The days of just investing into a few stocks or a mutual fund for your future or some speculative financial gain are now gone. For the first time in a while, the world is beginning to start to see new types of currency available for use in transactions. Cryptocurrency has come to life over the last decade, especially the last 3-5 years as the news and talking points surrounding it continue to grow. If you’re not a crypto head though, you may be wondering what exactly it is and whether or not you can earn money through investing in different cryptocurrency.
What It Is
For now, cryptocurrency essentially serves as a value-holder that is usually backed by a blockchain service created to serve a specific purpose. What is a blockchain service? That’s another lesson entirely, but in short it is a decentralized transaction logging protocol that creates a chronology or provenance of its transactions. It’s decentralized because it is unregulated, which is one of the many reasons citizens and governments are skeptical about the asset.
However, we are starting to see to see online retailers accept crypto (primarily Bitcoin or other prevalent currencies) for transactions, essentially replacing money in these circumstances. This, however, is a slow and arduous process, so it’s unknown whether or not it will ever be widely accepted everywhere or even by most businesses. Some of the world’s largest corporations still don’t accept it, and, although it does seem to be progressing in that direction, the day when it finally becomes the widespread accept norm is a big question mark.
How To Invest
This doesn’t stop cryptocurrency from being a viable asset to invest in though. Investors can trade upon these blockchains and purchase their own cryptocurrency shares while those with the computer wherewithal go about mining for new coins. Even if this alternative currency, much like gold, never reaches the level of prominence seen by the likes of the US Dollar (USD) or any other global standard value-holder, it still fulfills the role of an asset to hold with upside.
Near the end of 2017, the price of Bitcoin skyrocketed near the value of $20,000 USD per coin, and it was probably this little PR boost around that time that really brought cryptocurrency to light for the public who had yet to hear of such a thing. Since then, things have regressed back to a less inflated state with the price of Bitcoin generally fluctuating between $8,000 and $11,000 over the course of the last year. For a new asset class, it’s actually been rather steady.
Types Of Crypto
The bigger name blockchains serve as a generally safe investment for the time being and those looking to hold long-term investments. You can easily put a few thousand dollars or more into a big-name, steadier cryptocurrency and treat it just like any other alternative asset – except, of course, for the fact that this one has the upside as being accepted as currency in some places with some great prospective for expansion and future growth.
If the long-game isn’t your strong suit and you’re more of a day-trader seeking some quick gains or even just the thrill of watching the market, there’s cryptocurrencies available for you as well. If you watch the crypto market, or keep track of the financial market as a whole, you likely come across updates about new cryptocurrencies becoming available to be traded on your platform of choice.
Crypto ICOs and the Upside Involved
While the blockchain may have existed before now, a new crypto making its way onto an official trading platform is basically like a stock getting its IPO on the market, except with more volatility depending on what company you’re comparing it to. (Crypto coin IPOs are actually referred to as ICOs, by the way.) These cryptocurrencies can be likened to penny stocks more so than a growing business getting a much-anticipated IPO, but you understand the comparison. With this novelty and unknown aura that accompany this new block comes volatility, and that is where you can earn money making a play on it.
Some of these new currencies that come onto the market may start out with a very low value in USD, with plenty of them entering the market under $1 per coin and some far less than that. This obviously presents an opportunity for tenacious growth if the technology backing it and people introducing it are right. Holding even just a few whole coins is a big deal if your currency of choice rises to prominence in the future.
For an even quicker turnaround however, you’ll want to note that these sometimes fluctuate wildly over the course of the day. Also not to be forgotten is the fact that crypto trades at all hours and all days, unlike traditional institutions like the New York Stock Exchange where the markets traditionally open at 9:30AM EST and close at 4:30PM so everyone can go home. This is part of decentralization, and the trades can happen at all times. This means you have a keep a closer eye on the market than you would if you were trading in more traditional stock options.
Because of this factor, prices are always changing and somewhat erratic with these newer, smaller blockchains. This presents your chance as an opportunistic profit-chaser to get in on the action and capitalize. That is, if you play your cards right and have access to the right information rather than just trading random currencies, that would be preferential.
Multiple Strategies Can Benefit
Cryptocurrency investing is not just for speculative investors or enterprising college students. Earning money through investing in cryptocurrency is something that’s a very real, very promising opportunity for every form of investor out there. Whether you’re a retiree, in your prime working years, or even just a teenager looking for investing experience, there are numerous ways to invest in cryptocurrencies can benefit your investing knowledge and, potentially, your wallet.
Bruce Hebert is a successful blogger who publishes content about business, investment, and cryptocurrency. Bruce wants to help his readers make the most out of their earnings by understanding these topics and guiding them in making investments