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Cryptocurrency has grown enormously from the days when Bitcoin was the only token available and other notions like NFTs, smart contracts, and decentralized finance. These days, while crypto is growing more popular than ever, the vast majority of people out there still don’t fully understand how it works.
For those who want to learn or who are interested in joining the market and finally investing in some, it can be a little overwhelming. How does it work? How many tokens are there now? Which one should I choose? These are just some of the questions that can plague first-time crypto investors.
For anyone in this position, here’s a look at the market today and whether it’s better for first-time crypto traders to go with new tokens or tried and tested traditional coins.
The Role of Presales in Today’s Market
In a presale, developers offer a new token for sale before it officially launches. For early buyers, this provides a chance to purchase the token at a lower price, often with hopes of seeing a significant price rise post-launch. According to crypto writer Alex Popa, a token presale also presents an appealing entry point due to its potential for rapid gains if the token attracts interest after release.
While they can come with risks, traders who are smart, do their research and consider the opinion of expert analysts stand a better chance of making better decisions. While many presales wind up being great investments that deliver on their promises, others can turn out to have less value than they seemed to or even be outright scams at times.
Timing and market conditions also matter in presales. A strong crypto market can boost new tokens quickly, while a downturn can suppress their value. Therefore, as with any investment, it’s essential for buyers to stay informed and exercise caution.
Traditional Coins Offer Stability and Security
Traditional cryptocurrencies, like Bitcoin, provide a higher degree of stability that new tokens often lack. Bitcoin has been around for some time now and has been tested through a multitude of market factors and regulatory challenges, However, it has survived all of this and remains a mainstay of the crypto market.
Over time, it’s now established itself as a relatively stable asset class and is now traditionally thought of as a store of value—holding more in common with gold than it does with fiat money. Their adoption across various industries is also widespread. For example, tokens like Bitcoin, Ether, and Solana are widely accepted across eCommerce sites and online crypto casinos.
They can also be easily converted into fiat currency if needed. In addition, they benefit from regular updates, dedicated communities, and high levels of liquidity since they are more likely to see investments from whales. These factors make traditional coins appealing to long-term investors who are looking to build wealth gradually.
New Tokens Represent High Growth and High Risk
On the other hand, new tokens offer an entirely different appeal. Often being unknown entities that could represent both high risk and high reward, it’s this very aspect that gives them their appeal. Once upon a time, Bitcoin could be bought at under 10 cents each. Now, a single Bitcoin sells for more than $60,000. However, Bitcoin has also had some spectacular crashes in its time.
Many first-time buyers hope for that kind of fairytale turnaround if they invest in a new token. However, given the sheer number of new tokens that hit the market every year, it can be daunting and difficult to discern which ones may become winners in the future. However, for those who do their homework, choose diligently, spread their risk, and exercise patience, new tokens can grow to become very lucrative investments.
The potential for large gains is a core attraction, but new tokens are also risky. Because they are untested, these tokens can experience extreme volatility, extreme changes due to political factors, rising or falling dramatically in short periods. Scams are also more common among new tokens, making it crucial for investors to thoroughly research projects and only buy from trusted sources.
Takeaway Tips for First-Time Crypto Buyers
For those stepping into crypto for the first time, setting clear goals is key. Traders should also weigh up their budgets, risk tolerance, aims, and what they are hoping for over the short and long term. Long-term investors are better served with traditional coins.
On the other hand, those who are willing to take on more risk in exchange for the potential of higher returns may be interested in new tokens. Either way, it’s essential to research these projects carefully, examining factors like the team’s track record, the project’s vision, and community engagement.
Conclusion
Investing in crypto for the first time can feel overwhelming, but choosing between traditional coins and new tokens doesn’t have to be. Traditional coins like Bitcoin offer stability and established value, making them an appealing choice for cautious investors.
On the other hand, new tokens, with their high-growth potential, appeal to those who are willing to take on more risk in the hopes of higher rewards. In the end, there are never any guarantees with either so it’s always a good idea to spread risk, do your research, and consult experts wherever possible before making any investment decisions.
Reviewed and edited by Albert Fang.
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Article Title: Buying Crypto for the First Time in October 2024 – Traditional Coins or New Tokens?
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