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LESSON #3
INVEST. PART 3
Investing
in Crypto-currency
for Long-
Term Gain
Cryptocurrency
is still in its early stages
2009
Release of
Bitcoin
2016
Release of
Ethereum
10 YEARS
Is bare minimum to qualify investment as long-termed
Bitcoin is only just starting to gain needed minimum of a long-term investment if you had the foresight to buy it in 2010.
And if you did, you could have bought
it for $0.08 per coin. Today, Bitcoin
is trading at $40,000 per coin.
In hindsight, Bitcoin was a very good
long-term investment
Question
no one can
answer is:
Whether or not it will continue to be
a good long-term investment,
especially if bought at today’s prices?
Other coins have seen similar rises, although none to the extent of Bitcoins meteoric success. Cryptocurrency
remains a highly speculative market,
but there has been a general upward
trend to the market.
To date, a buy-and-hold approach
has proven successful. Of course,
in investments, past success is
no indication of future
Develop Your Own Strategy
Vigorous research — reading everything you can find —
is essential with cryptocurrency. For each topic — such
as investment strategy — you should seek out multiple sources of information. In other words, click on multiple links in your Google search. This way, you’ll read varying opinions. And when it comes to crypto, there’s a wide
range of opinions on every topic. Armed with this information, you’ll then be able to draw your
own conclusions
It helps to become familiar with commonly used
strategies, such as the dollar cost average, and the
golden cross. Starting with proven strategies
will help you learn the market while developing
your own strategy
It’s important to note that the definition of long-term varies. In trading, long-term is 18 months, whereas,
with a hold strategy, long-term is measured in decades
Choose Fundamental Assets
Many exchange platforms, including Midas.Investments, use Bitcoin as their base currency, meaning you buy in with Bitcoin, then use that currency to buy others. Other platforms work
the same way but use ETH as their base currency. All this means
is that you need to know which crypto to buy before you start trading on a chosen platform.
Next, you need to decide which assets you’re interested in buying. You could stick with the more popular coins or try to find
the next Bitcoin among the upstarts
Diversification Strategy
Even with a diversified portfolio, the value of many altcoins follows the rise and fall of Bitcoin. To balance out your portfolio and provide a bit of stability against Bitcoin’s volatility, you can add stablecoins, such as Tether,
to your portfolio.
Like the stock market, having a diversified crypto
portfolio will provide a buffer from losses by not investing
too heavily in a single currency. In technical terms,
this is called mitigating risk.
In addition to a variety of coin types, you can further diversify by investing in various industries or by geography, as well as time diversification, which involves slowly building your portfolio in small chunks over time
Should I Invest in Bitcoin?
Bitcoin is a good way to diversify a traditional investment portfolio. Cryptocurrency is still relatively new, and although Bitcoin has seen
a recent surge in value, these are still early days. Some analysts feel Bitcoin is destined for a value of one million dollars in the near future. Others feel it will be worthless in 10 years than it is now. The answer
to whether or not you should invest in Bitcoin for the long term really depends on which side of the argument you feel is correct
Choose Fundamental Assets
Altcoins, aside from stablecoins,
tend to be tied largely to the
price of Bitcoin. But, with the
crypto market being so young,
that could entirely change in the
mid to long term. With altcoins,
the value tends to be tied to the
project they are connected with.
The better the project, the more
valuable the coin. This is, in part,
what has helped ETH rise in value
— Ethereum has proven to be
a robust platform on which many
apps have been built, proving
that it has value beyond
the perceived worth of a coin
What Are the Risks?
There’s no doubt that Cryptocurrency is a risky investment. There’s a good chance that you will lose everything. Of course, there’s a chance that you will turn thousands into millions. There are three main risk factors facing crypto investors.
Volatility. The price of Bitcoin and altcoins fluctuates wildly, sometimes losing as much as a quarter of its value in a day, only to regain it the next. For those looking for a stable investment, this is not the place to look.
Speculative. The nature of cryptocurrency and what is pushing its rise in value is speculation. People think it will rise in value, and they are betting on that rise with current investments.
Some analysts feel we’re in a crypto bubble. If so, the bottom will fall out of the market when
it bursts, and prices will plummet. We saw the same thing happen with the dot-com bubble
in the early 2000s
GOT IT?
© 2017-2021
API
Investing in Cryptocurrency
for Long-Term Gain
Whether or not it will continue to be a good long-term investment,
especially if bought at today’s prices?
Other coins have seen similar rises, although none to the extent of Bitcoins meteoric success. Crypto-currency remains a highly speculative market, but there has been a general upward trend
Vigorous research — reading everything you can find — is essential with cryptocurrency. For each topic — such as investment strategy — you should seek out multiple sources of information. In other words, click on multiple links in your Google search. This way, you’ll read varying opinions. And when it comes to crypto, there’s
a wide range of opinions on every
topic. Armed with this information,
you’ll then be able to draw your
own conclusions
It helps to become familiar with commonly used strategies, such as
the dollar cost average, and the
golden cross. Starting with proven strategies will help you learn the market while developing your own strategy
It’s important to note that the definition of long-term varies. In trading, long-term is 18 months, whereas, with a hold strategy, long-term is measured in decades
It’s important to note that the definition of long-term varies. In trading, long-term is 18 months, whereas,
with a hold strategy, long-term is measured in decades
Many exchange platforms, including Midas.Investments, use Bitcoin as their base currency, meaning you buy in with Bitcoin, then use that currency to buy others. Other platforms work the same way but use ETH as their base currency. All this means is that you need to know which crypto to buy before you start trading on a chosen platform.
Next, you need to decide which assets you’re interested in buying. You could stick with the more popular coins
or try to find the next Bitcoin among
the upstarts
Like the stock market, having a diversified crypto portfolio will provide
a buffer from losses by not investing
too heavily in a single currency. In technical terms, this is called
mitigating risk.
In addition to a variety of coin types,
you can further diversify by investing
in various industries or by geography,
as well as time diversification, which involves slowly building your portfolio
in small chunks over time
Bitcoin is a good way to diversify a traditional investment portfolio. Cryptocurrency is still relatively new, and although Bitcoin has seen
a recent surge in value, these are still early days. Some analysts feel Bitcoin is destined for a value of one million dollars in the near future. Others feel it will be worthless in 10 years than it is now. The answer to whether or not you should invest in Bitcoin for the long term really depends on which side of the argument you are
There’s no doubt that Cryptocurrency
is a risky investment. There’s a good chance that you will lose everything.
Of course, there’s a chance that you will turn thousands into millions. There are three main risk factors facing crypto investors.
Volatility. The price of Bitcoin and altcoins fluctuates wildly, sometimes losing as much as a quarter of its value in a day, only to regain it the next.
For those looking for a stable investment, this is not the place to look.
Speculative. The nature of crypto-currency and what is pushing its rise in value is speculation. People think it will rise in value, and they are betting on that rise with current investments.
Some analysts feel we’re in a crypto bubble. If so, the bottom will fall out of the market when it bursts, and prices will plummet. We saw the same thing happen with the dot-com bubble
in the early 2000s