Crypto trading and investing is a form of alternative investment that’s been very popular over the past few years due to its lucrative returns and exciting volatility. The first decentralized cryptocurrency, Bitcoin, was launched in 2009 by an anonymous individual or group using the alias Satoshi Nakamoto, who claimed to have invented the first digital currency as a way to make transactions less cumbersome.
Today, cryptocurrencies are used in myriad ways, but most commonly as money, investment opportunities, and even as alternative forms of payment in certain cases. As you consider whether to begin crypto trading and investing, here are some things you should know.
Initial Coin Offering (ICO)
An ICO, or initial coin offering, is a method of crowdfunding via the use of cryptocurrency. A company looking to raise money can sell digital tokens to investors in exchange for bitcoin or other cryptocurrencies.
Though no startup has yet managed to attract hundreds of millions of dollars through an ICO, as some startups did with their traditional IPOs, these offerings are raising enormous sums of money at an unprecedented rate.
According to a recent study conducted by research firm Smith + Crown, more than $1 billion was raised via ICOs in 2016 alone, with another $2 billion raised just since January 2017. In comparison, only about $300 million was raised via VC funding over that same time period. The average amount raised per ICO was roughly $12 million during 2016 and 2017 (though there have been notable outliers).
It’s still early days for token sales; it remains to be seen whether they will become a viable alternative to venture capital funding—or even an effective way to fund new blockchain-based projects at all. But given how quickly they have risen up from obscurity, it seems safe to say that we haven’t heard the last of them yet.
Best Exchanges To Trade Bitcoin, Ether & Other Cryptocurrencies
Trading Bitcoin, Ether, or any other cryptocurrency is much like any other financial activity in that you want to go where you're treated best. There are a lot of exchanges out there, some better than others. Below is a list of several reputable exchanges.
Before signing up with an exchange, do your research on its reputation and read what customers say about it on online forums such as Reddit. If security is important to you, use two-factor authentication when possible (learn more about using two-factor authentication).
Once you sign up for an account, move your coins off of exchanges if you can—it's not worth it for their convenience when an exchange gets hacked or just disappears into thin air with millions of customer dollars.
For example, Coinbase recently announced that they were being acquired by Goldman Sachs; most customers don't know yet whether they'll be able to keep their accounts. While these events are uncommon and happen infrequently, every individual instance has created new anxiety for users who worry about how safe their money will be once it leaves an exchange.
To avoid losing money or seeing your investments fluctuate wildly while waiting for answers from customer service representatives at these exchanges, consider keeping your funds on a personal wallet like MyEtherWallet or Metamask instead of leaving them on an exchange platform.
The advantage here is clear: if you have funds stolen from an exchange platform (or otherwise), they’re likely gone forever unless there’s some type of hack available to retrieve them.
Tips For Trading Crypto
Cryptocurrency trading is a relatively new investment market where traders can profit from fluctuations in cryptocurrency prices. Though it may be tempting to jump into an investment opportunity, it’s important to not act too hastily or invest money you can’t afford to lose.
In order to get started with cryptocurrency investment, you need to first learn how cryptos work, what kind of opportunities are available, and what kind of risks are involved.
Some ways investors have lost money on cryptocurrencies include: purchasing via exchanges without proper security measures; sending crypto-coins over untrusted networks (like Skype); hacking through malware; using Ponzi schemes that promised high returns with little risk; or using someone else’s computer for mining which could put your personal files at risk for malware.
How To Securely Store Your Cryptocurrency
Cryptocurrency is a digital currency that enables instant payments to anyone in the world. Many people think of it as an investment, while others use it to make transactions. There are numerous exchanges out there, but how do you secure your cryptocurrency wallet?
This is a multi-step process that may seem complicated at first, but we'll break it down for you so you can start using cryptocurrencies today. Here are some simple steps to secure your cryptocurrency wallet First, create a strong password.
Next, back up your private key (which will be used to access any funds). Make sure you have multiple copies of your private key stored in different locations such as on paper or USB drive.
Finally, store any backups offline and encrypt them with something like VeraCrypt. The next time someone asks if you know what ICOs are or if you’ve heard about Ethereum, refer them here!
Do’s And Don’ts When Trading CryptoCurrency
The only thing more nerve-wracking than buying cryptocurrency is selling it. Cryptocurrency traders are known for their overly emotional reactions to news events, causing wild price swings up or down.
If you’re planning on cashing out any profits from your venture into cryptocurrency, there are some key tips to keep in mind when determining how to safely sell your coins without losing money: Don’t Panic: The wild fluctuations of cryptocurrencies can make it tempting to sell a coin if it has lost value.
In these cases, try to remain calm and think long-term. After all, even if a coin drops by 50 percent in a day, that doesn’t mean its value won’t be up 1000 percent next year.
Conclusion
The world of cryptocurrency is fascinating and it seems like it’s still new. You should explore various facets of it before considering investing in it. The boom or bust factor is real here. Either way, keep an eye on what happens with Bitcoin. Its value has grown from just $1000 to around $6,500 today.
That’s a growth of over 1500% in just three years! And who knows how high will its price go over time if cryptocurrency will continue to grow at that pace? If you do decide to invest in cryptocurrencies, please make sure you research your options well first.
There are plenty of resources online where you can learn more about them. If you want to get started right away, check out Coinbase. It’s one of the most popular platforms for buying and selling cryptocurrencies like Bitcoin and Ethereum. I hope you found my answer helpful! Have a great day ahead!
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