Three Fundamentals to Learn Before You Start Investing in Cryptocurrency
We all should think of investment sooner or later. We should realize the fact that we cannot rely on the company’s salary for the rest of our lives. We must retire and turn our money into a passive income.
These days, technology has brought us many investment products, one of which is the cryptocurrency. Its origin is shrouded with obscure mystery. The first one was Bitcoin, and it was coined back in 2009 by a pseudonym programmer named Satoshi Nakamoto. This alternative money was meant to challenge the centralized monetary system that had always been monopolized by the conventional banks. Cryptocurrency facilitated asset transfers from the users worldwide, and it keeps the records in a public database that is encrypted using the blockchain technology.
Cryptocurrency’s prominence correlates with the rapid growth of e-commerce business. And since Bitcoin, there have been 4000 alternative coins regulated on the Internet. Investing in one of those can be confusing.
Understanding the Risks
Investing in crypto-money used to be a hype that could gain many enthusiasts. People thought that this tech was the future of e-commerce, and it would be less likely to experience a bubble burst. However, in 2017, Bitcoin did reach $20,000, yet in November 2018, the price plunged deep to $4000. You should expect this pattern if you are still interested in cryptocurrency investment.
However, the other altcoins seem to overcome that risk by innovating with the ledger system. For instance, IOTA crypto-money does not require miners to make the system generates new coins. Mining has been notoriously energy inefficient and exploitative to energy resources. IOTA engineers managed to solve that issue, and they made the cryptocurrency more promising to investors than the others.
Only Minority Using the Cryptocurrency
When you are investing in a crypto-coin, you should think of it as a long-term investment. Statista conducted a survey and found out that only 24% of adults in the US were familiar to the tech. Another data that may look scary was that only 2% of the whole population were using crypto-money in real trades.
Nevertheless, the use of cryptocurrency is growing elsewhere. According to 99bitcoins.com, here are 12 countries that are embracing cryptocurrency usage: Malta, Bermuda, Switzerland, Gibraltar, Slovenia, Singapore, Estonia, Georgia, Belarus, Hong Kong, Japan, and Germany. In Estonia, cryptocurrency is even a part of the government’s policy.
Diversifying Your Portfolios
The key to a surviving investment is diverse portfolios. You have to learn the patterns of all the available altcoins. You have to make sure that you are investing your real asset into a cryptocurrency that you have known well. The hype of this financial tech will last because cryptocurrency is undoubtedly the means of exchange in the future. However, like all other enterprises, there will be only the select few that will survive. And that risk is going to be your challenge.
According to Weiss Ratings, here are the ten safest cryptocurrencies to invest in: Bitcoin, Ripple, EOS, NEO, Steem, Ethereum, Litecoin, Cardano, Stellar, and IOTA. Research every one of those, and make your bets in three or four strongest ones.
