Virtual or cryptocurrencies like Bitcoin and Ethereum have promised to become a hard and non-manipulatable money for the whole world. These currencies are immutable and exchangeable and some of the experts believe that these will eventually substitute Euro, Dollar, and others and will be the first free, hard world currency. So if you are holding Bitcoin that means you have a share in this venture. The past investors in crypto currencies have been immensely successful. If one day Bitcoin ever replaces the dollar and becomes the dominant currency for the international transaction the value of one Bitcoin will be far higher than 10,000 dollars. So holding a handful of Bitcoin is like to have a security pass to a large new ecosystem.
Since 2011, Bitcoin’s value has increased by 25000 percent and Ethereum’s value increased by 2700 percent from May 2016. The market cap of all cryptocurrencies soared by 10000 percent since the middle of 2013.
Now if you want to invest in cryptocurrencies you ought to know a word or two beforehand to invest smartly.
Why do you or do you not invest in Cryptocurrencies?
We have already discussed the initial reason for investing in cryptocurrency apart from that there are three reasons to invest in cryptocurrencies. First, you would always want to have a second security barrier against the fall of the Dollar which is inevitable someday. Second, you would want to invest in cryptocurrency also because you probably support the idea of a free and hard money for the whole world. Third, you believe in technology and understand it.
However, there are also reasons for which you would think twice to invest in cryptocurrency. The main mistakes people do while investing in cryptocurrencies is buying massively during the peak of the bubble. Before you invest you need to learn about it.
What Cryptocurrencies to be bought? And how to build your portfolio in Cryptocurrency
Earlier it was only Bitcoin. Until late 2016 there was no other cryptocurrency in the market. There was no alternative for you if you wanted to invest in cryptocurrency you had to buy Bitcoin. The situation has started to change from the end of 2016 and Bitcoin’s market share fell from 90 to 40 percent in 2017. This has been a result of the growing popularity of Ethereum and also due to self-tearing of Bitcoin community over the issue of the block size. Another lesson learned from this if you want to invest in cryptocurrency you need to keep your eyes and ears open.
Bitcoin is the standard item to be included in your portfolio but it should not be the only one. In a well-balanced crypto-portfolio, there should be currencies like Ethereum, Ripple, Litecoin.
How to buy Cryptocurrencies?
If you want to buy Bitcoin without the hassle of storing it then investment vehicles like XBT tracker, the Bitcoin investment trust on Second Markets, the Bitcoin ETI are the options. You can also buy real Bitcoin on exchanges and buy through it you can avoid paying higher fees for investment products. If you register with a cryptocurrency supermarket, (usually called altcoin exchange) you can buy and sell most of the currencies.