(ThyBlackMan.com) Many bitcoin investors in 2012 didn’t know the cryptocurrency would one day be valued at more than $20,000. Yet, that is exactly what happened on December 23rd, 2017, barely a decade after its launch.
A lot of cryptocurrencies have made headlines and vanished from news media in the last five years. Others, like bitcoin, remain dominant. For an aspiring cryptocurrency investor, therefore, the crypto world is full of uncertainties but there are also opportunities.
The uncertainties in the crypto world stem from the decentralized nature of the industry. No one regulates cryptocurrencies, which means investors could buy and sell any coins without any legal framework.
The law of demand and supply determines the prices of coins. However, for small cryptocurrencies whose daily volumes are just thousands of dollars, their prices are often influenced by huge volume investors.
Should you invest?
The cryptocurrency industry is huge and consists of several sectors where you could invest in. Some sectors, like cloud mining, are on the verge of extinction. Others, like ICOs, are just starting out. Learn more about choosing the right cryptocurrency at https://www.abitgreedy.com/what-cryptocurrency-to-invest-in/.
Investing in Crypto Mining
Bitcoin mining has made a lot of people millionaires in the past few years. Think of the people who own Bitmain, the large company that builds mining ASIC machines. The company is almost a monopoly and ships products worth millions of dollars yearly.
Mining pools make millions as well. In 2013, bitcoin miners could also make a couple of a thousand dollars with a GPU machines mining the cryptocurrency. In 2018, however, mining bitcoin and other altcoins are more expensive and less rewarding.
The cheapest mining machine is a normal CPU computer that can be used to mine cryptocurrencies that resist ASIC machines. Monero, for example, was developed for CPU and GPU mining alone. You can earn several hundred dollars a year with the right ASIC miners. Compared to 2013 though, mining is not very profitable in 2018.
Buying and Holding Cryptocurrencies
Known and HODLing by investors, buying coins like bitcoin and holding them to anticipate for profits is still profitable in 2018. Bitcoin is not likely to grow by 50% overnight anymore but the upcoming cryptocurrencies have high prospects.
While many of today’s crypto millionaires became rich holding bitcoin, the next generation of crypto millionaires will come from investing in altcoins. Cryptocurrencies like ethereum, ripple, DASH, Stellar and Vechain are all altcoins and steadily increase in value over the long-run.
Take an example of Vechain. In August 2017, the crypto was valued at less than $1. By February 2018, VEN coin was trading at $9. Vechain moved up by 2000% in just six months, meaning an investment of $100 could have turned into $2000 much faster than investing in any stocks.
A lot more cryptocurrencies have had the same high growth rates. But at the same time, there are cryptocurrencies that lost more than 70% of their value. Investing in altcoins asks for a great deal of research, building a crypto portfolio and staying up to date with news.
Day Trading Cryptocurrencies
Cryptocurrency day trading is one of the fastest growing industries. The largest crypto exchanges make more money than banks. They record 24-hour trading volumes of more than $1 billion. And with cryptocurrencies fluctuating by the minute, a lot of money is made and lost through day trading.
Day trading with bots is especially rife in 2018. With the right bot and commands, you don’t need to visit your account any time. The bot does all the trading for you. Day trading is not easy though. It takes a lot of effort to be an expert. However, it’s not impossible to impossible to make it day trading or swing trading cryptocurrencies.
What you need to Start Investing in Cryptocurrencies
Depending on which sector of the industry you want to invest in, there are tools and resources needed to succeed as an investor.
To start with, you need is a cryptocurrency wallet that supports bitcoin and several other altcoins. There are many types of wallets but if you want the most secure wallet, you have to pay for a hard wallet like Trezor or Ledger Nano S. Alternatively, you can settle for a desktop or mobile wallet and purchase a hard wallet later on.
You are also going to need a cryptocurrency exchange. There are several types of cryptocurrency exchanges but you will only need two. On one exchange, you will want to buy bitcoin or ethereum. The two cryptocurrencies are used as trading pairs for the less popular cryptocurrencies.
The second type of exchange supports bitcoin’s alternatives that are rarely paired with fiat money. You can register with and use an online broker like cex.io, just open an account, fund it, fill in your investment price and trade. You could buy bitcoin, hold it, wait hopefully for the price to rise and sell it at a higher price to make profits.
You could also short sell, that is making a deal to borrow bitcoin from a brokerage firm, selling them immediately at the market price then wait and hope for the price of bitcoin to drop so you can buy back at a lower price to return to the brokerage firm thereby making your profits
Another trading option is to use contracts for difference (CFD), where you don’t actually buy cryptocurrencies but put your money on whether the value or price of the said cryptocurrency will increase or reduce. New investors are not advised to venture into CFDs as it requires a lot of expertise to do it right.
If you want to invest in crypto mining, you have the option to purchase mining equipment or engage in cloud mining. The latter is less profitable and not advisable in 2018. However, buying mining equipment and creating a mining farm at home can still make you money.
With many altcoins requiring only GPU equipment, you don’t have to use a big budget to mine coins. A budget of $2000 will be enough to buy a profitable bitcoin mine like the Antminer S9 and two GPU miners for mining altcoins like Zcash and Litecoin.
There are lots of ways to make money from cryptocurrencies in 2018. However, a lot has changed in how people build wealth with bitcoin and altcoins. For example, you can’t rely on bitcoin faucets to earn bitcoins but you could still buy and hold cryptocurrencies. The key is to do lots of research to know which sector of cryptocurrencies will work for you and invest wisely.
Staff Writer; Phil Carter