Forget shares and mutual funds and opt for crypto currency, if you are on the lookout for investing your money in any place that offers you amazing returns over investment in a couple of months.
Let’s take Bitcoin for example. It is the oldest crypto currency and had a value of $0.08 in July 2010. The average value of one Bitcoin in December 2017 is approximately $13955. Can you imagine your worth had you invested only two Dollars in this virtual currency in 2010?
You can rest assured that the value of this decentralized digital currency that is taking the world by storm is going to increase further in the years to come. However, as with any other investment, there have been occasions when the value of Bitcoin plunged by nearly 30% in a single day.
Crypto Currency Investing
You might not be able to invest in Bitcoins now, considering its high value and given its volatility. However, you need not worry as you now have the opportunity of investing your money in other types of virtual currencies that have a low value. The main thing to watch out for during crypto currency investing in a specific or multiple digital currencies is to examine their performance for the past few months.
This will provide you with an opportunity to judge which one of them is performing well. You should also keep an eye on recently launched virtual currencies, as you can easily afford their entry load. With a bit of luck, an investment of $100 today might make you a millionaire or even more after a couple of years.
If you want to get started investing in crypto coins there is a great course for beginners called Crypto Currency Codex – you can read my review HERE.
Setting Up a Goal
Setting a target is one of the most important aspects of crypto currency investing. You should never attempt to time the market. The rule is the same as when investing in the stock market. Just because a particular virtual currency is on a bullish run does not mean that its value will keep on increasing every day.
As mentioned above, the value of Bitcoin plunged by more than 30% in December 2017. Wise investors always set a target and sell off their virtual currencies once its value reaches the target. They then wait for the market to plunge, and reinvest a part of the cash earned.
This ensures that they regularly amass wealth irrespective of the market trend. In simple terms, decide on the return on investment you desire, and sell off your holdings the moment it reaches that value.
Experts Time the Markets
Other investors, especially those who have lots of money to spend, depend on the law of averages. They study the rise and fall of specific crypto currencies for the past few years and are able to accurately predict when the market is about to rise or when it is due to crash.
These investors book profit by selling a majority of their holdings when they believe that the price of their crypto currency has reached its summit. They then wait for the bubble to burst and the price of the virtual cash to drop to a specific level before reinvesting their cash on it.
However, you should never adopt this policy as it is timing the market… a strategy best left to investors who have rock solid knowledge about the cycle of zeniths and nadirs.
Law of Averages
According to the CryptoCurrency Institute, ever since Bitcoin and other crypto currencies appeared on the market, the prices of such virtual currencies will keep on increasing. If you were unfortunate enough to purchase a crypto currency just before its prices dropped, purchase more of the same when the price is low. This will allow you to recoup the losses caused by the bearish market.
Points to Ponder
Instead of purchasing crypto currencies through a trader, buy them directly. This allows you to save the investing fees charged by trading companies. You now have the opportunity to convert virtual currency into cash, a feature not available a couple of years ago.
You will be surprised to that Nasdaq, the second largest stock exchange in the world will enable Bitcoin future trading by mid 2018. This tells a lot about the future and the importance of this virtual currency. It shall not be long before other crypto currencies are listed in the stock market too.
Nasdaq has paved the way for other stock exchanges to list virtual currencies to enable crypto currency trading in the future.
Keep Your Virtual Currency Secure
Crypto currencies are traditionally stored in digital wallets having a high level of encryption. However, highly skilled hackers pose a constant threat to your digital assets.
Therefore, it is vital that you store your valuable assets along with your private keys (usually a 256 bit number and since it is the golden ticket that allows individuals to spend their bitcoins) in a physical device not connected to the net, such as a pen drive. You can also store that information in secure hardware wallets, available for approximately $100.
Individuals planning for crypto currency investing should opt for Ripple, as its price is extremely affordable. Other popular digital currencies apart from Bitcoin include: