Cryptocurrencies, such as Bitcoin and Ethereum, are arguably some of the hottest and most lucrative investment products in the world today.
These incontrovertible and transferrable cryptographic tokens have a potential of becoming a hard and non-government regulated currency for the entire globe.
Their proponents predict a future whereby Bitcoin and other prominent cryptocurrencies will serve as a substitute for fiat currency like Dollar and Euro and establish the first free global currency.
If you want to start being an adopter today, it’s never too late. Here are insights to help you wisely invest in cryptocurrencies.
1. Investing in cryptocurrency is similar to investing in commodities
There are some similarities between investing in cryptocurrencies and investing in commodities. The truth of the matter is that commodities have two sides.
Other than being assets that can be utilized in the real world, commodities serve as investment products that can be invested in via open market exchanges.
Similarly, cryptocurrencies have insurance and financial applications and can serve as investment products. Therefore, when choosing a certain digital currency to invest in,
it is imperative to evaluate the usage and added value which the cryptocurrency brings to the real world.
2. Choose cryptocurrencies that have a rapidly growing usage
Currently, the market cap for all cryptocurrencies pooled together is over $60 billion. That market cap includes all existing cryptocurrencies:
Bitcoin, Ripple, Ethereum, Litecoin, and hundreds of minor and unpopular ones. The volume of real word transactions tends to increase as the market cap grows.
For instance, Tesla has a market cap of $50B, Coca-Cola $180B, and Boeing Airline $100B. At a market cap of 60 billion, cryptocurrencies present a profitable investment opportunity.
3. Ability to solve a problem
Purchasing cryptocurrencies with the hope that they will appreciate and bring an investment return is not a wise move. As an investor,
you should focus on finding and investing in digital currencies that solve a problem. The potential value of the cryptocurrency increases with the size of the problem it can solve.
4. Build your investment portfolio by incorporating a restricted number of cryptocurrencies
Just like any other investment, you should consider establishing your investment portfolio and working on it aggressively.
You should research thoroughly before investing your hard-earned money in any cryptocurrency. Additionally, you should also keep your emotions in check when making crucial investment decisions.
If you intend to establish a strong cryptocurrency investment portfolio, you will need to perform a proper analysis. Buy cryptocurrencies that can offer a reliable solution to a real-world problem.
Only seize the “hottest” coin if you are looking for short-term gains. Most importantly,
get updated with the recent news and trends to plan your next move.