The New Boom For Cryptocurrency Has Investors Asking How
If you’ve been reading about the topic for awhile now, you’re probably of the mindset that cryptocurrency, for instance, could be your key to capitalizing on the latest market trend. But what’s really the new stock market trend? Many would say taking the money out of the market and putting it into digital currencies. In 2009, everyone saw the introduction of the first totally decentralized cryptocurrency, bitcoin. Now, eight years later, the hype is picking up at breakneck speed, growing into the hundreds of billions of dollars for a market cap.
Those who invested early have been able to make millions. But what about now? Even though there are now hundreds of cryptocurrencies, not all will survive the test of time. This having been said, choosing the right cryptocurrency will be critical to your own success as an investor. Two years ago, bitcoin price was roughly $250 and now it’s over $4,000. Ethereum, another popular digital currency was at $8 at the beginning of the year and has peaked at $400 in less than a year.
Some say this is a cryptobubble but just as the dot com boom produced several long-standing winners like Amazon and Google, so could the crypto boom. The risk, reward ration is wide and this is what makes investors interested. If you want to invest in cryptocurrency, you need to know where to start. One place to begin is finding the right exchange like Coinbase, Bitstamp, and Kraken. If there is no bitcoin exchange in your country, there’s a site called localbitcoins.com where buyers can purchase directly from other people. People can purchase fractional bitcoin as well.
These are known as Satoshis. It breaks down like this: one hundred thousand Sitoshis is equivalent to 0.001 bitcoin. Basically if you have a finite amount of money that doesn’t equal one bitcoin, you can invest in fractional bitcoin. The issue for online exchanges instead of desktop wallets, is that these exchanges can be hacked so its recommended to have a private key for your wallet.
Once you own your bitcoin or other cryptocurrency, it’s pretty straight forward. Just like any listed stock, each exchange will offer certain types of currency. Case and point, you can’t buy shares of Apple on both the Nasdaq and New York Stock Exchange. It’s also important to keep track of your investment. Just as with stocks, you can learn from your mistakes with cryptocurrency.
Also, greed can get in the way of gains so be patient and make sure to take profit when you can. The biggest takeaway is that cryptocurrencies are unpredictable. It doesn’t matter how much you believe in crypto, the market is still the wild west so a “life savings” size investment is probably not the best idea during this stage of the market.