Best Cryptocurrencies to Invest In. Bitcoin
Best Cryptocurrencies to Invest In. Bitcoin
Cryptocurrencies appeared in 2009 and during this time gained popularity among investors. The market capitalization has skyrocketed from $18 billion to $613 billion from January 2017 to January 2018. Thanks to the profits that the cryptocurrencies brought to investors in 2017, more people were interested in investing in them.
Nevertheless, most of the new investors are faced with the problem of choosing the best currency for investing in 2018. This is an important aspect because there are over a thousand cryptocurrencies in the market, and the need to choose one for investment can be confusing. The choice between investing in old and new cryptocurrencies can also complicate the lives of most newcomers. To date, the most popular currency is Bitcoin. Let us consider in more detail how to invest in this currency.
Bitcoin is the world's first digital cryptocurrency, and it remains the most popular. Today, thousands of merchants worldwide accept this currency as payment for their goods or services. Bitcoin can also be exchanged for traditional money using specialized exchange or trading platforms.
The key feature of Bitcoin is its limited amount, which protects this currency from inflation. The emission of Bitcoins is decentralized. It means that the applicants from all over the world release the new bitcoins using the computing power of their computers. There is no single center for producing this cryptocurrency. Also, there is no fee for the Bitcoin transfer.
The unconditional advantage of this cryptocurrency is its anonymity. All that an investor can see is the wallet address. Similarly, the investor does not need to provide any information about himself.
The total number of bitcoins in the world is limited to 21 million, while their amount doubles about every four years. Therefore, over time, the new coins appear slower and more resource-intensive. As a result, the Bitcoin cost also increases. With regard to investing — this means that Bitcoin will demonstrate a long-term price increase and in time will be able to bring a good profit.
Investment in Bitcoin classification
There are two main and most common strategies to invest in Bitcoin.
Positional strategy. The investor buys a certain number of Bitcoins for real money and is waiting for the cryptocurrency rate increase. Sooner or later the cost of Bitcoin will increase, and the purchased cryptocurrency will be sold several times more expensive. It is important not to sell it before the time at the peak of price reductions.
Trading on the stock exchange. The basic principles of trade in cryptocurrency stock exchange are similar to the Forex market. You earn money on the rates difference.
Goals and objectives of investing in bitcoin
Almost unlimited rate growth potential of Bitcoin towards even the world's currencies — the euro and the dollar — allows you to make the cryptocurrency a reliable object of investment. The main goal when investing in Bitcoin is to create a thoughtful long-term strategy. The investor should avoid the temptation to get rid of the cryptocurrency when the Bitcoin rate shows an unexpected decline. Remember that the principle of the cryptocurrency is a stable rate growth, and the security of Bitcoin is in no way inferior to euro and dollar. At the same time, the Bitcoin rate is much less subject to fluctuations that occur with world currencies because of high-profile political and economic events.
Ways to invest in Bitcoin
Interest in investing in Bitcoin increases when the cryptocurrency rate is increasing, as many investors are investing in further rate growth. To get a good profit, it's worth waiting until the exchange rate will fall, and buy it.
You can earn on Bitcoin in several ways. In addition to the traditional trade, you can also invest in equipment to mine the cryptocurrency. Each Bitcoin is a digital code. To process it you need a special hardware. And the hardware power is growing in a geometric progression. However, at the same time, it is much more difficult to produce the new bitcoins. Having invested money in the equipment, you can start earning your own Bitcoins in order to subsequently sell them.
There are also services that offer Bitcoins for certain actions, but we would not consider such a method a full-fledged investment.
Risks of investing in Bitcoin
The risks, first of all, relate to the Bitcoin-specific. Despite the fact that today this cryptocurrency is decentralized, in the future it can be easily centralized. This is because the stock exchanges actively influence the Bitcoin rate, where they sell and buy this cryptocurrency. In addition, the Bitcoin mining is gradually concentrated in the fairly narrow circle of people. They own the latest technology, which makes it possible to produce new bitcoins.
More and more middle-class people prefer not to spend a lot of money on expensive Bitcoin mining hardware. They prefer to get cheaper cryptocurrencies and exchange them into Bitcoins. This trend created the Bitcoin mining centers which threaten the cryptocurrency decentralization.
Open cryptocurrency operations is another risk. Therefore, many people can see how much Bitcoins have been bought, and in the case of purchasing a large number of Bitcoins, some people manipulate the Bitcoin rate.
Finally, the Bitcoin transactions anonymity creates certain risks related, first of all, to the risk of money laundering and the lack of state control.
In many countries, there is no good legislation controlling the Bitcoin and cryptocurrencies in general. It can be really challenging to work with virtual money as they can be out of the law.
How to buy Bitcoin
In order to get some Bitcoins, you need to create a virtual wallet, which will keep the cryptocurrency code. There are wallets for mobile devices (Copay, bread wallet, Mycelium), for desktop computers (Bitcoin Core, Armory, Electrum), hardware (Trezor, Ledger, Digital Bitbox) and online wallets (BitGo, Green Address, Coinbase). If you are going to regularly perform operations with Bitcoins, prefer mobile and desktop wallets. If you invest in large amounts for a long time, use the reliable hardware and computer wallets. The wallet needs to be installed and activated.
Despite the rumors of Bitcoin collapse, we believe that it is a great coin to invest in for many years.