How To Invest In Cryptocurrency

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How To Invest In Cryptocurrency

How Easy Is It To Make Money in CryptoCurrency?

 

A guide to the Cryptocurrency market and strategies to make money from it

 

By James Spurway

What’s all the fuss about?  Everyone has heard of Bitcoin – right?

Times have changed. Once there was Bitcoin. Now Bitcoin has 1,600 little brothers and sisters, the market capitalization of the Cryptocurrency market globally is estimated to be $147 Billion, and it has a daily traded volume of a bit over $2 Billion.

Just like fashion that’s seen on Main Street, the financial markets, typified by Wall Street have seen fads and trends come and go.

But then there are iconic moments when you witness a revolutionary trend. The emergence of a wide and deep Cryptocurrency market is a revolution, not a trend.

Like with any new financial asset, for example, foreign currency 20 years ago, there has already been and will continue to be winners and losers.

Get in early and the chances are greatest to make a lot of money, r lose a lot of money. Just ask anyone who has invested in Bitcoin over the years.

Its share price has fluctuated up and down in price movements that were calculated in the tens of thousands of percent.

What’s in it for me – can I make money investing in or trading cryptocurrencies?

Yes. But it’s not for the faint-hearted.  That means you should approach an investment in a cryptocurrency asset as 100% at risk, i.e. totally speculative in nature.

For now, your decision is on the one hand complex, and on the other simple. For the time being there are no regulated and properly functioning crypto exchanges that are like the New York Stock Exchange (NYSE) or London Stock Exchange (LSE) or Frankfurt Stock Exchange (DAX) are for stocks.

They will come in time. Once there are exchanges, and these exchanges quote the value of a series of the strongest crypto units, somewhat akin to the Dow Jones Industrial Index, investors will be able to buy and sell individual crypto units or buy and sell the index, as well as trade in and out of crypto units by purchasing for example currency or currencies, and eventually hopefully stocks and bonds.

There is no trading activity in the traditional sense. What there is for the investors in Bitcoin and some of the other coins is an activity called “mining”.

 

 

Time is more valuable than money. You can get more money, but you cannot get more time.

Jim Rohn

Do I have to open a traditional brokerage account to trade Cryptocurrency?

The Answer is No.  Investment into this asset class is achieved via the establishment and funding of a payment wallet. This is attached to a coin wallet or wallet in the case of Bitcoin, who has set the standard that many other cryptocurrency companies are following.

Can I use them to pay for stuff?

Bitcoin has managed to make some in the Government and some in the Private Sector take a stand on whether cryptocurrency in general and Bitcoin, in particular, can be considered “money”.

There is a lot at stake. If Governments around the world legitimize its existence, by allowing goods and services to be invoiced in and paid with Bitcoin.

We will have arrived as a whole new point in our financial market evolution, where the potential exists for all economic activity no longer needs to be measured against the benchmark unit of one country, i.e. the US Dollar, but instead, a totally non-political, independent monetary unit.

At the moment for example, there is reportedly over 100,000 merchants around the world who accept payment by Bitcoin, as well as some well-known global brands, such as PayPal, Microsoft, Dell and Newegg.

Crypto currencies the secret investment

Conclusion

There is absolutely no doubt that we will see either a unified Cryptocurrency Unit, call it a Coin for want of a better word, or a series of Bluechip Cryptocurrency Units evolving over the next 5-10 years.

What is missing at this stage is widespread Government acceptance, and hence classification/recognition and appropriate regulations that govern its use and its pricing mechanism for example.

There is also no doubt that from where we are today, there is going to be more potential for profit to be made.

An investor is advised however to choose their target company carefully, paying particular note of how they say new coins are issued, how many are in circulation at any given time, and what information is circulated that would give participants a full and fair chance to make an educated buying or selling decision.

Want to learn how to invest in Crypto Currency 

Crypto currency codex

Crypto Currency Codex

Caution, only invest the money you can afford to lose. Do not borrow money.

What are your thoughts on why so many people are investing in Bitcoin and other Altcoins (Cryptocurrencies)?  I’d love to hear from you …

Please Comment below

Yours truly. Jim

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If you are interested please also read

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How to Make Money from the Stock Market

Bitcoin and Cryptocurrency Scams Exposed

 

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4 Comments

Jim

May 2, 2018 at 9:41 am

Hi Bran,
Thanks for taking the time to read this blog. I’m glad you got value ou of it.
You pose some very good questions.
I’ve been a Fund Manager before. Our investment strategy involved systematic FX trading. This is sometimes referred to as “black box” or “algo” (algorithmic) trading. FX as an asset class is so much bigger than the Cryptocurrency market. The problem is, that unlike FX, Cryptocurrencies are not part of a wider financial “market”, which according to Wikipedia is “A financial market is a market in which people trade financial securities, commodities, and value at low transaction costs and at prices that reflect supply and demand. Securities include stocks and bonds, and commodities include precious metals or agricultural products.”
However, even though the commodity that we traded, i.e. FX, was part of a well-functioning market, I used to get my investors to sign a disclaimer saying that they acknowledged that trading FX was a speculative activity and they accepted that even though we may have risk management procedures in place, they may lose 100% of their investment.
Did I expect to, or intend to lose all of their money? Hell no.
Did it ever happen? No, but it went close.
One time a decision by a Central Bank Governor in a small country in Europe to change the way his country’s currency was valued, resulted in everyone that was holding that currency to sell. All at the same time. In a market, if there are too many sellers and not enough buyers, the price drops, a lot, and very quickly. The reverse happens if there are too many buyers and not enough sellers.
So what affects the price of Bitcoin and other Cryptocurrencies?
Rumors, gossip, Financial Commentators comments, fear, greed…
Anything but facts.
An old Wall Steet floor trader once told me that to be a successful stock trader you had to “buy the rumor, and sell the fact”!
So people that say they are making a killing are either, making a killing, or going to benefit from people like you thinking they are making a killing by buying Cryptocurrencies like Bitcoin, Litecoin, Ripple, and Ethereum, or by investing in Cryptocurrency related products.
So in my humble opinion when it comes to investing in Cryptocurrency, you do as much due diligence as you can, then you invest what you can afford to lose 100%, and then you forget about it and get on with your life. You look into the portfolio once a year and decide to hold onto it or sell it. Knowing that if the portfolio value is lower than when you purchased, that does not constitute a “loss”. It’s only a loss when you sell out at a lower price.
I hope that helps.
Cheers! Happy hunting. Jim

Bran

May 1, 2018 at 6:17 pm

I had thought about investing in bitcoin. I actually invested in an ASIC miner in the hopes of mining some, but it has become very very diffcult to mine even with ASIC miners and I’m looking for other ways of investing. I don’t understand what you mean when you say one should approach it as a 100% risk because its speculative in nature. How then are a lot of people making it out there with bitcoin? What are the factors which control it? Can you shed more light on that?

Jim

November 9, 2017 at 12:13 pm

There are really only two directional decisions to make, after which the answer depends on each individual’s tolerance for risk (risk appetite).
The directional decision is “should I invest in a coin or a coin ecosystem provider that will likely dominate the wider market for Crypto units used as “currency” in the years to come”? One is a decision that leads to an active role in mining coins only. The other leads to mining now, and the potential for passive price appreciation later.

If you favour investing in the Tesler of the Crypto industry, then Ethereum is the one for you, and the share price is likely to only move in one direction in the short term. But if you like to get your hands dirty and enjoy digging in on a daily basis and keeping busy, you still can’t go past Bitcoin. It’s the original. It’s the leader. And it’s the safest in terms of risk, of all the existing crypto coin offerings.

To participate in cryptocurrencies you don’t use a brokerage account like you do to trade stocks and bonds. You need to open a Coin wallet (virtual payment and receipt ledge account), and (this being one of the weaknesses) place your funds into an account controlled by the creator of the coin.

samantha

November 9, 2017 at 11:24 am

I am thinking of investing in Bitcoins , but I am not sure if I should or not. Would you recommend a special trader for it. Can you give me some advice. thanks

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