Hi Platinum Crypto Followers,
Today’s article focuses on Investing in Cryptocurrencies. Cryptocurrencies have been a major topic of intense discussion over the last few years, with major news outlets and industry experts.
There have been so many stories of people becoming overnight millionaires and, at the same time, stories of people who lost hundreds of thousands of dollars hoping to make a quick buck? This article addresses the best way to get started and watch out for.
HOW TO BEGIN INVESTING IN CRYPTOCURRENCIES
Investing in cryptocurrency has become a very attractive venture. Some people however like to refer to it as risky undertaking due to the volatility and decentralized nature of these digital currencies. Either way, a lot of people and more so organizations are continually buying and selling the coins.
Initially, cryptocurrencies were used mostly in the dark market. This usage was backed up by the fact that the blockchain technology is decentralized and thus cannot be controlled by authorities. Consequently, a lot of people have been victims of scams involving cryptocurrencies. The same nature made cryptocurrencies to be unpopular among traditional banking institutions: the coins were out to do away with the institutions.
Now, people have grown to embrace these digital coins. There are now many cryptocurrency exchange platforms all over the world dealing with various cryptocurrencies. Companies have even started their own blockchains and cryptocurrency which are used in most of their payments. This increasing popularity of cryptocurrencies has therefore driven a lot of individual to invest in them.
HOW (AND WHERE) TO INVEST IN CRYPTOCURRENCY
There are various ways and places where one can choose to invest in cryptocurrency. Apart from just trading one can choose among the below investment opportunities.
- Buy, hold and sell: This strategy works on allowing the price of a coin to rise in order to make profit. One buys the coin at a specific price then holds it until the prices are higher then sells at the high price. This king of cryptocurrency investment can be done on exchange platforms or trading site.
- Mining: this is the process by which one mines new coins in the blockchain. The miners only validate transactions and are in turn rewarded with new coins.
- Opening an exchange platform; one can also make an investment out of an exchange platform. The transaction fees payed and many other fees can be a good source of money.
- Offering trading advices: technical and fundamental analysts get payed by traders for offering advices on when to trade. they use their skills in predicting various cryptocurrency prices. They help the buy crypto to invest in other crypto or but the crypto to hold and sell later.
- Blockchain projects; companies in various fields have developed projects on the blockchain that are earning them a lot of money.
ARE BANKS INVESTING IN CRYPTOCURRENCIES?
In many countries, banks have moved from throwing stones at cryptocurrencies and are now embracing the change. Most of these institutions are now harnessing the power of blockchain technology in running their activities.
Recently, one of the biggest banks in America, Bank of America has started exploring the crypto world through blockchain technology. The bank reportedly has the highest number of live patents when it comes to blockchain technology. Apart from the Bank of America, a New York based bank known as JP Morgan Chase announced the launching of a new cryptocurrency known as JPM Coin. This bank is the first bank in the U.S. to launch a cryptocurrency.
On the other hand, there are some who argue that banks are still waiting for defined legislations that will give then a green light on investing in the crypto space. Also, some say that they may be waiting for the price of bitcoin to reach a reserve currency status before they start investing.
Examples of other banks that are investing in cryptocurrencies globally are: Bank of England, UBS bank in Switzerland, HSBC bank in Hong Kong and Deutsche Bank in German among others. Most of these banks have entered into a partnership with blockchain based firms to realize these projects.
THE TOP 10 BITCOIN AND CRYPTO INVESTING SITES
Many people have searched; how to invest in crypto? On the other hand, others have searched, how to invest in bitcoin? Digital currencies can only be transacted online since they are virtual: cannot be used in the real world. There are therefore sites known as exchanges that help either a trader or an investor deal in these coins. These exchanges vary from the types of coins they support, security, modes of payment and accessibility among others. Below is a list of the top ten exchanges:
Coinbase is a US based exchange platform that is popular for its high security. Coinbase also offers an exchange wallet to its users where thy get to store their crypto assets.
This platform stores around 98% of their customers’ assets offline away from cyber criminals. Also, the platform has low transaction fees.
LocalBitcoin has a very user-friendly site: they have pages for every country where one can exchange crypto with their own currency. Apart from that it can also allow you to get information on the seller’s location whether they are in your country or outside.
They also have very good security backed up by their inbuilt escrow system.
Kraken is an exchange based in San Francisco, USA with the largest Euro-to-crypto market globally. It allows one to exchange crypto with multiple fiat currencies.
This is a bitcoin-based exchange platform that is very secure thanks to its 2 –factor authentication. Also, the exchange operates a dark pool where large institutions can transact large amounts of crypto anonymously.
eToro is well known for its user-friendly platform that offers investors a practicing account before they start trading. Being based in UK, the platform also has users all over the united states. It also offers a variety of digital assets to trade with.
This site is known for the variety of digital assets they deal in. More so it also has its own coin known as Binance Coin (BNB). The site also has very low fees at 1% of the trades.
This exchange is well known for its free crypto trades. This feature has earned them a position in the top ten despite the fact that it is still very young. They deal in bitcoin and Ethereum but are planning to increase the pool to other cryptocurrencies.
Bitstamp is a bitcoin-based exchange in the US. According to reports, this site was the first to get a license for trading bitcoin in the USA.
The exchange is very convenient when it comes to its mode of payments. It allows direct deposits of bitcoins and also supports both credit card and debit card for payments
This site is known to be among the sites that best suite investors rather than traders. This is so since they offer investment opportunities on their site. It is also recognized for its advanced features that accommodate people from different countries despite of being a china-based company.
Bitfinex is among the most trusted exchanges in the USA. It also provides different trading options: trading, margin trading and margin funding. The platform deals in a variety of cryptocurrencies.
CRYPTOCURRENCY SCAMS: HOW TO AVOID THEM
The rise in cryptocurrency investments has also attracted scammers who decided to make profit by stealing from innocent clients. Scams are one of the major setbacks the cryptocurrency world is experiencing. The rate of these crimes has been reportedly very high especially in regions that are new to cryptocurrencies. Approximately $ 9 million is lost in these scams every day. A lot of people have fallen victims to these scams which are usually posed as good investment opportunities.
Luckily, there are some trends that crypto scammers are used to which helps someone to differentiate a scam from a legit investment opportunity. Some of these scams always come in the form of
ICO (Initial Coin Offering)
ICOs are initiatives taken by cryptocurrency platforms to raise money that is needed to fund a project or to promote a new coin. One gets to invest in the specific company by buying tokens that can later be exchanges for fat currency. Scammers have however used this avenue several times to scam investors. The following are some of the red flags that will help one detect a scam
- Luring investments: Most scammers tend to promise the early investors tremendously high returns in the bid of attracting more people to themselves.
- High valued tokens. Many ICO dabbed scams tend to offer tokes that have a very expensive compared to even the major cryptocurrencies in the market. In all cases, these tokens are usually valueless and cannot be used anywhere else.
Ponzi schemes, also known as pyramid schemes, are one of the major crypto scams taking place all over the world carried out by self-imposed crypto firms. These are companies pose as investment firms and later steal from their investors. They do so by being in the cryptocurrency markets for a while after which they disappear
Many investors have been victims of these schemes having invested millions. To avoid being victim of these schemes, you ought to avoid companies with the following characteristics:
- Extremely high returns: these companies tend to give returns as high as 50% on one’s investments
- Short operating period. These schemes are normally very young in the market. There is one case scenario of a Ponzi that only lasted for two weeks while others may go as far as months.
- Pressure to invest: most pyramid scheme will even have agents all over pressuring people to invest in the company.
The most important thing to do before investing in cryptocurrencies is doing a good background check on the companies. Check whether they are registered and if they have any of the above characteristics.
HOW TO MAKE PROFIT WITH CRYPTO CURRENCY
The main aim of cryptocurrency investment is to make profit in the best way possible. The volatility of these coins comes in handy in recognizing profit in any investment done. Additionally, choosing the best cryptocurrency to invest in will go a long way to ensure a good investment deal. Outlined below are some of the ways in which you can make profit while investing in cryptocurrencies 2019.
- Buying crypto when the prices are low and selling when the price is high. This allows you to make a profit from trading cryptocurrencies. One needs to know when to enter the market and then to exist. Technical analysis can come in handy in helping you know when to buy and sell.
- Using stop losses and take profits. While trading cryptocurrencies it is advisable to use these two elements. A stop loss will help you limit losses in a case where the prices go too low than you expected. On the other hand, take profit help you decide on the profit you want to make by putting a mark higher than the current price.
- Buying and holding it involves purchasing coins. Letting them build up and finally selling them to make profit. This method of making profit however requires one to be keen when it comes to the ever-fluctuating cryptocurrency prices. This method is common for players investing in cryptocurrencies.
- Dividends: Some currencies pay dividends to people who hold their coins for a long term. The amount of dividend will depend on the number of coins in your possession.
WHAT IS THE PROCEDURE FOR INVESTING IN CRYPTOCURRENCIES?
Before one decided to invest in cryptocurrencies, they must have a plan and acquire all the necessary tools. In order to deal with cryptocurrencies, one has to:
- Open an account with an exchange: exchange platforms require their users to have account with them from which they will be coordinating all their crypto operations.
- Get a wallet: This wallet is used to store all your crypto assets. However, it is worth noting that these wallets only store keys that enable one to transact: private key and public addresses. There are two major types of cryptocurrency wallets: we have software wallets and hardware wallets. Software wallets store the keys online while hardware wallets store the keys on hardware devices and papers.
- Link up your bank account with your exchange account. This linking will help you to comfortably transfer funds between the two accounts.
One can now easily trade or invest in cryptocurrencies once they have followed the above requirements. Also, it is very important for one to do a good research on the exchange platforms, wallets and coins that you will be dealing with to avoid being victims of scams.
BITCOIN AND YOUR INVESTMENT PORTFOLIOS
BITCOIN AND YOUR INVESTMENT PORTFOLIOS
In the crypto world traders and investors are now turning to investing in bitcoin rather than just trading with it. Some even term it as the digital gold coin due to its high value and dominance in the crypto market. Recently, investors have started to turn to bitcoin as a safe haven rather than fiat currency. More so, of all the 1600 plus cryptocurrencies, bitcoin is the most adopted one and it is now going mainstream.
Bitcoin is presumed to eventually replace the existing financial institutions by becoming a universally adopted currency. This presumption has however faced some opposition from financial advisors who claim that the cryptocurrencies cannot be relied on due to their decentralized nature. Despite the general perception, bitcoin investment has grown massively since its launch in 2009. Bitcoin has been listed among top cryptocurrency to invest in for the last few years.
On the other hands, blockchain technology is an investment portfolio that is taking over the technology. From transportation, logistics and automation, blockchain is being used to transform operations.
Hopefully, you have enjoyed today’s article. Thanks for reading!
Have a fantastic day!
Live from the Platinum Crypto Trading Floor.
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