Cryptocurrency - What You Need To Know About Investing Simplified!
Have you thought about investing in the crypto currency market? Or wanted to, but when you tried to do some research, you are hit with terms like - tokens, alt coins, secure wallets, ICO's, and so on. If your anything like me, I'm sure it made your head spin!
So in this blog post, I will break down and simplify (as much as possible) the Crypto Market, with a new investor in mind. Hopefully I can offer some guidance and clarity.
It's Your Hard Earned Cash.
Investing in anything comes with a certain level of risk. What I aim to do in this post is provide enough simple and clear information to make that risk as low as possible and hopefully give you the best chance of getting some great returns. With that said, this article contains; research, opinion and advice, from someone who has some skin in the game - no guarantees.
Breaking Down The Jargon.
In this paragraph, I'm going to explain the meaning of some of the terms and acronyms that you will come across when doing your own research into the crypto currency market. Some of the most common ones are;
Altcoin - this simply means alternative coin. The term applies to any coins which were launched after the success of Bitcoin - usually trying to target any perceived limitations that Bitcoin may have. Since Bitcoin was the first, any coins that came after are known as Altcoins.
Token - crypto tokens, like tokens in the real world, are generally used to represent something else. In the real world the usually represent or replace real money or cash. In the crypto world they can represent a variety of assets or utilities.
ICO - ICO stands for initial coin offering. In an ICO, a certain amount of crypto tokens is sold to investors or speculators in order to generate capital. The tokens that are sold are advocated as future units of currency.
Crypto Currency Exchange - a crypto currency exchange, or sometimes known as a digital currency exchange (DCE), is a business and/or platform that allows users to trade crypto currency for other assets. Such as conventional money or other crypto coins.
The platform that I use is Bitpanda. I will get into the reasons that I chose Bitpanda later in this post.
Current State Of The Crypto Market.
Bitcoin is still the king of the Crypto market, with Etherium traditionally its closest competitor - ranked number 2.
Despite these two being the big names in the market and the ones that you are most likely to be familiar with, there are a huge number of altcoins in the market. According to the data of CoinMarketCap, there are currently 1,106 tokens in the market. Out of these, 868 act as currencies. That's actually more than the number of paper currencies in use in the world today! The overall market capitalization of Crypto is: $158.9 Billion - no small change!
I know 868 different currencies is a big number to get your head around, so I will list the Top Ten here;
The top 10 Currencies at the time of writing the article are:
- Bitcoin (BTC)
- Etherium (ETH)
- Ripple (XRP)
- Bitcoin Cash (BCH)
- EOS (EOS)
- Stellar (XLM)
- Litecoin (LTC)
- Tether (USDT)
- Cardano (ADA)
- Monero (XMR)
So Why Is It Such A Good Idea To Invest In The Crypto Market?
Here I will go into the reasons for which I believe it is a good idea to invest in the the crypto market.
- It's an alternative to traditional banking (who's been ripping us off for years - or at least been taking advantage of us).
- It's an interesting store of value and a new competitor to gold, to which you can escape or change, when your favourite currency is losing value.
- It's a scarce resource.
- The best is left til last! THE RETURN ON INVESTMENT!
I will give you a few examples of what sort of returns could have been made if you had invested at the start of 2017 (the most recent full year to look at records of). We will use a hypothetical $1,000.
Returns On Investment 2017
As Bitcoin grew in value over the year 2017, a $1000 investment in would be worth around $15,000 by the end of 2017, which represents a return in the region close to 1500%. Not to be outdone, an investment in Ethereum would have resulted in even more spectacular returns with the initial investment being worth over $115,000.
There were massive gains to be had by investing in a number of the more established coins. An investment in Litecoin would have grown by just under 5500% and left you with a nest egg of $54,530, while putting the same amount into Monero would’ve left you with $31,000, investing in Dash would have resulted in a return of over 10000%.
While these investments all resulted in extremely healthy returns they were still outperformed by a number of other cryptocurrencies. NEM’s XEM currency is one of the more overlooked coins in the top 20 but would have left an investor with a figure of over $500,000 to play with. The same investment in Stellar Lumen’s XLM would have turned into $360,000. However, all of these investments were outperformed by Ripple’s XRP late increase in price that still hasn't lost momentum. Ripple had an extremely successful 2017 and rode a wave of investment late on in the year to reach a price in excess of $2.00 (now over $3.00). For any investors that purchased $1000 worth of XRP and held onto their investment for the entire year, they would have been rewarded with a return just shy of $500,000.
These figures highlight the benefits of long-term investing and sticking to the principles of buying and holding. In addition, it’s still not too late for new investors to get involved and there are ways to build a solid portfolio for approximately $500. (credit - coincodex.com)
Going forward, the cryptocurrency market still has plenty of opportunities for investors interested in the most successful projects.
So if reading about these MASSIVE returns has whet your appitite for investment in the crypto market, and you may have a currency in mind, the next thing to consider is, which crypto exchange to sign up with.
Which Crypto Exchange To Use
The exchange that I use is Bitpanda and it is the one that I would recommend. There are a few different reasons for this which I will list below;
- Simplicity and Speed -
Bitpanda's biggest advantages are speed, and ease of use while maintaining reliability and security. Purchases, sales and transactions are processed in real-time and purchases usually take less than 1 minute. This can give you an edge in the fast moving world of the crypto currency market.
- Continious Development and Improvement -
The team behind Bitpanda are constantly working on improvements and new features, while keeping the platform open 24/7 - 365 days a year. Also with their 'always on' customer support your never too far from finding a solution to your individual problems.
- Security -
A big one! With a lot of money at stake, you want to be able to trust your crypto exchange to maintain and continuously update their security to the highest levels. This true of Bitpanda and with thousands of happy customers, the platform has become Europe's leading crypto exchange.
- The Bitcoin rule -
I've left the best til last! One of the first things that drew me to Bitpanda is the fact that you can open your account with them without first buying or owning Bitcoin. This is a rule in some other crypto exchanges, such as Coinbase. This rule is restrictive because while Bitcoin is the No.1, as we've seen in previous paragraphs it was outperformed for return on investment (ROI) by some of the Altcoins. Not withstanding the fact that Bitcoin is sitting at over $6,000 (at the time of writing this article). This would represent a sizable investment! You can buy pieces of one Bitcoin for less of course, but I would rather have the option to skip this altogether.
There is opportunity in the market right now so if your thinking about getting involved, don't wait!
To open and account with Bitpanda or find out more information. Click the link here
Once again, I am grateful for you taking the time to read this post and I hope it has been of value to you.
Have a great day,