where you can speculate on small price differences to generate large windfalls.

3. Shorting

What is it?

Shorting is a strategy that will help you make money with Tezos if you believe the asset's price is likely to drop. If your analysis tells you this, then you can borrow Tezos from a broker and sell the asset immediately at the prevailing market price. Then, you wait for the price to drop and repurchase the token to repay the debt. 

Let's say you borrow Tezos at $6 and sell it. Then the price drops to $3, where you repurchase it and pay the lender his tokens. In this situation, you get to keep $3 as profit. This strategy requires some technical know-how to time the market right. You have to understand how to read charts and keep in touch with the market ongoings.

What is the benefit of using this strategy?

Shorting is useful if the price of your chosen asset is falling. If you hold Tezos, you can short your assets during a price downtrend, and this will allow you to make up for lost profits. As a result, you can manage your risk effectively. Be careful, though: if you open a short position and the price increases, you will lose money. Stop loss limits can help you to manage this risk.

4. Using a Trading Bot for Trading

What is it?

Trading bots are computer programs that allow people to venture into crypto trading and investing with ease. It's the ultimate equalizer that helps individuals with limited market knowledge to profit from trading assets such as Tezos. A robot that allows you to invest in Tezos is made up of sophisticated algorithms that enable it to collect market data, analyze it, and make statistically informed investment decisions on your behalf.

All you need is a few minutes every day to adjust your strategy: there’s no need to spend hours each day staring at charts. To get started, you can join a reputable trading bot website, register an account, fund it, and begin your trading journey. The best trading bots will offer access to a demo account where you can learn how to use the platform before you start trading with real money.

What is the benefit of using this strategy?

This is an excellent strategy for the individual that is interested in making money using crypto assets such as Tezos but lacks the technical know-how or free time required to make money from trading. A bot that is set up successfully will give you a source of passive income, as it trades in the background while you go about your day.

5. Hedging Tezos

What is it?

This strategy involves taking new positions to manage the risk of possible losses from existing positions. This can be done by CFDs, shorting, futures, or a combination of these strategies. It works this way; if you hold Tezos, you can open a short position that will protect you if the market tumbles, or you can utilize futures contracts to guarantee profits if the price of Tezos is in an uptrend. Hedging involves any method that decreases your risk, or increases the certainty of a profit.

What is the benefit of using this strategy?

There are a few benefits of hedging your Tezos investment, such as securing your capital, which guarantees your initial trading position will not lead to any financial losses. Also, you can manage your risk, which maximizes your profit potential with limited downside. You also get to account for the volatile price of Tezos, which helps reduce the anxiety of dealing with the asset. 

Hedging is a must for cautious Tezos investors, as it introduces a degree of certainty into a highly unpredictable asset class.

Buy Tezos Today!

What to Consider Before Investing in Tezos

So far, you know of four ways of buying Tezos, and five strategies to maximize your profits. The following section will highlight three key things you need to pay attention to since they have the potential to impact your XTZ investing journey significantly. 

Fees

Fees are common among investing and trading platforms, as this is how they make their money. These fees vary from one platform to another. They may seem tiny when taken on their own, but they can accumulate, especially for regular users such as traders. This can end up eating a chunk of your profits. 

Therefore, it does help to analyze the kind of costs on various platforms, and to choose the one with the most favorable fee structure without compromising the quality of service you receive. As you invest in Tezos, you will also come across network fees associated with buying and selling the tokens. In the case of XTZ, these shouldn't worry you much as there are only a few cents per transaction. 

Another type of fee you are likely to encounter is from your payment processor, such as credit card charges. These fees will also vary. When dealing with brokers, you won't pay any network fees, but you will be charged commissions for trades conducted on the platform. Also, most brokers will charge an inactivity fee if you go for long periods without using your account.

Risks

As a digital asset, there are a few risks associated with Tezos. The crypto market is highly volatile, and it's not surprising to see prices change by 10% or more overnight. This can significantly impact your investment, especially if you are a short-term investor and you close a trade at the wrong time. To cover this volatility, you should consider hedging, or diversifying your investment with other digital assets, helping you mitigate the downside. 

Another risk associated with Tezos stems from the lack of regulations within the cryptocurrency space. It's a loophole that has greatly been exploited by bad actors who have ended up scamming unsuspecting investors using investment schemes attached to assets such as Tezos. To avoid falling for such scams, you need to extensively research any and all cryptocurrency investments. Investing in regulated instruments such as ETFs provides substantial protection against scammers. 

You can also lose your investment through hacks of your brokerage account or private wallet. This is why it's necessary to take adequate security measures, such as setting a strong password, activating two-factor authentication (2FA), and investing in hardware wallets. This will limit the chances of hackers accessing your account. 

Payment Methods

With research, you will realize different platforms that allow you to invest in Tezos will support different payment modes. Some will have limited ways to fund and withdraw funds from your account, which can be very inconvenient. An ideal investment or trading platform should support multiple payment modes such as bank transfers, credit/debit cards, e-wallets, other cryptocurrencies, and third-party payment processors. 

Why Invest in Tezos?

As stated earlier, over its short lifespan, XTZ has managed to register an ROI of over 1000%. This is quite modest compared to some digital assets, but spectacular compared to traditional investment assets such as stocks. Tezos offers a superior smart contract platform compared to the likes of Ethereum and should see greater use cases in the future as more users embrace its blockchain. This should have a direct effect on its tokens, leading to an increase in value. 

The growing acceptance of cryptocurrencies within our society is another reason you should consider investing in Tezos. As things stand, only a tiny fraction of the population is conversant with cryptocurrencies, which means an investment today will put you among an exclusive small percentage of early adopters that will benefit greatly when these digital assets see mass adoption. 

Summary of Investing in Tezos

Investing in Tezos has never been easier, thanks to the many ways of gaining exposure mentioned in this guide. Tezos is a promising project that has begun to receive the kind of recognition it deserves, and this should be reflected in the price of its tokens. This guide offers you several ways to enter into a Tezos investment safely, without having to worry about losing your hard earned money. 

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