In this article, we want to go deeper into investing in Cryptocurrencies.
As we all know, Cryptocurrencies are a recent phenomenon.
Cryptocurrencies emerged as a result of dramatic innovations in finance. Over the past several years, interest in cryptocurrencies has increased significantly, and they can now be considered a legitimate investment instrument.
Cryptocurrency investing is the act of buying and selling the underlying coins via an exchange. Because the volatility of cryptocurrencies grossly exceeds that of any other investment class, they are not a normal investment. However, due to the high volatility of their returns, cryptocurrency investment portfolios likely should be monitored in real-time and constantly adjusted. Plus, there is always the risk that your country may outlaw cryptocurrency trading and exchange. If that’s the case, then you should make your peace with not liquidating your crypto assets.
crypto mentors prefer to review the Crypto markets every morning, even though the crypto market place never sleeps. The online trading in Cryptos occurs 24/7 offering the crypto traders trading opportunities incessantly.
In general, the crypto investors focus on the top ten cryptos to begin their journey into cryptocurrency trading. Frequently cited currencies are, Ripple (XRP), Ethereum (ETH), Bitcoin cash (BCH), and Lite coin(LTC).
Although, as of August 2018, the number of cryptocurrencies traded in the Crypto market place exceeds 1600 – thus offering plenty of opportunities to beginners and experienced crypto investors many opportunities to trade and invest in cryptos.
In the short term, investing in cryptocurrencies yields can achieve substantial returns, in combination with substantial risk. It is worthy enough to mention that: there should be enough portfolio diversification.
In the long term, their potential as an investment instrument will likely depend on regulatory developments, as well as market dynamics and whether there will be enough users for a variety of cryptocurrencies.
As a crypto enthusiast, if you are looking at investing in Cryptos then you must familiarize yourself with the crypto exchanges. Not all Crypto exchanges are alike. They differ in Cryptocurrencies offered, trading commissions, and if they accept fiat currencies or not. In addition, you also need to understand the concepts of hot wallets and cold wallets.
The hot wallet is like the wallet you carry around in your pocket. It gives you easy access to your cash but, it is pretty vulnerable.
The cold wallet, on the other hand, is like your savings account. Highly impractical for day-to-day use BUT it is extremely safe when you compare the two.
Cryptocurrency markets move according to supply and demand. However, as they are decentralized, they tend to remain free from many of the economic and political concerns that affect traditional currencies. While there is still a lot of uncertainty surrounding cryptocurrencies, the following factors can have a significant impact on their prices:
- Supply: the total number of coins and the rate at which they are released, destroyed or lost
- Market capitalization: the value of all the coins in existence and how users perceive this to be developing