Cryptocurrency is a new asset class. It was first created in 2008 and has since exploded in popularity. Currently, there are more than 1,500 cryptocurrencies in existence, with the total market cap of all cryptocurrencies sitting at $70 billion. This means if you invested $1,000 in cryptocurrency just seven years ago, your investment would now be worth $75 million. At its peak, Bitcoin was trading for as much as $20,000 per coin in December 2013.
It’s tempting to speculate about huge returns for a small investment. But before you do that, you need to know how to evaluate cryptocurrency investments.
The first step is to make sure you understand what cryptocurrency is and what it isn’t. Cryptocurrency isn’t just digital cash—it encompasses a wide range of assets that can be created without the need for a central bank or third-party organization. In other words, it’s not just bitcoin; it’s not even only digital assets—including the popular Litecoin and Ethereum.
If you’ve never invested in cryptocurrency before, this guide will help you realize your potential gains by showing you how to evaluate five factors when choosing an opportunity: risk level, return on investment (ROI), liquidity, sustainability and security of your cryptocurrency investment.
Cryptocurrencies are a relatively new and complicated type of investment vehicle. Before investing in cryptocurrency, it is important to be informed about the risks and rewards that may accompany such an investment.
Here are five factors that investors should consider when evaluating cryptocurrency investment opportunities:
1) Ticker Symbol
2) Exchange Name
3) Market Capitalization
4) Purchasing Power Parity (PPP)
5) Transparency of Operations
Cryptocurrency is a new kind of asset that offers investors a unique opportunity. And while it’s true that there are risks to investing in cryptocurrency, these risks are no worse than what you would face if you invested in any other asset class. If anything, they are less than the risks you would face if you kept your money in cash or used it to buy U.S. government bonds.
Cryptocurrency can be a very good long-term investment, provided that you do your homework and think carefully before investing. Here are some considerations to keep in mind as you evaluate this new asset class:
There is no such thing as a perfect cryptocurrency. There are many currencies, and most of them are not good investments. Because there is no such thing as the best cryptocurrency, you should do your own research before investing in any kind of cryptocurrency.
The only way to find out whether any particular cryptocurrency is good for you is by doing your own research.
Before investing in cryptocoin names you should be aware of these things:
1) There is no free lunch. As with any investment, you must take into consideration the risk associated with investing in cryptocurrencies. If this isn’t a concern for you, then it’s likely a great time to invest in crypto.
2) You must have a clear plan before investing in crypto. It’s very important that you have an idea of what you want to accomplish with your money before investing it in cryptocurrencies. If you don’t know what this is or where it will lead, then it’s difficult to make your decision based on the information available.
3) The market is highly volatile and difficult to predict. This means that although there are some trends apparent among different cryptocurrencies, they can be wrong at every point in time and that the price can change dramatically at any given moment without warning and without reason (such as when an
Cryptocurrency investors are often warned that they might lose everything. Unfortunately, the warnings aren’t entirely justified.
Many people have lost a lot of money in recent years, but that seems to be because they were trying to invest at the peak of a bubble. When prices are rising fast and everyone is talking about them, any investment that fails to go up with it will look bad. When prices rise very fast, you can never be sure whether they are going up because there is something real behind them or because everyone is jumping on a bandwagon.
It’s easier to see what is behind a price if you don’t know what it should be. In January 2014, for example, bitcoin was trading for about $200; by June it had gone up to $1,400. That’s an almost unbelievable increase in 12 months, and you would need a strong case that bitcoin really was a better form of money than everything else before you would expect it to go up so much.
There’s no point worrying about whether this or that particular cryptocurrency will go up: you could easily have bought whatever it was before and made money from it. What matters is whether the technology behind all cryptocurrencies makes sense as an invention that could work as well as bitcoin does now.
Cryptocurrency is a new kind of technology, but it is best thought of as a financial instrument. Like all other financial instruments, there are different kinds of cryptocurrencies and they have different characteristics. Your goal should be to find one that has characteristics you want and that you believe will increase in value over time.
You should also understand the various ways you can use a cryptocurrency, so you know which ones are better suited for each purpose.
Cryptocurrency is a new word, but it is not new. Bitcoin was the first cryptocurrency, invented in 2009 by someone (or someones) using the name Satoshi Nakamoto. This article uses “cryptocurrency” to refer to digital money such as bitcoin, ethereum, and litecoin that use cryptography for security.
The original purpose of cryptocurrency was as a way for people to make transactions without using the usual banking system. Cryptography allows anyone to send money to anyone else without having to identify yourself or go through a third party like a bank.
Cryptocurrency has several advantages over cash or bank transfers: You can send money between any two people at almost no cost; if you lose your wallet, it’s gone forever; and there are no fees or exchange rates to worry about when sending or receiving money.
Other advantages are that every transaction is public so you know who is making what and how much they have; you don’t need a third party verifying the transaction like a bank; and you can be sure that nobody will lose the currency in the transaction like if a bank goes out of business.