"The future of money is digital currency." -Bill Gates
If Bill said it, it must be true; digital currency is on its way to conquering the financial world and changing the way we use money. As we make our way deeper into the digital age, paper money and government regulated currencies are on their way out the door.
Should the changes to the way we use money sadden us? Not! Instead of being a stickler for how things used to be, it would be extremely wise to follow the trends of virtual currency to invest in their success and make some cash before the popularity of cryptocurrencies blows up and it's too expensive to invest.
But, maybe you're asking yourself, how does one invest in cryptocurrency? Have no fear; Superprof is here to save the day and instruct all interested ones about safely investing in different cryptocurrencies. Let's get investing!
The Rise of Cryptocurrency
Before the early years of the 2010s, the term cryptocurrency was barely uttered by persons or heard in daily conversations. And, while Bitcoin was created in January 2009, it hadn't yet piqued the curiosity of serious investors and trend predictors in the business & finance industry.
However, fast forward a few years to the start of the 2020s, and cryptocurrency is all anyone can talk about it!
So, the question arises, how did cryptocurrency become so mainstream and popular? Before answering the previously mentioned question, it is important to consider how cryptocurrency started.
First of all, as was previously mentioned, Bitcoin, the first cryptocurrency, was established in 2009 by the mysterious and not yet truly known Satoshi Nakamoto. When Bitcoin went public in early 2009, not many people knew about it, yet it was groundbreaking because mining was introduced and the blockchain software was implemented.
Nonetheless, in 2010, bitcoins were not yet valued. Only mining was occurring; however, as the idea of creating a digital currency that is decentralised and encrypted catches on, additional cryptocurrencies arise, and Bitcoin is no longer alone. By 2011, there are other cryptocurrencies known as Litecoin and Namecoin. With competition, Bitcoin and other cryptocurrencies start to become valued.
In 2013, Bitcoin reached $1,000, and this was seen by investors and others in the finance industry as a revolutionary step forward for digital currency. However, quickly after reaching the $1,000 benchmark, Bitcoin plummeted in value and remained at $300 for many years. It was only in 2015 that Bitcoin was valued at more than $1,000 again.
In 2014 and 2015, cryptocurrency suffered a setback in popularity due to some security issues, scams, and thefts. Bitcoin was left very weak and was seen as an attractive target for criminals. A lot of Bitcoins were stolen and still haven't been located.
However, in 2016, things started to look up, and Bitcoin's biggest competitor, Ethereum, showed up to play, adding a sense of revitalisation to the popularity and reputation of cryptocurrency. Also, ICOs started to become more commonplace.
From 2017 to the present day, though volatile at times, Bitcoin and all other cryptocurrencies have gradually risen in value and reach heights that no one ever could've predicted in their wildest dreams. Since the e-commerce industry has ballooned recently, the talk of using a digital or virtual currency that has no boundaries to purchase things more easily online has made cryptocurrency even more worthy of investment.
Experts have observed that while the online shopping industry has adapted to the growing needs of its customers, offline payment options have remained relatively uninspired and stationary; cue in crypto!
Before concluding this section, it's safe to say that cryptocurrency will continue to rise as we head further into the 21st century and perhaps one day replace traditional currency. Who knows, the sky is the limit!
The Best Steps to Take to Invest in Cryptocurrency
If you ask any successful businessman or person with a wise retirement plan, they will most likely tell you that they were smart with their money and chose to invest. Investments allow individuals to see their hard-earned money grow more rapidly as time goes on. There are myriad different investments that a person can take part in; however, we shall focus on investing in cryptocurrency.
Is it possible for normal people such as you and me to invest in something as volatile yet profitable as cryptocurrency? The answer is a resounding YES! All you need is a little guidance in the right direction and the adherence of a few steps to get yourself investing in cryptocurrencies such as Bitcoin and Ether today!
The following are some steps on how to invest in cryptocurrency and get started:
- Decide the Amount You Want to Invest: if you've had experience playing around on the stock market or investing in other ventures, you probably know that you should decide upon a specific amount you wish to allocate to cryptocurrency investments. It is highly recommended to allocate a small account of your investment portfolio in cryptocurrency since it is volatile and doesn't offer dividends and interest like other stocks and resources. However, your decision of setting aside a specific amount of money for cryptocurrency investments depends solely on you.
- Pick a Cryptocurrency Platform: after you've run the numbers and decide how much of your portfolio you wish to set aside for crypto investments, the next step is selecting a platform that trades cryptocurrency. What is that? A cryptocurrency platform acts as a "wallet" for some and is essentially an app used to hold your currency. Coinbase and Wealthsimple have frequently used platforms that help you use real money/currency to buy cryptocurrencies such as Ethereum and Bitcoin. Other types of wallets include tangible things that look like USB sticks; however, having your cryptocurrencies on an exchange app is the most common.
- Choose Your Cryptocurrency of Choice: after your account or "wallet" has been set up, and you've transferred the desired amount from your portfolio onto the exchange app, the next thing you need to do is select the cryptocurrencies that you would like to invest in. There are thousands of cryptocurrency currently in circulation, making selecting a few to invest in quite difficult. Throughout the years, Bitcoin and Ether have proven to be the most reliable cryptocurrencies to invest in. However, we recommend that you do extensive research before investing in a new cryptocurrency since many new ones that were created in the past decade have disappeared over the years and lead investors to a profit of zero!
- Keep Your Cryptocurrency Safe: whether you choose to use your cryptocurrency gains for future investments or to make purchases at participating retailers, you must do your utmost to keep your cryptocurrencies secure. Take a look to ensure that all the movements of your cryptocurrency are secured and encrypted. Some use VPNs to guarantee that there will be no theft or scams when transferring their cryptocurrency.
- Sit Back and Enjoy the Show: since cryptocurrency is extremely volatile and unpredictable after you've invested some cash in a virtual platform, the next thing you can do is sit back and see what happens to your Bitcoin! Investors must remember that though cryptocurrencies have been going up rapidly, they can quickly plummet. If you haven't invested much and are unattached to the money you've allotted, as you should be, the experience can be quite thrilling to watch.
The previously mentioned tips, along with extensive reading and research on the topic, should prepare you for your first investments in cryptocurrencies. However, do not doubt to consult the expertise of a professional cryptocurrency investor that offers informative classes on Superprof!
Tips on How to Successfully Invest in Cryptocurrency
When investing in cryptocurrency for the first time, you need all the help and advice you can get. Therefore, to offer practical assistance to amateur crypto investors, the following are three tips that help individuals triumphantly invest in cryptocurrency:
- Have a Diverse Portfolio: as is the case with most investments, the strategy of putting all your eggs, or cash, in one basket is flawed. A diverse cryptocurrency portfolio is more healthy and contributes to more equitable wealth. By doing effective research, you'll see that investing across different coins will draw in more profits.
- Use Another Email: since cryptocurrencies are virtual, they might threaten online theft and scams. Therefore, to keep things safe and secure at all times, it might be a good idea to create a mobile wallet and accounts on trading platforms with an alternative email that isn't your personal one. Creating a unique email account with two-factor authentication password security ensures security and makes you feel more comfortable investing.
- Hope for the Best, Plan for the Worst: when investing in cryptocurrency, you cannot ignore the fact that it is volatile and unpredictable; most platforms warn investors before putting their money in! So, it is essential to enter the cryptocurrency game with an open mind and realistic expectations that you can easily lose it all, although you could earn a lot of cash.
By heeding the previously mentioned tips whilst investing in cryptocurrency, you'll be more prepared to make a profit.
In conclusion, like all investments, cryptocurrency is risky, but the chances of making a little extra cash should implore you to consider how it all works.