Cryptocurrencies have been around for a few years now and you might have wondered if you’re missed the boat when it comes to cashing in on the crypto bubble.
Like most forms of investment, crypto has its evangelists and its critics. After all, it is an unregulated market.
What exactly is bitcoin?
Cryptocurrencies are an electronic, decentralized form of money. They are worth the same amount of money all over the world so are not affected by a country’s exchange rates. Money is transferred between accounts via blockchain technology rather than a standard banking system. For more information on cryptocurrency, visit swyftx, which has a lot of good guides on their platform.
What are the main currencies?
Most people will have heard of Bitcoin, the most well-known cryptocurrency. It is estimated to be worth $128 billion as of the end of the first quarter of 2020. This is followed by Ethereum ($19.4 billion) and Ripple ($8.2 billion). Many other currencies have popped up (and disappeared) since the launch of Bitcoin back in 2009.
The rise and fall of the value of cryptocurrencies such as Bitcoin have been extremely volatile. For example, if you bought a single Bitcoin at the end of 2016, it would have been worth just over $600, just under a year later it was worth almost $11K. Two weeks after this peak it was worth just over $8K.
If you had invested a few hundred dollars at the end of 2010, you’d be a millionaire many times over today.
Should you invest in cryptocurrency?
As investment strategies go, this has an extremely high risk and reward profile. The market is volatile and unregulated. Some of the new challenger currencies have a high potential of going bust, losing your entire investment. Many investment professionals advise you to stay away or at least spread your risk across multiple currencies.
Yet, if the market does experience another spike, your relatively small sum of money could multiply many times over and provide you with a huge return on your investment.
Where can you buy a cryptocurrency?
There are many platforms out there for trading. The most well known include Swyftx, Binance, and Coinbase.
Each has their own fees with regards to buying, selling, and withdrawing from the platform, so make sure you know what these are and factor them into your calculations.
Investing in cryptocurrencies carries a high level of risk for a potentially very high reward. If you are looking for investments with more predictable, stable returns, then it would make sense to go with more traditional forms of investing. However, the cryptocurrency looks to be here to stay in one form or another, giving you the chance to make a lot of money should the market swing in the direction it did back in 2017.
As with all investments, weigh up the pros and cons carefully and don’t spend any more than you can afford to lose.