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How to Invest In Zcash In 2021

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Zcash (ZEC)
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Zcash is a cryptocurrency that shares its codebase with Bitcoin, focusing on privacy and anonymity. It uses zk-SNARKs, better known as Zero-knowledge proof technology, that allows nodes on its network to verify transactions without compromising the privacy of users. Zcash offers total anonymity, which appeals to a certain corner of crypto enthusiasts who don’t want their business exposed to the world. 

Zcash (symbol: ZEC) may have fallen down the crypto charts over the past year or so but remains a solid project and should see better days as crypto assets garner increased attention from the masses. This piece will outline several ways to invest in Zcash.

4 Ways to Invest in Zcash

Based on our research, there are four ways you can invest in Zcash. The section below will cover all of them and explain how you can utilize each method to start investing in ZEC.

1. Buy Zcash Through an Exchange

This is the most common way of buying ZEC through a cryptocurrency exchange. But before joining a platform of your choice, ensure you invest in a wallet that will help store your ZEC coins. Two types of crypto wallets exist: software and hardware wallets.

Software wallets come in the shape of websites, mobile apps, and desktop applications. They are easily accessible since most of the time they are online. Popular examples of software wallets include Guarda, BitGo, MetaMask, Exodus, Atomic wallet, and many others.  

On the other hand, hardware wallets store your coins safely offline. They are physical devices that resemble USB flash drives that store apps you can use to hold your private keys. They are ideal for long-term investors and individuals that hold large amounts of a given digital currency. Popular examples of hardware wallets include Ledger, Trezor, Corazon, KeepKey, and many others.

After purchasing a wallet it’s time to join a crypto exchange and buy ZEC. Register an account and complete the Know Your Customer (KYC) process by uploading a pic of your ID/passport plus a selfie. Fund the account using various payment modes supported and buy ZEC. After purchasing your coins, move them to the private wallet.

Our Recommended Exchange

Below is a comprehensive list of all the top platforms where you can purchase ZEC safely and easily. Ensure you follow the steps outlined above, and the process will go smoothly.

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 Zcash Through an Exchange

Currently, the price of ZEC is about $200. The good thing is you don’t have to buy a whole coin. Buying fractions of a coin is one of the easiest ways to invest in cryptocurrencies, and most exchanges listed above will allow you to buy fractions of ZEC. With a sound investment plan, you can grow your crypto holdings with time. Ensure the amount you purchase is large enough to cover associated network fees - many platforms account for this by stipulating you purchase at least $10, which at the time of writing would get you about 0.05 ZEC.

3. Trade Zcash Through a Broker

The third way to invest in ZEC is through a cryptocurrency broker. It’s an ideal way to get into the crypto market for the investor that doesn’t want to deal with the actual ZEC asset and the complications associated with holding the token. All one needs to do is visit a reputable broker like the ones shared below, create an account, secure the account by activating 2FA or implementing any other additional security measures supported, and fund the account. 

A broker will allow you to trade ZEC with leverage, which offers potentially higher returns than regular trading on typical cryptocurrency exchanges. Brokers are the smart choice for investors who want to trade over short timespans, those who want to maximise profits, and users who prioritise convenience.

Our Recommended Broker

Want to speculate on the volatile price of ZEC for a chance to make bigger profits, more often? Below is a comprehensive list of reputable brokers that allow you to do this without having to worry about losing your funds.

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 Zcash ETF

The last way you can get into Zcash investment is through an exchange-traded fund. ETFs are used to track either single or multiple assets, and as they are traded on stock exchanges, they are tightly regulated, which ensures a high degree of security. 

An exchange-traded fund may be composed of several cryptocurrencies, and this helps to manage trading risk. The fund is controlled by selecting assets with a preference for those that have performed strongly in the past, which is a good indicator of better performances in the future. As mentioned earlier, the goal is to mitigate trading risk: funds are designed so that even if some of the selected assets underperform, these losses will be balanced by the other high-performance assets in the fund.

A ZEC fund offered by the likes of Grayscale allows investors to gain exposure to the asset in the form of a security while allowing them to avoid the challenges of buying, storing, and safeguarding the asset directly.

5 Zcash Investment Strategies

So far, you have seen 4 ways you can invest in Zcash. The following section will teach you five strategies that will ensure you make good returns on your investment.

1. Buy and ‘Hodl’

What is it?

The first strategy is buying and ‘hodling’. Yes, ‘hodl’ means ‘hold’, and the term originated as a misspelling that has since become part of crypto jargon, and is synonymous with keeping your faith in a project for a long time. It’s as simple as can be, and involves joining a crypto exchange, buying your coins, and transferring them to your private wallet where you keep them, maybe for years.

It’s the perfect strategy for true believers in a project who are rewarded handsomely as the platform garners attention from the masses. It’s not uncommon to see a solid project with a good use case see an ROI in the thousands. The first investors who hold on to their coins, of course, are part of the beneficiaries. But it’s not too late since only a tiny percentage of the world is aware of cryptocurrencies, which are likely to be the future of money. If you invest today and hold on to your coins, five years from now the $130 price may seem very low in retrospect.

What is the benefit of using this strategy?

There are many benefits of buying and holding on to ZEC coins. The first is you don’t have to worry about dealing with the daily price volatility of the token. Secondly, this is by far the simplest strategy to follow: you simply buy and wait, and as the project grows and sees increased adoption, you will not miss out on the gains.

2. Day Trading

What is it?

This strategy involves buying and selling ZEC tokens quickly within minutes and hours. It’s the opposite of holding or long-term investment. Here you will try to exploit the vast price volatility that exists within the crypto market to your advantage. But, to be profitable, you have to invest time into learning how to conduct fundamental and technical analysis. Your timing has to be perfect, and your decisions need to be informed. ‘Stop loss’ and ‘take profit’ limits can be used to manage your risk when day trading, maximising profits and minimising losses, and this makes it safer to use leverage if you wish to do so.

What is the benefit of using this strategy?

The good thing about day trading is you get to profit often by exploiting the price volatility of ZEC. You don’t have to wait for years to recoup profits from your investment like long-term investors. Also, you don’t have to be concerned by the process of safekeeping your tokens using wallets, as this is taken care of by your chosen broker.

3. Shorting

What is it?

Shorting is a strategy you can use if you believe the price of Zcash is going to decline. A broker will lend you some Zcash, let’s say 1 ZEC. You sell it on the market for the current price, around $150. A week later, the price has fallen, and you buy back 1 ZEC for $100. You cancel your debt by returning this 1 ZEC to your broker, and you keep the $50 you made as a profit. Simple! If the price of Zcash rises instead of falling, however, shorting will cause you to lose money, so make sure to learn how to analyse the market first, and use risk management strategies to limit your downside.

What is the benefit of using this strategy?

Shorting is a great option if you want to protect an investment. If you hold a lot of Zcash and the price is trending downwards, you can short the coin to make a profit while your overall investment is down. Shorting is usually offered through brokers, meaning you also don’t have to worry about storing and securing your coins directly, and you may also be able to access leverage to multiply your profits. 

4. Using a Trading Bot for Trading

What is it?

Trading robots help both experienced, and new traders make the most of the cryptocurrency market. They are software programs made up of sophisticated algorithms with the capability to collect huge amounts of market data, interpret this, then make predictions and place trades for the user. These algorithms are integrated with artificial intelligence (AI) and Machine Learning (ML). AI aids with making market predictions, while ML allows the bot to learn and get better at its craft over time. 

A trading bot doesn’t require much technical know-how to use and helps the average person trade cryptocurrency with ease.

What is the benefit of using this strategy?

Trading robots allow even people with little knowledge of cryptocurrency trading to invest in digital assets such as ZEC and make good returns. You don’t have to worry about dealing with the actual asset, buying, and safekeeping. You require just a few minutes each day to adjust your trading strategy, and you are good to go. This means you get to earn passively trading in the crypto market all year, around the clock.

5. Hedging Zcash

What is it?

The final strategy is about taking new positions within the market to cover potential losses from the already open positions. This is possible by combining CFDs, shorting, and futures to hedge your ZEC investment. If you expect the value of your Zcash to fall, you can hedge by opening a short position. This way, you profit whether the price goes up or down. Futures contracts also allow you to agree on a future sale price today, meaning you can guarantee a profit ahead of time.

What is the benefit of using this strategy?

Like the other trading strategies listed above, there are benefits of using hedging to trade ZEC, such as safeguarding your capital. By taking new positions, you ensure the first open position doesn’t result in losses. Consequently, this helps manage your risk effectively. This allows one to maximize their profit potential with no apparent downside. Most importantly, you get to handle price volatility, and this boosts your profitability. 

Buy Zcash Today!

What to Consider Before Investing in Zcash

Now that we understand how to invest in ZEC and the different strategies that can be applied to make the most of the endeavour, there are a few things you need to pay attention to as you join exchanges, brokers, and any other platforms that allow you to buy and sell ZEC. 

Fees

Fees come in many forms. Almost all platforms will have some form of fees, as this is how they make their money. The first kind you are likely to encounter are the network fees incurred when you buy, sell, or transfer coins. These are unavoidable and can increase if the network is clogged. Exchanges also charge usage fees, although some will allow fees to be paid using their native tokens and offer discounts. 

Brokers will not charge network fees since you are not dealing with the actual asset, but you will have to pay commissions for trading. Also, you will incur fees based on the payment processors you choose to deposit and withdraw your funds from your account. That said, you have to take some time and analyze various cost structures you are likely to encounter, and choose the best route with the lowest cost without compromising on the quality of the service you receive.

Risks

ZEC as a digital asset carries a few risks of its own. It experiences huge price volatility, which is common among crypto assets. Prices can fluctuate wildly, and you should be prepared for this before you enter the market. For day traders and those opting to short the asset, this can be a blessing in disguise since they can exploit the price movements for profit. For the long-term investor, this shouldn’t be a problem as they hope the price will continue to grow over time.

You need to be aware that the crypto market isn’t yet well regulated, and various governments are trying to figure out how they can do this without stifling the revolutionary technology. This has seen a prevalence of bad actors within the space looking to take advantage of unsuspecting investors. ETFs offer a regulated entry point, but there’s no substitute for due diligence to avoid falling for scams tied to digital assets such as Zcash.

Payment Methods

An ideal platform that allows you to invest in ZEC needs to support various payment modes. This includes bank transfers, credit/debit cards, e-wallets, third-party payment processors, support for local fiat currencies, and so on. The more modes supported, the better since it makes it easy to enter the market.

Bank transfers usually offer a secure option with the lowest fees, whereas credit cards offer the greatest protection from fraud and scams. 

Why Invest in Zcash?

Given that most cryptocurrencies aren’t as anonymous as many people believe, it is easy to trace transactions back to the sender. Zcash is highly regarded within the cryptocurrency space since it offers total anonymity. It’s the ideal platform for the individual who doesn’t want their business out in the open. As privacy concerns continue to grow in this age of ‘big brother’ fears, the need for platforms such as Zcash keeps growing. This project offers something unique, and very few other platforms can challenge it. As cryptocurrencies gain mass adoption, expect to see interest in this project grow, and this should be reflected in its token’s price.

Summary of Investing in Zcash

This guide has taken us through ways and strategies to easily and safely invest in ZEC. It also covers a few things you need to pay attention to, such as fees and payment modes, which can impact your investment. Most importantly, it highlights the risks you are exposed to once you choose to enter into a Zcash investment. But by following the advice offered here and doing your due diligence, you shouldn’t have to worry about a thing, and hopefully investing in ZEC will generate you a healthy profit. 

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