Unless you are living in a cave, cut off from the technological world of the 21st century in which the rest of us live in, you have probably heard about the recent boom in cryptocurrencies and the success stories associated to it. Many young entrepreneurs and traders have made a small fortune by investing in this new economic sector. However, unlike what one could think at first glance, cryptocurrencies are not magic internet money and investing in them misguidedly can ruin you in less time than it takes to say “Bitcoin”.
Investing in outstanding cryptocurrencies such as Bitcoins and Ethereum isn’t a subject to be taken lightly. It is extremely risky, extremely speculative and still is in its very early stage today. That being said, the new speculative market of cryptocurrencies has the significant potential to make smart investors, following the trends of the market, and with a little help from lady luck, rich. If we take the example of Bitcoin, the price of a unit of the virtual currency was valued at $ 999 on January 1, 2017. Its price reached $ 18,956 on December 11 of the same year, soaring up 1797.49%. The current rate of bitcoin is $ 6100.4 per unit, 510.65% more valuable than it was at the beginning of 2017.
Today, Bitcoin and a handful of other cryptocurrencies have invested several key economic sectors where consumers and suppliers of products and services trade through this new medium of economic exchange. Among the areas of economic activity where cryptocurrencies are progressively gaining the most recognition are:
- International Financial Transfers: The international transfer of funds, especially when it comes to large sums, not only takes a long time but also is very expensive because of the different taxes imposed by the various governments involved in the movement of assets and transfer fees applied by conventional financial institutions. The use of cryptocurrencies for international funds transfers circumvents any third party and makes the cost of transferring funds almost nil.
- Enabling Online Gambling in Restrictive Jurisdictions: Some countries, including the US, do not strictly prohibit online gambling but prevent conventional financial institutions from processing any money transfer between players and online casino operators in their territory. The pseudonymic character of cryptocurrencies, which does not identify recipients or funders on their peer-to-peer network, is an alternative of choice for tens of millions of online casino players, allowing them to bypass restrictions imposed by the jurisdiction in force in their country. Many online casinos have adopted Bitcoin to facilitate US players’ access to their platforms, and many specialised sites, such as bestblackjackcasinosonline.com, have a comprehensive list of gambling websites that enable players to use this convenient method of payment.
Trading Cryptocurrencies – How to Make Money Trading Bitcoins, Ethereum and Other Virtual Currencies
Given the speculative nature of the cryptocurrency market practices we are about to discuss here, please be informed that we do not have the pretention do hold the magic formula that will get you rich in 6 months trading virtual money. In fact, we strongly advise any of our readers to steer away from anyone or any organisation who have such claims. What we will discuss here, however, is what are the current trends in cryptocurrency trading that have been proved successful and what are the good habits to adopt to maximise your chances to make a profit.
CRYPTOCURRENCIES MONEY MAKING CONCEPTS
- HODL: Originally coming from a misspelled post on the Bitcoin talk forum the term HODL, short for holding, is today part of the growing cryptocurrency communities’ lingo. The concept of “HODLING” cryptocurrencies is straightforward as it consists of buying cryptocurrencies that are widely spread amongst users (Bitcoins, Ethereum, Litecoins, etc.) and hold on to them for a given period until their value reaches a fair market share. Holding is one of the safest ways to get started in cryptocurrency trading and to get acquainted with how the market fluctuates. When you HODL you buy cheap, hold and sell high.
- HODLING FOR DIVIDENDS: Some cryptocurrencies pay dividends to their unit acquirers to hold on their assets. This allows these virtual currencies to guarantee their users a basic value tier that gradually increases as the number of currency purchases increases. Amongst these currencies are NEO, COSS, KuCoin and CEFS.
- TRADING: Trading or Day Trading is a much more intense activity. When trading, you catch highs and lows in prices on crypto-exchanges and aim for the highest profit possible as the market fluctuates in real-time. The risks of this method are higher, but so are the potential rewards.
- INVESTING: Since the explosion of the Bitcoin phenomenon, there are now more than a thousand different cryptocurrencies, some to avoid, other having the potential to know the same escalation as the famous virtual coin. Investing in a cryptocurrency at its initial stage is a long-term bet and can prove very profitable. To invest in the cryptocurrency of tomorrow, no secret, you need to do your market research, follow the news and keep an eye on the fluctuations of the crypto-market to sniff out the next golden hen.
HEALTHY HABITS TO STAY SAFE FROM BANKRUPTCY
- ONLY INVEST WHAT YOU CAN AFFORD TO LOSE: This is the most important rule of investment. Never invest if you cannot afford to lose everything, it is the golden rule to observe whatever the sector in which you want to invest. Unless you are in possession of a Christal ball that allows you to read the future, if that were the case you probably wouldn’t be reading these lines, there is no 100% safe investment in this world.
- ALWAYS KEEP AN EYE ON THE BITCOIN RATE: If you decide to embark on the cryptocurrency trading, you will undoubtedly be lead to other virtual currencies or altcoins. The rates of each of these currencies fluctuate in relation to each other and especially by following the evolution of the bitcoin. When the value of the latter falls, those of the altcoins tend to increase and conversely.
These are the basic principles of cryptocurrency trading. This young and dynamic market and the panel of opportunities it offers are still in their infancy. The best advice we can give you to succeed in trading these new mediums of exchange is to read as much information as you can, carry your own study and always cross-reference sources of information. One thing is for sure, cryptocurrencies are not about to disappear and the financial impact of blockchain integration to finance will, one way or the other, shape the future of our economy.