Bitcoin had a massive run in 2017 – all the way from $900 up to $20,000.
Needless to stay it’s a highly, highly volatile asset – so the question is – is it worth investing in it?
So why are people investing? Do they understand or know something that Buffet or Gates haven’t realized? It’s a definite possibility.
What’s a cryptocurrency?
According to Wikipedia, “A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange that uses cryptography to secure its transactions, to control the creation of additional units, and to verify the transfer of assets.”
The most famous cryptocurrency, Bitcoin, has been around since 2009 when it was initially released by “Satoshi Nakamoto”, a person or group of people no one still has identified. Bitcoin is the first decentralized digital currency, as the system works without a central bank or single administrator.
Should I invest in cryptocurrencies?
This is entirely dependent on two things:
- Your risk profile
- Timeframe for cashing in your investment
Bitcoin and cryptocurrencies are highly volatile and risky assets to invest in. If you’re going to invest, invest a maximum of 5-10% of your investment capital.
Most people in the cryptocurrency investment realm seem to agree that the best way to invest into cryptocurrencies are:
- Only invest money you’re willing to lose
- Dollar Cost Average (DCA) your buys so that you’re getting a decent average buy in price
- Hold your investment. Don’t trade, and especially, don’t trade using margin or leveraged positions.
Basically, stagger your buy in positions, hold and let the investment be. Don’t invest if you can’t afford to lose 100% of your investment.
How do I buy cryptocurrencies?
The easiest way for most investors is to buy your cryptocurrencies from Coinbase (you’ll get $10 worth of Bitcoin using this link – highly recommended).
You can purchase using a credit/debit card, wire transfer or bank transfer.
Initially you’ll need to create your profile and verify that you’re a real person using your passport or your driver’s license (it’s fast and easy, so don’t worry).
When you’re verified it’s just a matter of depositing funds and clicking on “Buy/Sell” and then selecting the cryptocurrency you want to buy (e.g. Bitcoin).
Still confused? Check out this great video below for a short explanation of Bitcoin and cryptocurrencies.