Advantages and disadvantages of cryptocurrency investment

Cryptocurrency investment: upsides and downsides

In 2017, cryptocurrency became the most profitable instrument of investment: for example, Bitcoin grew 20-fold, Ethereum—100-fold. Some people were just keeping cryptocurrency deposits, others were extracting profits from price fluctuations.

Investment in digital currencies is associated with significant risks in comparison with investment in precious metals or property. Is it a good idea to enter the crypto market? What crypto coin to invest in? What advantages and disadvantages does this kind of investing pose? These and other questions are answered down below.


Crypto coins

Advantageousness of investment

In comparison with conventional investment assets, cryptocurrencies come off as unpredictable. Incredible demand, amazing profitability and media attention do their thing: the factual value of a token exceeds its real value many-fold. As a rule, cryptocurrency prices act in cycles: first rise, then drop, and the cycle repeats.

Should you invest or not? Rather, yes, but be careful: you have to analyze news and trends and be ready to enter and exit the market at the right time. If you do everything right, you’ll enjoy returns very soon, and the profits will be a lot bigger than those of conventional investment methods.


Cryptocurrency prices shoot up


Algorithm of investing

  1. Decide how much you’d like to lay out. Potential profits, as risks, are high. This is why you shouldn’t invest more than you can afford to lose.

  2. Think about what tokens to buy. Read reviews on appropriate websites, study graphs and scrutinize the state of the market.

  3. Create a wallet for storing the cryptocurrency of your choice.

  4. Think through how you are going to get ahold of cryptocurrency. Optimal choices are cryptocurrency exchanges and electronic currency exchangers.

What cryptocurrencies to invest in

There are more than 1300 cryptocurrencies in existence. You have options: buy veteran and thus reliable coins, or bet on fresh ones with lots of potential. Most importantly, stick to the plan:

  • Study capitalization indicators of the crypto market;

  • Vet the technology at the foundation of every token;

  • Try to foresee future growth and decline trends.

You’ll definitely be safe with the top 10:

  • High liquidity;

  • Steady price growth;

  • High chance of future growth;

  • Trustworthy developers at the wheel.


Top 10 cryptocoins of 2017

How to invest in cryptocurrency

You can go different routes.

Trading

Virtual currencies are good for speculation because they are capable of multiplying investment in a short time. Buying cheap and selling expensive is not hard, and if you have market analysis, graph reading and accurate prediction skills, success is assured.


Buy low, sell high

Mining

You can buy powerful equipment and produce cryptocurrency yourself. In this case, you’ll have a passive crypto income, which you can save, sell or exchange.


Typical mining rig

Upsides and downsides

Before investing in cryptocurrencies, consider the upsides and downsides of such an undertaking.

Upsides:

  • Equities are out of reach of government;

  • Crypto transactions are out of sight of tax authorities;

  • High probability of price increase;

  • No inflation.

Downsides:

  • Irreversible transactions;

  • Threat of hacking;

  • Massive price fluctuations.

Conclusion

If you’ve taken into consideration all of the pros and cons and made the decision to invest in cryptocurrency, and you know what coin to buy and how you’ll have to deposit and withdraw fiat money. As it has already been mentioned, the best way to do it is through cryptocurrency exchanges (best suited for traders, who have the time for market analysis), for example, EXMO:


Cryptocurrency exchange EXMO

Or through electronic currency exchangers (best suited for those who just want to buy or sell cryptocurrency without extra steps), whose exchange rates are easy to compare by using exchanger monitor OKchanger in order to find the most favorable:


Electronic currency exchanger monitor OKchanger

Publicado en
16 agosto 2018