Cryptocurrencies must serve a purpose
Buying cryptocurrencies willy-nilly and hoping that they will go up in value just for existing is never going to work. As an investor, you need to find the cryptocurrencies that solve a purpose in the real world.
Right now, cryptocurrencies like Bitcoin are solving problems; they are allowing people to make anonymous transactions, which is particularly useful when making sensitive purchases; they are also enabling people who do not have access to traditional bank account functions, like paying for goods online and wiring money (you’d be shocked how many people in the world can’t do this) to do what they need to do. When currencies are no longer needed for whatever it is that they do, that is probably a good time to bail and invest in something that does still offer value. Actually, you need to get out BEFORE this starts to happen if you want to maximize your investments. That means watching the market and changes to payment technology very closely.
Don’t invest in only cryptocurrencies
It’s never a good idea to put all of your eggs in one basket, and that applies as much to cryptocurrencies as anything else. So, if you do want to invest in them, try to spread your cash between currencies, and on other investments like commodities or stocks and shares. A portfolio that includes cryptocurrencies is likely to be enriched, but one that only contains the likes of Litecoin and Ether is probably not going to be the best use of your capital that there is.
It’s never been easier to exchange cryptocurrency for money
There was a time when switching between cryptocurrency and cash was difficult, but with so many exchanges now available, it has never been easier to change between the two to maximize your returns. So, if you have been worrying about investing in crypto because of that, it’s probably safe to say that you don’t have to worry anymore and storing your money in the blockchain is just another option on the table like keeping it in the bank or hiding it under your mattress.
Remember that investments don’t always pay off
If you’re thinking that cryptocurrency is some wonderful new way of making lots of money guaranteed, then you need to think again, the cryptocurrency flash crash that occurred in September 2017, which saw the value of the ten most used currencies fall by 20 percent was a reminder that, like any other investment, cryptocurrencies cannot be, and are not guaranteed. That being said, you shouldn’t be put off by that particular blip either, as because it was market wide it isn’t really as big a deal as you might think, and prices are already recovering.
Think long-term
When you’re crypto’s value trebles in a day or so, it can be very tempting to cash out and enjoy your gains, but it is almost always a bad idea to do that. Buying your Litecoins or whatever crypto you choose, and then parking them, moving them between currencies occasionally as the markets change will almost certainly be your best chance of making big gains, even if it does take a while.
If you still want to invest in cryptocurrency after reading through everything in this article, I can’t stress how important it is that you do your research first. Take everything you’ve read into account, and there is every chance that you can make a real success of your new portfolio. Good luck.
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