Is Cryptocurrency A Great Investment? Tips for new investors.
Since we now know more a little bit about Cryptocurrency, The Big Question is, is cryptocurrency a great investment? Given the fact that it is very popular these days, would you invest in cryptocurrency?
Each and every one has different opinions when it comes to cryptocurrency due to a number of reasons, one of its reasons is due to its very volatile state. As some people think that cryptocurrency is a new form of financial revolution, some individuals think of it indifferently, others might say that it is a bubble.
Is it really a bubble?
No one knows. No matter how different individuals such as analysts, business moguls, investors, traders, miners, and even the creators of their own respective cryptocurrencies knows if it would succeed to become a new and efficient financial revolution or a bubble.
Currently, the most prominent digital asset is Bitcoin.
As of January 9, 2018 9:25 PM GMT, 1 Bitcoin = 14,804.28 USD
Nine years ago, if you were the first miners on Bitcoin like Satoshi Nakamoto, the inventor of Bitcoin, Bitcoin was worth nothing. March 2010 came, the value became $ 0.003. It was the time where the first Bitcoin exchange happened. If you have invested on Bitcoin eight years ago on March of 2010 and luckily you kept a lot of it, mindlessly not knowing or being updated of its value through the years, fast forward to December of 2017, the value skyrocketed to $ 20,000. So by now, even when the value went down by January of 2018. You can still consider yourself lucky.
But if you are a new investor or haven’t invested in Bitcoin yet. You might be wondering if Is it too late to invest in Bitcoin? The answer might be a yes or a no, in between.
Why Yes or a No? It’s because Bitcoin’s value is currently at a high price even when the market of Bitcoin seemed to be down for this time. If you aggressively exchanged a large sum of fiat money for Bitcoin at the moment, you are in for a heart attack. Since Bitcoin’s state is very volatile right now, you can never know if the market will go up or down.
An example would be, On December 11, 2017, 1 Bitcoin costs about 17, 549 USD, so you were tempted to buy it with an investment of 20,000 USD, then on December 25 of 2017, Bitcoin went down to 14,341 USD. A newbie investor or anyone who traded their money at that time for a BTC probably had a heart attack.
Just because Bitcoin is trending and a number of people were making money out of it at that time, DO NOT AGGRESSIVELY INVEST ON A MARKET YOU DO NOT UNDERSTAND, and this doesn’t just apply to cryptocurrencies, this also applies to the stock market, business, and etc.
Here are some tips you can live by if you are a new investor:
- Study the Market first and foremost, it is very important you study what is going on to prevent being scammed, losing money, and preventing further losses.
- Buy a cryptocurrency at their cheapest values that has a potential to have a higher value in the future.
- Only invest on an amount that you are willing to risk for, buying a cryptocurrency at its cheapest value that you are not sure of if it would have the potential to succeed in being a new digital asset or it could go the other way where it could fluctuate and become bubble. An example would be the one stated above where you invested on Bitcoin on March of 2010 until it soar high to December of 2017. If you invests maybe just 5 dollars on Bitcoin of March of 2010, then losing it won't really be a huge problem for you if it did turn into a bubble as compared to other's who invested millions.
- Do not put all your life savings into a cryptocurrency, you are in for a train wreck.
- Do not treat it as if its your retirement fund. Due to it's volatality, Are you still sure of treating it as your financial getaway when you retire? Invest in your life insurance first.
- Always have an emergency fund.
- When you have decided on how much money you should invest or trade in cryptocurrency, I suggest you divide the money in investing in different cryptocurrencies with appropriate percentages. Cryptocurrencies tend to compete with each other in terms of value so it's best if you have a share in each digital assets.
- Don't just invest in cryptocurrencies, invest in other assets and study it such as the stock market, a potential business, real estate, and etc.
- Investing in cryptocurrency won't make you rich overnight. Like I said above, it take years to have a considerable amount of profit from a digital asset. If anyone says your investment would reach in an unimaginable value in a small amount of time, chances are you are apart of a ponzi scheme.
- Don't be scammed, since cryptocurrency has become very popular these days, it can be a subject to a new scheme which would result to a loss of investment. Always be alert of news. Apparently, crime is not new to cryptocurrency as well as what fiat currency has been experiencing for decades now.
- Seek advice from seasoned investors or traders. They have been there done that. They could give you advice on when to invest, hold and trade.
- Keep updated of cryptocurrency news and learn something everyday by being updated to this blog!
So is cryptocurrency really a great investment? My final verdict would be, Yes, it is a great investment BUT only invest on an amount you are willing to lose and use it with a lot of precaution.
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