Cryptocurrencies are here to stay: Here’s what you need to know before you invest
Cryptocurrencies are still a relatively new investment opportunity and remain unregulated. This means that if you choose to invest, you will be entering a highly volatile marketplace and you could easily lose your entire investment.
However, since Bitcoin changed the financial scenery back in 2009, when it first started trading, these cryptocurrencies are gaining traction and becoming an ever more popular investment option for those willing to shoulder their high risk in order to speculate for potentially massive returns.
If you aren’t sure what you are doing, the best idea is to invest in an alternative option while you learn about this intricate market and learn to identify the patterns and rhythms that cryptocurrencies follow – assuming that they do follow them! Even if you have no intention of investing, understanding these currencies now will certainly be of use in the future.
Which Currencies Should I Look At?
Bitcoin may have been the original, but since then over 700 have appeared. Ethereum and Litecoin are among the more popular and Litecoin was the first to follow in Bitcoin’s footsteps back in 2011. The type of coin you choose is down to a few things: whether you are an individual or a business, which one you feel most confident in following closely and which your research suggests will emerge as a leader in the near future.
Information is the key with all investments and as cryptocurrencies are such a new form, the amount of research and information is still relatively small. This puts you at both an advantage and a disadvantage. On the one hand, you have relatively little in historic data, on the other, no one else knows how this is going to go, so the playing field is relatively level. You should use as many sources as possible to establish the value of each coin and look into trending coins to see how the market lies.
Follow the Fluctuations
Cryptocurrencies can be treated as both long term investments and used by day traders to achieve quick wins. How much you choose to invest depends on your intentions, how much you have, and how much you are prepared to lose.
It is well worth spending a couple of weeks watching how a cryptocurrency like Bitcoin fluctuates and searching for patterns in the movement. In this time, you should also be glued to the news about cryptocurrencies, something you should already be doing as part of your research, to see what, if anything, can be identified as the cause for a sudden movement.
Once you are comfortable following the fluctuations of the currency, then you can start to think about investing seriously. To do this, you will need to find an online wallet to store your currency and a suitable exchange site. You should never leave any currency on an exchange site, as these sites have been hacked before and you could risk losing everything.
Cryptocurrencies have sparked a new era of economic exchange and while it is still too soon to project how global economics will be changed, it is worth getting up to speed with these currencies, even if you don’t plan to invest. They look a lot like the future and so far, they are here to stay.
