Why invest in Algorand? What are Algorand Token investment pros and challenges? Here is everything you need to know about ALGO investing.
As of 2021, Algorand has reached over 10 million crypto wallet addresses and has over 500 projects building on its blockchain. After launching in 2017 and following a series of ups and downs in the crypto market, this digital token has practically exploded this year.
According to many crypto enthusiasts, Algorand already has the perfect combination to succeed in this industry - a strong team, robust tech, and backing by successful investors. The project also has some big plans that are likely to drive its price up even further in the future.
So, if you are intrigued by this project and want to make an investment, it would be best not to waste any more time.
Not sure how or where to start? Let us help you with that. Our How to Invest in Algorand Guide will offer you an extensive breakdown of the vision of this network, the strategies you can deploy, and how you can start investing today via a regulated online broker.
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- How to Invest in Algorand in 5 Easy Steps - Quick Guide
- How Does Invest in Algorand Process Work?
- Why Invest in Algorand?
- How to Invest in Algorand - Various Options Available
- How to Choose a Platform to Invest in Algorand
- How to Invest in Algorand Today - Step-by-Step Walkthrough
- How to Invest in Algorand - The Bottom Line
How To Invest In Algorand (ALGO) In 5 Easy Steps
To invest in Algorand, you will first need to find a trustworthy and regulated broker that supports this digital asset, like eToro. This will allow you to set up your brokerage account and enable you to start investing in Algorand right away.
Step 1: First, you need to pick a regulated broker that lets you buy Algorand.
Step 2: Sign up on your chosen brokerage platform to open your investment account.
Step 3: Choose Algorand from the list of digital assets supported by your chosen broker.
Step 4: Place your Algorand order by entering how much you want to invest in this token.
Step 5: Confirm your order and withdraw your ALGO tokens for safe storage.
The most important part comes after this - keeping your Algorand coins safely until you are ready to cash out your investment. This is something that requires some serious consideration, and we will explain this in more detail later.
For now, let us start with the basics of how to invest in Algorand and how you might make money from this asset.
How Does Invest In Algorand (ALGO) Process Work?
Cryptocurrencies are everywhere these days. In fact, if you do not hold any crypto in your investment portfolio, you might actually be seen as someone that is behind the times.
Put in the simplest terms, when investing in Algorand, you will aim to buy this digital token at a low price and sell it at a higher value - making a profit on your investment.
However, as you can imagine, the crypto market might not always move in your favour. In other words, there is always the possibility that the value of Algorand goes down after you make your investment. If this happens, you will have to deal with losses.
All that being said, how can you know whether the price of Algorand will rise in the future or not?
For a cryptocurrency like ALGO - there are several decisive factors that will determine its market value. These range from the technology behind Algorand, its competitors in the market, the adoption of this digital token, cryptocurrency regulations, and so on.
Based on these aspects, the supply and demand of this coin in the market will always be fluctuating. If more investors feel that Algorand has a high potential, they will be looking to buy this digital token, driving up its demand and price.
Contrarily, if more people feel that the value of Algorand is about to take a plunge, they will want to sell their tokens, thus lowering its market price. Armed with thorough research, you will be able to make speculations that can help you time the market correctly.
This can allow you to make the right decisions about when you should invest in Algorand and when you should cash out to maximize your returns.
Here is an example of an Algorand investment set in real market conditions:
- On January 1, 2021, the price of Algorand stood at $0.21.
- Let's suppose that based on your market research, you made a speculation that the value of ALGO coins was about to go up.
- Thus - you made an investment of $200 into Algorand.
- By February 13, 2021 - the value of Algorand increased to $1.79.
- This represents a gain of over 750%.
- Wanting to cash out, you sold your ALGO tokens - making a return of $1,500 on your $200 investment.
In this example, you held on to your Algorand investment for a year and succeeded in making a considerable profit.
If you had been thrown by the short-term fluctuations (as is common in the crypto markets), you might have sold your investment for a much lower price, making significantly smaller profits - or even worse, losses.
This is why it is paramount not to get into cryptocurrencies like Algorand blindly. You should always do your research and vet your sources when figuring out whether a certain asset like Algorand is a good fit for your financial portfolio.
Why Invest In Algorand (ALGO)?
As with any financial asset, when thinking of how to invest in Algorand, you should consider your investment goals and current financial situation.
Above all, you should do thorough research on the performance history and potential future of your chosen asset - in this case, Algorand.
Therefore, it is best to rely only on data-driven information, and here are some on Algorand that will help you make informed decisions.
1. Algorand Has a Strong Development Team
Algorand was developed by Turing Award winner and MIT professor Sylvio Micali. He is also the co-creator of several cryptography projects like the Zero-Knowledge Proof.
He has built up an active team of developers, mathematicians, and cryptographers who are well-versed in the technical demands of the crypto markets. This includes some key figures in the sector like Chris Peikert and Steve Kokinos.
Alongside this, Algorand is also miles ahead in terms of development activity when compared to other similar projects in the market. The network is active on platforms such as GitHub, constantly innovating and updating its solutions.
As such, a top-notch team in quality and commitment is a factor that can be a huge incentive towards the future of this project.
2. Algorand is Solving the Problem of Blockchain Trilemma
As you know by now, there are thousands of digital tokens classified under the cryptocurrency category. In order for any crypto tokens to perform well in the long term, they should be bringing some unique value to the market.
When it comes to blockchain technologies, there are three ideal qualities preferred by the industry - namely, decentralization, security, and scalability. Although these are great targets, these are highly intertwined as well.
For instance, you cannot scale in a decentralized way without compromising on the security of the network in one way or the other.
This trilemma is something that many popular blockchains, including Ethereum, are facing right now. Not to get into the technical details here, but Algorand has managed to solve this dilemma by using a consensus mechanism called Pure Proof-of-Stake.
This one aspect alone sets Algorand apart from the dozens of other blockchain networks in the market.
3. Algorand is a Part of Numerous CBDC Projects
Governments around the world are on the move to rush to develop their own Central Bank Digital Currencies or CBDCs. However, developing a digital currency comes with its risks.
As such, many countries have turned to existing cryptocurrency networks for assistance.
Algorand is one of the crypto projects that has offered itself as a blockchain that can host CBDCs.
Not surprisingly, given the current stance of ALGO, several governments have initiated to work with this platform to launch their CBDCs. In addition, Algorand has also acquired several institutional partnerships for securing its future.
It is also one of the best-funded projects in the cryptocurrency space, raising nearly $130 million between its public and private sales of ALGO tokens. It is also strategic towards NFTs, a sector that is vastly growing every day.
Considering its overall market dynamics, Algorand is showing all the signs of a prominent blockchain network. That said, it is always in your best interest to invest only small amounts that you can afford to risk and keep your market exposure to a minimum.
How To Invest In Algorand (ALGO) - Various Options Available
If you are someone new to the crypto market, you will want to be wise about your choice of digital asset providers. This is because the convenience and features offered by your chosen platform can ultimately define your experience in the crypto niche.
Make a bad decision, and you could not only be heavily disappointed but could also be looking at monetary losses.
When thinking about how to invest in Algorand, you will need to choose a cryptocurrency exchange or broker. Before you make your choice, there are a few key differences between them to keep in mind.
Cryptocurrency exchanges are platforms that function as a marketplace for buyers and sellers to meet and trade digital assets. For investing in Algorand via such sites, you will first need to buy this digital asset from another investor or trader.
Now, you will come across several crypto exchanges that offer attractive features. But up-close, many of these platforms fail to be beginner-friendly. More often than not, these are designed to support advanced investors and traders who deal with multiple trade types on a regular basis.
Even if you might find a crypto exchange that allows you to make easy Algorand purchases, such convenience is likely to come at the cost of high investment fees.
Additionally, a majority of cryptocurrency exchanges only allow you to buy Algorand using another crypto. Meaning, you will have to first get your hands on another digital asset to start investing in ALGO.
Most importantly, above all, unregulated cryptocurrency exchanges like Binance or OKEx lack the security and stability that are offered by licensed brokers. This is notably because of the absence of regulation by reputed financial authorities.
In other words, if there is a security breach on the platform, your funds will not be backed by any safety nets. In light of these concerns, a cryptocurrency exchange might be considered a viable option for investing in Algorand, but certainly not the best one.
In comparison, regulated brokers cut back the complexity associated with cryptocurrency investments.
Platforms like eToro offer an easy-to-use interface that makes it effortless and comfortable for everyone to use - including beginners who are only learning how to invest in Algorand for the first time.
Using a crypto broker offers you the advantage of being able to fund your Algorand investments directly using fiat currencies such as US dollars. This is because all the well-respected online crypto brokerage platforms are regulated by one or more financial authority.
For instance, in the UK - you have the FCA for this purpose. Similarly, there are also other governing bodies such as ASIC in Australia, the SEC in the US, FSA in Japan, and so on, regulating the brokerages in their respective jurisdictions.
Such regulation ensures that a licensed broker abides by the stringent guidelines set up by its governing bodies. This ensures the overall security of the financial sector and offers a safe environment for all registered investors.
To sum up, if you are considering how to invest in Algorand using a crypto broker, you will have the following advantages:
- Investor protection is offered by the respective financial authorities.
- Option to fund your investments directly with fiat currencies like US dollars and euros.
- Platforms like eToro also boast access to in-built crypto wallets with added security.
- Relatively lower fees and even commission-free investments offered by brokers such as eToro.
All in all, as you can see, the process of making Algorand investments using a regulated crypto broker can be noticeably different and more secure.
How To Choose A Platform To Invest In Algorand (ALGO)
By now, it is clear why we suggest that you opt for a regulated broker as opposed to unregulated cryptocurrency exchanges.
However, for a novice investor, it can be confusing to make the right choice from the plethora of crypto brokerage platforms roaming the internet.
To save you going through a long and growing line of available options, we have created a set of parameters that you need to assess when choosing your Algorand broker.
Licensing and Reputation
As we covered in the previous section, choosing a regulated broker comes with several distinct advantages - the most important being the additional protection for your Algorand investments.
To be precise, the aim of financial authorities is to protect consumers, promote healthy competition and enhance market integrity.
In order to attain this, governing bodies have designed a few guidelines that need to be adhered to by all the licensed brokers.
A few of these include:
- Segregated funds - Regulated brokers are required to keep your capital separately stored from theirs. Meaning, whenever you want to withdraw your funds, it will be readily available.
- Anti-money laundering - When choosing a regulated broker, you will be required to complete ID verification and provide proof of address.
Given these factors, you can see why regulatory compliance is an integral part that will add to the safety of your Algorand investments.
Fees to Invest in Algorand
Another important question to consider when choosing a crypto broker is how much the ALGO investment is going to cost you. All brokerage platforms you come across will charge you a variety of trading fees and commissions.
However, the types of fees charged and the respective rates will not be the same for all cryptocurrency brokers.
Here are some of the fees that you might have to pay throughout the different stages of making Algorand investments:
- Opening an investor account - Creating your investment account is free on the majority of the crypto brokerage platforms.
- Deposits and withdrawals - Depositing funds to your account might cost you a transaction fee - based on the payment method you choose. For instance, many brokers charge you for processing deposits using a credit card and debit card.
- Commission - While placing your investments, your broker might require you to pay a commission - once when you buy Algorand and then again when you sell it. This fee is often calculated against the size of your stake.
- Cryptocurrency transfers - If you have stored your Algorand tokens in an external wallet, moving them to your chosen brokerage might cost you additional fees.
Let us give you an example to demonstrate this:
- Suppose that you decide to make a deposit of $1,000 into your investment account to purchase Algorand using your debit card.
- Your chosen broker has a fee of 5% on debit card transactions.
- This means that making this deposit will cost you $50.
- In order to buy Algorand, your broker charges you a commission of 2.5%.
- On your $1,000 investment, this means a fee of $25.
- At the time of cashing out, let's say that your Algorand investment is worth $5,000.
- Again, you have to pay the 2.5% commission - which will come to $125.
For this investment, the total fees you pay to your broker adds up to $200.
Now, this is not the case with every broker. Some platforms like eToro charge you no fee to make deposits in USD at all. You will only encounter the cost of exchange if you fund your account in another currency.
Additionally, eToro also allows you to make Algorand investments commission-free. Moreover, you will be able to store your ALGO coins for free on this platform, so you can avoid the hassle of transferring and any additional charges associated with it.
Overall, eToro allows you to save a considerable amount of money when it comes to investing in Algorand.
As you can see, the fees imposed by your chosen broker can increase the overall cost of your investment and as such - is a factor that shouldn't be overlooked.
Check Out: Pros and Cons of Investing in Algorand
Minimum Algorand Investment and Payments
Another critical aspect you should check is whether your chosen broker has a minimum investment policy in place for cryptocurrencies.
What this means is that many brokerage platforms will require you to invest a certain amount to get access to the digital asset markets. This amount can differ vastly between two different brokerage platforms.
While some might have no such requirement, others set the minimum at a high level. There are also brokers like eToro that have a low minimum investment policy which allows you to make purchases of Algorand with a stake of $25 or above.
Additionally, you should also check what payment methods are supported by your chosen brokerage.
The easiest and fastest way to make deposits and withdrawals would be via a debit card or credit card. Most modern brokers also offer support for e-wallets like PayPal and Neteller - however, access to these will depend on your location.
Lastly, you also have the conventional wire transfer. Although a popular option, it is also the slowest in terms of transactional speed, as it may take several working days for the funds to arrive in your account.
So - if you are looking to make Algorand investments right after making a deposit, this is not the way to go.
Storage and Cashing Out
When considering how to invest in Algorand, it is easy to overlook the significance of finding a secure storage method.
Especially if you are a beginner, you should make sure that you know where you are going to keep your ALGO coins before you make an investment.
There are different ways you can go about this. One method is to choose an external wallet to store your Algorand tokens. However, this means that you will have to move your coins back and forth when making your investment and when you cash out.
Secondly, you might come across cryptocurrency platforms with in-house wallets.
The most convenient option would be to find a regulated broker like eToro that allows free storage of your ALGO coins. This way, at the time of selling your investment, you will be able to do it directly from your brokerage portfolio.
How To Invest In Algorand (ALGO) Today - Step-by-Step Walkthrough
When you have decided which crypto broker you want to use, it will take you only a matter of minutes to set up your first Algorand investment. However, before you do that - we suggest that you think about how long you want to hold on to your ALGO coins and where you are going to store them.
Having a clear strategy can be extremely beneficial to keep emotions at bay when making investment decisions.
When you are ready, here is how you can start your investment process with the help of a reputed online broker like eToro.
Step 1: Open an Account
Visit the website of your chosen broker to create your investment account. On eToro, you can complete the account setup by providing your basic information like your full name, home address, date of birth, and contact details.
Step 2: Provide Some ID
In order to allow you to fund your Algorand investments using fiat currencies, you will need to provide your chosen brokerage with some additional supporting documents that verify your identity.
This KYC process is standard practice across all regulated brokers like eToro and helps to prevent identity fraud in the online investment sector. The requirements to complete this step differs based on your jurisdiction and the licensing authority of your chosen brokerage platform.
Regardless, here is what you will be generally required to provide:
- A government-issued ID such as a passport, driver's license, or national identity card.
- A document that confirms your address, such as a utility bill or a bank statement, issued within the last three months.
After submitting the documentary proof, your account will be confirmed within a few minutes.
Step 3: Deposit Funds
To invest in Algorand, you will need to have some money in your brokerage account. As we covered earlier, you can do this by authorizing a wire transfer, or making an instant payment using a debit/credit card or an e-wallet like PayPal.
Step 4: Search for Algorand
When the money has been deposited in your account, you are ready to make your first Algorand investment. You can start by entering the ticker symbol of Algorand, ALGO, in the search bar of your chosen brokerage.
If you are using eToro, you will also be able to find Algorand listed among ‘Cryptocurrencies’ under the tab 'Trade Markets.'
Step 5: Complete Algorand Investment
Specify how much you want to invest in Algorand, and confirm your order. On platforms like eToro, you will be able to make investments in any sum starting from $25.
Once the investment has been completed, you can either choose to withdraw your ALGO tokens to an external digital wallet or leave them with the broker - if the option is supported by your chosen brokerage platform.
Step 6: Cash Out Your Algorand Investment
At the time of selling, you will want to transfer your Algorand back to your broker. If you chose a platform like eToro, you will be able to sell your coins directly from your portfolio.
The funds from the sale will be available to withdraw to your original payment method.
How To Invest In Algorand (ALGO) - The Bottom Line
Although Algorand has been around for over three years, 2022 seems like a good entry point for those who want to invest in this project. However, bear in mind that investing in any cryptocurrency like Algorand comes with a certain risk that can be attributed to this specific asset class.
What you can do is take precautions by staking small amounts and choosing a regulated broker to facilitate your investments.
A brokerage site like eToro will allow you to invest in Algorand easily without having to pay high trading fees or commissions. It will also allow you to keep your ALGO tokens safely stored on the platform for free - until you are ready to cash out your investment.
eToro – Best Platform To Buy Algorand
eToro have proven themselves trustworthy within the crypto industry over many years – we recommend you try them out.
Virtual currencies are highly volatile. Your capital is at risk.
Is Algorand a good investment?
The team behind Algorand continues to create new products that will make its blockchain technology remain competitive in this vastly saturated market. Therefore, it might be a good idea to invest in Algorand - given that this asset is compatible with your financial portfolio and risk appetite. Always conduct your own research before investing.
What is the highest price of Algorand?
Algorand hit an all-time high of $3.28 in 2019.
How much can I invest in Algorand?
The amount you can invest in Algorand will depend on your financial standing and strategy. However, the minimum investment amount is determined by your chosen broker. For example, on eToro, you will be able to buy Algorand from $25.
How can I store Algorand?
Crypto assets like Algorand need to be stored in a secure digital wallet. You will also find brokers like eToro that allow you to safe-keep the coins on the platform for free.
How to invest in Algorand?
The best way to invest in Algorand is via a regulated broker like eToro - which gives you safe and commission-free access to the crypto markets.