Rise Of Cryptocurrency
Thanks to the techy era, using crypto is becoming more popular than ever before. With so many new titles along the lines of Bitcoin and Etherum, prices are surging and more and more people than ever before are seeing this in their news feeds and wondering what exactly the draw is. Some are skeptical, others are concerned that the technology may fail. Slowly, people are flocking to the market and jumping on board to become a part of it. At this time, the market cap is at 30.9 billion in USD. Just a mere 4 months ago this number was 20 billion. What do the next four months project?
Current Composition Of Cryptocurrency
Bitcoins, Altcoins and more started in 2011. This is when the forks of what is called Bitcoins began to show up in the marketplace. The clones or forks served a niche that was said to be better. From this point forward, new crypto has emerged and eroded away at the Bitcoin market dominance. Altcoins are gaining on the market at an alarming pace. Ten times over the growth has been observed in just a few short weeks.
Cryptocurrency, Stocks, and Fiat
Currencies as we know them, are called “fiat” by the cryptocurrency community. While having the currency they share many more similarities with stocks than with currency. When purchasing cryptocurrency. you're purchasing a part of tech stock and you're a piece of the blockchain or network.
The most common area to buy, sell, or trade cryptocurrency is on the exchange. An exchange is an area that you can buy and sell your cryptocurrency using fiat. There are many ways to judge how reliable and the quality of such exchanges. There is liquidity, there is spread, the fees, the purchase and the means of withdrawal and the limits. It also shows the trading volume, insurance, security, how user-friendly it is and more. Of all of these, “Coinbase” is the best exchange per users. It walks users through a beginner interface and offers 100 percent crypto insurance.
Once it's been set up an intermediary bank account will verify your details with Coinbase. You'll have five more easy steps to complete your Bitcoin purchase.
- Access the Buy/Sell Tab
- Choose your payment method from the drop-down menu.
- Enter your desired amount
- Click on the Buy instantly tab
- You'll now see your credited Bitcoins on the dashboard
After you've become acquainted with purchasing crypto, and begun to desire more, you simply do an instant transfer from your Coinbase to your GDAX and this is free and you can then start trading. Coinbase is the ideal location to go to buy and store all of your cryptocurrency and your GDAX is your trading platform. You can transfer back and forth between the two and it's all free and instant.
As you become more familiar with the cryptocurrencies, you may wish to have other options for your investments. Bittrex and Pollo are two other exchanges that give you a wide selection.
When you're signing up for these the first time, you'll have to verify your account with the documents that they state so that you won't be stuck in the process if a good trading time comes up. The sooner you verify these, the better as many of these verification processes can take several days. You'll find that your limits increase the more you trade.
Additional points are that if you're not using USD, you will have other options. You don't want to run into withdrawal issues like Bitfinex did in recent transactions.
There are built in wallets for the exchanges. These wallets keep the cryptocurrency that is purchased. For those who are concerned regarding the Mt. Gox hack, who may be concerned regarding keeping their money in an exchange, they can also use a paper wallet service for their exchange such as myertherwallet.com or they can spend .99 USD on hardware wallets such as KeepKey. Both of them work well for keeping the risk to a minimum and keeping the currency safe.
In order to move the crypto from the exchanges to the hardware wallet, they will follow three basic steps. They can use these steps in both Coinbase and KeepKey.
- Using your KeepKey USB cable you'll open your KeepKey Client. In Google Chrome you'll find this under “Apps”. You'll find the wallet address in your KeepKey Client UI. You can then access the Coinbase Send/Request tab to input your KeepKey wallet address. You'll then confirm the amount and click “send funds” to make your exchange.
- Note, you should first send a small amount to ensure that it's working properly. If an error occurs and the amount is lost you won't be out as much. Small network fees may or may not apply.
- With a hardware wallet, you'll love how easy it is to keep track of your crypto holdings. The hardware wallet has an easy to use user interface that will help you to keep track of your coins. This is especially nice to have when you're participating in ICOs or Initial Coin Offerings when you do this in the future.
Cryptocurrency As A Part Of Your Personal Investment Portfolio
This is very subjective. Crypto can realize more than one rags to riches tale. However, it's so volatile that it's completely unpredictable. Thus, as a precaution, it's recommended that the monies that are put into crypto should be money that you wouldn't struggle to replace should you lose it. All too often it's widely underestimated in regards to our emotional capacity when it comes to money and loss. Of course, part of the risk is that you may make it big. Since the pendulum can swing so wildly in both directions it can be an emotional roller coaster ride.
- If you're seeking a conservative portfolio, it's suggested you go as follows:
- Under 30 invest 30 percent of Crypto and 50 percent of traditional investments.
- 30 to 40 invest 20 percent Crypto and 60 percent traditional
- over 40 invest 10 percent Crypto and 70 percent traditional
- While this isn't meant to sound age discriminatory, it takes into account that as one age, they have different financial responsibilities including family and a mortgage.
- Using the designated Crypto share information in their portfolio, it's easier to diversify the coins based on the risk factors.
Show Me The Money! Crypto Investing
How should a person pick the right winner and avoid the loser?
Crypto is a huge market at this time and anything can happen over the course of time. Also, it's important to not ignore the fact that it could do like the dot-com did in 2000 and mushroom. Yet, you still have to sit back and ask yourself some questions before you invest in a bitcoin.
Are my investments safe with the dev team? One of the first rules of investment is the preservation of your capital. Can you truly trust your team with your hard earned money? Are you leaving your money with others who may have previously been involved in scams or theft? If you're seeing any signs of such activity, you'll want to back off and find another company. The price of the coins may rise and fall, however, it's not worth putting a large amount of capital at risk.
Is there a long-term plan for the investment? If the yellow paper isn't making sense, read the white paper, does it make sense yet? What are they seeking to achieve as a team? Is your money safe? Do they have a goal? What is their timeline? Is there a milestone?
Do the coins that you're interested in have a marketed plan or a backup? There are many ICOs on the market today and they have a nice website but they're poorly managed. Keep an eye out for scams. You don't want to be taken advantage of. You don't want to lose your hard-earned money.
How long should you continue investing in this program? Do you have an exit strategy? There are going to be coins that you want to liquidate or flip, how do you plan to do this? Find a timeframe that you can work with. Focus on your exit prices and strategies. Reduce the emotional effect that the trades have on you and stick to your plan.
Is there a real-world case or scenario? Many coins increase in value just due to the supply and demand factor. While this may not be a sustainable trend, it will give them some value. There may be many real-world case scenarios that change often. keep an eye out for any coins that look to be a get rich quick scam. They probably are.
If you're more comfortable with predictable trades, mining may be the route to go. Mining sets up a rig and consists of GPUs or CPUs in investments of the power. Mining is the only cryptocurrency that will follow through with the proof of work protocols. It will take on some of the effort and setup and it will start things rolling. However, as long as the money is coming in it's great. When the money stops coming in, it stalls.
This is the Proof Of Stake in mining. This is like having dividends on your stock. There are reward rates and there is a different method of taking it out. These vary greatly in Proof of Stake coins, however, in general, it will take far less effort when it's compared to mining.
Here you'll hand in a variety of exchanges. You might be buying from one exchange and turning around and selling on another. This is how you make arbitrage gains. Take note and factor in the fees and remember that prices can change. keep it in USD so that you understand it all.
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