Every day it is more common to hear that investors, both professionals, and amateurs, are following the trend of investing in cryptocurrencies.
Invest in Cryptocurrency
The truth is that the cryptocurrency business, of recent birth, is quickly taking the place with traditional currencies and investments, such as stocks and gold, which have benefited many, but they also put an alert to banks and other institutions.
We can define cryptocurrencies as virtual currencies, independent of the regulation of governments or banking institutions, whose value is determined mainly by supply and demand, as well as the confidence of investors.
Therefore, they are not materialized in coins or bills, nor do they allow traditional exchange by check or debit cards.
Because they are decentralized from foreign currency (forex) rates, free of regulations and independent of other values such as gold, they have increased their value exponentially, although it is undeniable that they have great volatility and can involve enormous losses, in fact, it is said that almost 80% of independent investors lose their capital operating cryptocurrencies.
Advantages and Disadvantages
All opportunities offer advantages and disadvantages, likewise, the cryptocurrency business has benefits and advantages that are well worth it, but they are also prone to risks that you must be willing to assume.
- Most are built with security and privacy in mind. This means that you can expect transactions to be private and secure.
- If cryptocurrencies are legalized and fiscally declared, another way will be opened for transactions.
- They have low transaction costs compared to other digital payment methods.
- Through the mining process, anyone with a computer and access to the internet earn money.
- Because it is a volatile market, it can be a very profitable investment.
- They allow transactions anywhere in the world in a simple way, opening the possibility of accessing financial options to people who live in countries where they do not have them.
- They are decentralized, which means that they cannot be manipulated by central governments.
- Transactions are fast, permanent, and difficult to counterfeit.
- They are not inflationary, there is always a finite number of coins to be created.
- They are private.
- Secure and private transactions can make it easier for people to circumvent the law.
- Third parties involved in cryptocurrencies, such as purses and exchangers, do not always have the same security.
- The value of cryptocurrencies changes and laws on how to tax them are confusing. It may not be clear how much value the coins have.
- The private nature of transactions can make it easy to avoid paying taxes.
- They are only accepted by certain stores. Between that and the big fluctuations in the price, the costs saved in the transactions could be useless.
- The mining of certain cryptocurrencies is very demanding in terms of resources, so it requires specific hardware capable of mining.
- The market is very volatile, and the value of currencies can change drastically in a short period of time. For example, in 2017 the Bitcoin went up from $ 1,000 to $ 20,000and then dropped to $ 6,000 at the beginning of 2018.
- The currencies that you negotiate today for legal things can be used for illegal activities tomorrow. Although all currencies pose that risk, cryptocurrencies facilitate this.
- Not being controlled by a central bank increases its volatility since an “invisible hand” cannot correct the markets.
- If something goes wrong with a transaction or if the coins are lost there is no way to recover them.
- If someone steals coins, there is no easy way to recover them and there is no system to protect the value of your asset.
- Some cryptocurrencies lack the flexibility of its centralized namesake due to its non-inflationary nature.
- Cryptocurrencies are not really anonymous. The public ledger system could provide others with information about previously unknown activities.
How to Trade with Cryptocurrencies?
If after analyzing the advantages and disadvantages of these virtual currencies you have decided to enter this world, you need to learn how to obtain them.
Before starting with the acquisition of cryptocurrencies you will need to register a wallet, which is nothing more than a user with several levels of security to protect your investment.
Then, you can have access to any number of cryptocurrencies from any of these sources:
Involves allocating digital equipment (there are people who use tablets, cell phones, and computers) with Internet access, it consists of validating and registering transactions in the chain of blocks, and the beneficiary companies make payments through cryptocurrencies.
Like another currency pair, you can use a website and buy or trade a certain amount of these coins.
You can offer services or products in a website, blog, or digital store and receive the compensatory payments in the cryptocurrencies that you enable, you can also perform tasks in pages that pay with fractions of cryptocurrencies.
Management and Creation of Content:
Some web pages offer payments in cryptocurrencies to their users by hanging quality content according to their line of interest (writings, images, music, among others).
It is not the same as buying and selling, this supposes a knowledge of the market in the sales platforms, it is the same as the stock market, but trading cryptocurrencies instead of stocks or stock values.
How to Invest in The Cryptocurrency Business
Once you have purchased some assets you have two options, the first and most conservative is to keep them in your wallet as a way of saving.
The second option is to invest and/or manipulate your savings in digital currency to increase your income; In this regard, there are several ways to obtain benefits.
Traditionally brokers or exchangers are used to investing in the stock market or in forex, but there are many of these software’s that are allowing their users to operate with cryptocurrencies as well as with euros, shares, oil, among other values or raw materials.
The most important thing when entering the stock market is to establish an investment strategy. For those who start the safest strategy is to follow trends, which means that when most users are selling it’s time to sell, and the same happens with the purchase.
Another strategy, product of the knowledge of the market, consists of operating between the ups and downs of the value of the cryptocurrency in which you invest.
Put simply, after analyzing the tables and graphs you are able to determine when the price will be so low that it will start to rise (time to buy) and when it will be so high that it will start to fall (time to sell).
It is important that you are aware of the news regarding cryptocurrencies in general, positive news increases confidence and with it, value, while negative news has the opposite effect.
Finally, take full advantage of the functions and tools offered by the broker or exchange of your choice, it is not necessary that you are attached to the computer to know if you must sell or buy your preferred cryptocurrency.
Many of these offer alert services when the news is published about the currency or value you operate, you can also program purchases and automatic sales within a window, so when the market adapts to what you expect, you can act without neglecting others matters
Common Cryptocurrencies and Places to Operate Them
There is a large number of digital currencies available to invest, however, the most important thing, in this case, is the confidence of investors, so we show you the cryptocurrencies with the highest flow in 2018:
- Bitcoin, operating more than 54 billion dollars
- Ethereum, operating about 27 billion dollars.
- Ripple, capitalized on a stock market of about 7 billion dollars.
- Bitcoin Cash, managing 5 billion dollars.
- Litecoin, handling close to 2.5 billion dollars.
- NEM, capitalized on the stock market of 2.4 billion dollars.
- Dash, reached 1.4 billion dollars.
- IOTA, also with 1.4 billion dollars.
- Ethereum Classic, with 1.4 billion dollars equally.
- NEO, operated 937 million dollars.
Operating cryptocurrencies without downloading applications will merit an Exchange while doing so through programs will require a broker. Making a list of 5 of each, the most recommended are:
- IQ Option
Just as many are making money today through digital currencies, so can you.
You can start by just buying some and then operating in a wallet and selecting the type of market that suits your circumstances.
The gains will not come overnight, this requires effort, dedication, patience, and the awareness that you can actually lose much more than you can earn if you don’t play your cards right.
Despite the risk, once you understand how to invest and generate profits without spending too much time, you will understand why so many people are joining the trend of investing in the cryptocurrency business.