How to invest in cryptocurrencies? Myths in Vs. long term investment
how to invest in cryptocurrencies
Wondering how to invest in kryptowaluty?
Before you spend your hard-earned money, create your own investment strategy.
Think about it how much time you have to take care of your investment, how long you can freeze your capital, what a huge risk you want to take, what your stock investing skills and experience are market.
The article is part of free practice - Cryptocurrencies - how to get started and live? A course for everyone!
Why invest in cryptocurrencies?
Conversations, dreams and hypocrisy
Many people who invest in cryptocurrencies do not understand them, less technology stands behind them.
They just want to earn fast.
Most often they have a gambling line and are willing to risk a lot because they see the opportunity to get rich big.
They have no strategy and they act that way if they buy a lottery ticket.
they often listen to beatersino They promise them huge income without informing you about the risk of losing capital.
They shout that valuing Bitcoin will one day reach USD 1 million and make them rich.
The whole driven by dreams of easy achievement and a graph of historical quotes bitcoin, Ethereum or XRP, that made people in the past invested in them long-term, rich.
Some tittlers, trainers, youtuberzy encourage you to buy select projects (for which they often receive a salary).
They call their viewers long-term breeding, regardless of the current price and market situation.
They show that many years ago the price of bitcoin ranged from $ 10 to $ 2 and you had to keep bitcoin in your safe wallet, whatever it was, to arrive at times worth a few thousand per item.
Often, they offer their viewers pay for training and purchase products and services for which they themselves draw commission. It so happens that these youtubers have not yet earned a penny of investing in cryptocurrencies, and they are living in the primary frustration with their recipients.
Under the slogan "invest in cryptocurrencies" you will also find a whole lot of financial pyramids, scams and psaudo-investment funds that promise a monthly income of many percent.
Be careful not to get caught!
A big plus of investing in cryptocurrencies is the ability to do it yourself and directly.
We do not need middlemen and manage our capital. We must do it ourselves.
So how to invest in cryptocurrencies?
Investing in the future
We do not know if history will repeat itself and if we buy bitcoin now, when everyone hears about it, we will get it.
Perhaps it is better to look for a project that no one knows yet, how about bitcoin ten years ago, and so promising and well planned that it is strong in the future?
Czy may be better off investing only in the largest, oldest, proven cryptocurrencies with the largest capitalization, which in the future may want to invest in institutional capital, creating digital gold from bitcoin, raising its price to new maxima ? No one knows the future. If anyone knew him, he could easily become the richest man in the world.
Eventually, cryptocurrencies were bought to pay for them, as money was not in the banking system and government regulation. There have been very few such idealistic investors today because bitcoin i altcoiny they have become mainly today asset theory, something like stock exchange shares.
Some investors treat cryptocurrencies as investing in new technologies, new economies, as well as technological startups can become a big and profitable company in a day. It is possible that it was born in this market or it is the second Amazon. Such an assumption is supported by the comparison of the current, still early stages of development of the blockchain industry, as well as the great boom to invest in kryptowaluty of late and early 2017 2018 year to dot-com bubble, which which was created at an early stage of internet development. It was after the explosion of the bubble theory that even the weakest projects achieved huge valuations, companies now with global corporations like Facebook and Google are at the forefront.
In today’s economic model, it may not matter that tokens have little relevance to the project, they do not guarantee anything to investors and their valuation is often separate from the foundations if the shares of the companies are of high value that at least 100 will have to wait for the profits of a given company to achieve its stock capitalization. In this sense, the contractual linkage of cryptocurrency and the project it emits is not a problem.
The speculation in the cryptocurrency market
The basis of a given asset has nothing to do with stock market speculation. It does not matter to him what the asset is - whether he is buying and selling bitcoin, litecoin, PKN Orlen shares, ETF for gold or pig! All that matters is the price change. The main tool of his work is its chart and analysis, as well as market mood survey in the context of expected events related to a given asset.
The speculator builds a position, sets a profit, sets a stop loss and tries to earn a price change. Unlike Hodler, a common member of the cryptocurrency community who lives in the development of the project and supports its creators, speculation does not relate much to the given asset. He did not join any emotion, thanks to him there were no conversations selling a given token, making a profit or cutting a loss, while the hodler would not sell, because he thought it was a good cryptocurrency - he is afraid that by selling he will get off the train, he will lose something unique (FOMO), and the price will disappear and he will have to buy a more expensive token to continue to be part of the community of fans and investors of a given project.
An investor with a strong ideology connected to the cryptocurrency movement will not buy XRP, as it is a crook-bank, centralized cryptocurrency, which is a denial of what crypto-currency is supposed to be. The speculator makes no difference if he gets a change in the price of XRP, bitcoin or crude oil.
The pros and cons of speculation in cryptocurrencies
Speculation is one of the possible strategies for investing in cryptocurrencies. They are perfectly suited for this, as cryptocurrency has a high volatility. Imagination requires the investor, who in this case plays the role of a traser, good emotional skills, experience and appropriate graph analysis techniques. Imagination It uses a lot of time, which means for some people it can be a full-time job. You need to keep track of what is happening, what is news, rumors, news. You need to find bargains on the market, which are open 24 hours a day, and at different times increase the intensity of the activities of investors from Asia, Europe and the USA.
The Traider performs many moves, he assumes many positions, which means he can make many mistakes, losing funds. Summary of results is key for him the earned income is greater than the losses to stop the loss.
Long-term investment
Long-term investment, i.e. hodlowanie, is one of the possible strategies how to invest in cryptocurrencies. This is at once the easiest approach. It only assumes two moves, buying and selling, so it is difficult to make a larger number of mistakes. You don't have to keep track of daily charts and spend a lot of time looking for your investment.
Drawing on Warren Buffett, we buy kryptowaluty insights and we keep them, counting that as the project progresses and the adoption of blockchain and cryptocurrency technologies adds to everyday life, we maintain secure wallet cryptocurrencies, will be more expensive someday. Before buying, of course, we should carefully evaluate the project and invest only in the best of many. After the purchase we need to follow their fate so that you do not miss an important event.
Will we be affected? As I mentioned above, no one knows the future. Warren Buffett bought shares of American companies and maintained them on a long-term basis. The growth of the US economy and the current bubble in the local financial markets has made it one of the richest people in the world. If he did the same in Argentina, now he is bankrupt. If he did the same in Japan, now he is at a small minus. He made investments in great projects, but he was lucky enough to do it at the right place and time. The situation is similar to the cryptocurrency market. Buying a good cryptocurrency in 2015, 2016 or even 2017 year and doing nothing but breeding, you can be really rich. Will history change itself? If we buy a good cryptocurrency today, we will get thousands, hundreds, and maybe tens of percent of time. Do not forget that the project is likely to fall, and the price of its cryptocurrency will be zero.
Choosing your own investment strategy
In the past you could become rich by buying XRP in 2015 year and selling in 2018 year. It is necessary to make only two good moves - buying a good cryptocurrency when hardly anyone about cryptocurrencies heard it, and selling it when it became very cryptocurred. However, it is easy to invest more time and, speculating, to buy ICO tokens and then sell them after entering the stock market, for the first good time. This way, you can multiply the capital by making a lot of moves, making a lot of decisions.
And you, what approach do you like? You need to decide for yourself how you want to invest your funds.
Will you stop losing capital or price? What part of your capital is invested in cryptocurrencies? How long can you afford to free your capital from cryptocurrencies? Will you invest in the long term in the long run, buy helpful projects and wait several years for their development and expansion of the entire market? Or maybe you will be speculating in the short and medium term? Will you have enough time, perseverance and skills to make money from it?
