These are the 4 criteria you must check before investing in a cryptocurrency.
For an investor to invest his money in a cryptocurrency it is imperative for him to know about the technology behind it and how does it work. It is not like any other investment where you buy or sell based on the hype you hear or read, Cryptocurrency is here to change your life and make it easier for you.
It’s important to have a sound knowledge of what you are getting into, because if you don’t know what is the purpose behind creating a particular cryptocurrency then there is no point of investing your money in that crypto.
One has to understand that cryptocurrency is not only a very risky investment but also requires time, patience and dedication in order to earn profits by holding it or trading it.
Here are some of the important things which one should keep in mind before investing in a crypto
We are living in a world where there are more than 1500 cryptocurrencies and still counting. In the last one year, cryptocurrencies like Bitcoin and Ethereum have shot up in value!
All these currencies have something unique to offer to its users. Hence, it is important to know everything about the cryptocurrency you want to invest in.
Like any other investment opportunity, you must know everything about the cryptocurrency you want to invest in. Cryptocurrencies are here to stay and they will only grow bigger with every passing year.
Investing in a cryptocurrency is not like investing in a company or stock market. You must do your homework before investing your hard earned money in it.
Here are 4 things you must check before investing in a cryptocurrency:
Most people think cryptocurrency is the next big thing, and some are even investing in it. But before you invest your money, you should check if it meets these 4 criteria:
No guarantee of success
Cryptocurrency is in a market bubble. This means that most people trading it expect its value to go up. The price of each unit rises as demand increases, which makes early buyers richer. But this can’t last forever; eventually, some people will want to cash out and buy things with their newly acquired wealth. If enough of them do this at once, the value of each unit drops dramatically and everyone who bought later loses money.
No easy way to assess value
Most currencies are worth something because they can be used to buy things directly (usually other currencies). Bitcoin is notoriously volatile. Its value fluctuates between hundreds of dollars within a single day! This makes it very hard to estimate its future price.
No central bank or government
The US Federal Reserve plays a key role in stabilizing the US dollar by buying or selling dollars to control inflation or recession. In contrast, no one controls Bitcoin’s supply or price! It’s completely unregulated by any central authority – like an online game where you can create as much imaginary money as you want!
WHEN it comes to securing investment for a new cryptocurrency, there are four major factors you must keep in mind, writes Acorn Collective founder Moritz Kurtz.
The cryptocurrency market has seen massive growth in 2017, with Bitcoin’s price rising over 1,000 percent and currently sitting at $13,600 (at the time of writing) while other cryptocurrencies have also seen huge gains.
While the industry is growing and gaining more public popularity, there are many things to consider before investing in a cryptocurrency.
Many people entering the market simply don’t know what to look for and usually just jump on the bandwagon of whatever coin is being recommended by popular figures within the industry.
However, not all of these cryptocurrencies are worth your money. There are many factors you should take into consideration before deciding to invest in any coin or token.
There are a lot of cryptocurrencies to choose from, and it is difficult to know which ones you should invest in. Therefore, we have put together a checklist that you can use when you do your cryptocurrency analysis.
When doing cryptocurrency analysis, keep these 4 things in mind:
Team : Who is behind the cryptocurrency? Does the team have experience in the crypto-sphere? Is the team active on social media and does it communicate regularly?
Vision : Does the cryptocurrency have a vision for what problem it will solve? Is this vision unique and valuable? Are there other projects trying to solve the same problem? If yes, how does this project stand out from the crowd?
Risk : What is the risk associated with investing in this cryptocurrency? What are the risks in terms of regulation or technological development? Is there a risk of losing money due to theft or hacks? Can you trust exchanges to store your currency safely?
Timing : When is the right time to buy into a project, before their token sale or after they have already listed their tokens on an exchange? If you buy in before their token sale, what are the risks involved and when will you see results (if any) from your investment.
In recent years, the world of cryptocurrency has exploded. Bitcoin, the first cryptocurrency to be created and still the most important one in terms of market capitalization, has seen its value rise from around $800 at the beginning of 2017 to above $18.5k at the end of it.
The second biggest cryptocurrency, ethereum, has seen similar growth, rising from roughly $8 at the start of 2017 to above $760 by the end of it – a growth rate of over 9500 percent. In fact, all cryptocurrencies with a market cap over $1 billion have seen their prices increase in 2017. This is all great news for investors and speculators, but what about those who want to use cryptocurrencies to make payments?
The major issue with payment cryptocurrencies is that they are still very volatile. Even though bitcoin’s price has stabilized somewhat since late 2017, it’s still significantly more volatile than major currencies like the US dollar and euro. This makes cryptocurrencies impractical as a means of payment today.
However, there are some things that you can do to mitigate this volatility risk if you’re going to use a cryptocurrency for payments. The first thing is to ensure that you don’t trade your cryptocurrency for fiat currency (government-issued currency) until you have to
The cryptocurrency market may be risky in the short term, but it is only going to get bigger. And so we need to understand it and find the right way to invest in it.
To do that, we need to take a step back and look at this market from the perspective of long-term value creation. At its core, cryptocurrencies are not just a fancy new asset class or speculative frenzy; they promise to become an entirely new financial system based on blockchain technology. This is why many experts have compared the cryptocurrency market with the early days of the internet. The internet revolutionized how we communicate, interact and do business. Cryptocurrencies are fast becoming the infrastructure on which a new economy will be built.
We are still at an early stage of that revolution, but there are already many strong teams building compelling products and services for this new ecosystem – for example:
SALT lending platform enables you to leverage your blockchain assets to secure cash loans. We make it easy to get money without having to sell your favorite investment. Process typically takes under 24 hours and you are able to maintain ownership of your assets during the loan process.*
NEX combines the NEO blockchain with an off-chain matching engine to enable much faster and more complex trades than existing decentralized exchanges.*