How To Buy Cryptocurrency
How To Buy Cryptocurrency
We are just at the beginning of the new revolution in blockchain-related technologies and in terms of the development of this industry. Cryptocurrencies are a small part of that emerging industry. This new blockchain technology is going to be a game changer and could be the most important new development since the invention of the internet.
While most people are still struggling to get their heads around blockchain technology and are figuring out how to buy cryptocurrency. Cryptocurrency’s like Bitcoin have exploded in price and attracted world-wide attention.
[Bitcoin’s Price Performance Jan 2017 – Jan 2018]
However some speculated that the run-up in the Bitcoin price, particularly during December 2017 (from $8,000 to nearly $20,000) meant that Bitcoin is in a bubble that could burst at any moment.
“Investing in this cryptocurrency market is risky. Yet the price of Bitcoin could still climb to $50,000 just as easily as it could collapse to $500″.
Not the First Time
But if that happen’s it’s not the first time Bitcoin has risen rapidly and then quickly declined.
The first time was in 2011-12, when Bitcoin soared from $1 to nearly $32 within two months, plummeting 92% over the next six months, falling all the way back down to $2.
The second time Bitcoin soared was in 2013-14, soaring to just over $1,000 before declining 83% and remained at around $300 until late 2016, before beginning its ascent.
A Little History
There has been a number of pullbacks in the price of Bitcoin during its nine year history, but looking back they all appear to have been episodes of consolidation rather than actual crashes and while these pullbacks were often quite steep, and apart from long period during 2015, they were relatively short-lived.
In each case, the value of Bitcoin has continued to rise over time, as we can see in the graph below – overall its risen a staggering 75 million percent since its inception.
So, if Bitcoin does go into a decline, (if history is anything to go by) it may just be another period of consolidation, and probably within three to six months, Bitcoin may revisit its all-time high and go even higher.
“However as with any ‘investment‘ you should never risk what you can’t afford to lose”.
While we will continue to see high volatility in prices, the long-term direction however is upward and I’ll discuss the reasons why I believe that soon. In the meantime, I want to discuss something very important with you if you are wanting to learn how to invest in cryptocurrency profitably.
It’s Not Just About Bitcoin.
It’s not all about Bitcoin. Sure, Bitcoin is the poster child for the cryptocurrency market and gets the most attention and a lot of people have made a lot of money from Bitcoin, but I want to show you where the real money is made.
Just compare the annual returns of these three cryptocurrencies:
|Price Jan. 1, 2017
|Price Jan. 1, 2018
|Profit / Return
|1 X Bitcoin
|1 X Litecoin
|1 X Ethereum
In other words, just by investing $1,000 on January, 1st, 2017, till January, 1st, 2018. You could have seen these results;
- In Bitcoin would have netted you – $13,644.30.
- In Litecoin would have netted you – $28,031.30
- In Etherum would have netted you – $173,540.40
Bitcoin Gets The Attention
So, while Bitcoin gets all the attention some other cryptocurrencies are getting all the money. And that’s just the start of how profitable some of these other cryptocurrencies can be.
It may be hard to believe that the price of cryptocurrencies are climbing that fast and some are even doubling almost daily and many increasing by more than 300% in less than twenty-four hours.
But you might be surprised to learn that many of these cryptocurrencies are trading at just a tiny fraction of the price of the well known coins like Bitcoin.
See the list (below) of TEN Cryptocurrencies that have increased by more than 200% in less than 24 hours. And there are dozens of them. Some rise and fall hourly and others make significant weekly gains.
As of this writing, there are 1,384+ cryptocurrencies listed on CoinMarketCap.com, but not all of them are worth buying. But the number of cryptocurrencies and investment dollars going into them is not surprising, considering the absolute staggering gains some cryptocurrencies can bring.
Let me give you some examples of some of the more well known cryptocurrencies.
Since February 2015, Litecoin has skyrocketed an exceptional 18,820%
Then there is a cryptocurrency called Verge, which saw a 3,782% in less than three months.
Some may not have heard of Verge, but it’s also a decentralized currency, intended to enhance privacy when buying goods and services. Essentially, what they’ve done is taken the original Bitcoin blockchain and improved upon it.
That 3,782% gain over three months is enough to turn every $500 invested into $18,910, or every $5,000, into $189,100, in a just a matter of weeks.
But, that’s nothing compared to another cryptocurrency called NEO.
A small $100 investment in this, would have landed you a tidy $15,678 profit. And if you’d been bold enough to invest $5,000. You would have made $788,900.
Not Pie In The Sky
But, this is not all just historical references of what could have been achieved. There are many, many other examples.
“I personally started with just US$500 and invested in some cryptocurrencies and in less than two months have seen unbelievable results”.
You can imagine, I was very pleased with myself when my initial $500 balance grew to $1,562.12.
- I got pretty excited when it moved up to $3,462.76.
- A few weeks later it hit $6,484.27 (late November early December, 2017)
Wow! I was thrilled with that.
Then in January 2018 it had grown again! Take a look at the screen shots below taken just days apart on January, 3rd, 4th and 5th.
Yes, that is, eighteen thousand one hundred and fifty dollars, ($18,150.16) all from an initial $500 investment. This is a real life example of the absolute staggering gains cryptocurrencies can bring.
How Did That Happen?
Now, notice that the Crypto balances (the number of coins) haven’t changed I have not ‘traded’ these currencies and Bitcoin plays only a minor role in this portfolio.
It’s because of price moves like the ones below, such as my investment of 1,000 coins in Nexus, (which I had bought at about 0.27 cents) and it increased significantly a few times and then recently moved from below $3.00 to $10.00 (a further tripling of value) over the course of a few days.
And a futher increase in value of Ethereum from around $400 to more than $1,000 in just a few weeks.
And Ripple has done well too, moving from less than $0.25 to more than $3.00 A 12 fold increase within a few weeks.
And my speculative investment of 5,000 coins in PotCoin, which I bought for less than .06 cents (back in November) is now trading at around 36 cents, or six times the initial buy price.
Now, all of these have surpassed Bitcoins rises and collectively, made me more money than if I was just invested in just Bitcoin itself. And they cost less and moved faster.
That’s not to say that Bitcoin is not a valuable coin to have, because it most definitely is. Bitcoin is what you need to buy and trade other cryptocurrencies. So it’s an important lubricant in the cryptocurrency trading market place and therefore will always be a ‘sort-after‘ currency that has utility value.
Why Bitcoin Will Still Be A Great Investment
Bitcoin has proven that the utility of the blockchain protocols makes the transfer of assets faster, cheaper, and entirely secure, all at a fraction of the cost to the way things currently work.
And now that Cryptocurrencies, are attracting world-wide attention, with massive price movements and staggering profits being made. Big financial institutions are scrambling to get into this exploding crypto-industry.
There is still a major part of the financial industry, that hasn’t entered the market yet. I’m talking about the institutional investors like hedge funds, big money managers who manage trillions of dollars, sovereign wealth funds with billions of dollars to invest.
It is only recently that the Commodity Futures Trading Commission (CFTC) has given the go-ahead for the two big Chicago-based derivatives exchanges to launch Bitcoin futures trading. Opening the door for institutional investors to invest potentially billions of dollars into the cryptocurrency market and when they do prices, will rise in response.
A Growing Market
It may be hard for some to believe when they already see the price of cryptocurrencies climbing almost daily. It might seem like this is already a huge market. But you might be surprised to learn that the cryptocurrency market is still just a small fraction of other financial market assets compared to the $76 Trillion global stock market capitalisation, for example.
Currently, all the cryptocurrencies have a market cap of around $750 billion and may soon reach a Trillion Dollars. But that market cap is made up of more than just Bitcoin and the others that I have mentioned.
A Changing Market
Bitcoin is actually losing dominance in the cryptocurrency market percentage wise. Not too long ago it was responsible for more than 50% of that market, now its around 30% with the balance going to the many other and growing number of alternative crypto-coins.
Now that more investors are coming into the market they are looking for less expensive cryptocurrencies than the ones mentioned above and with expectations of finding the ‘next rapidly rising Bitcoin‘.
While 2017, may have produced a number of cryptocurrency millionaires. Specifically, 2,905 people who are now worth over $1 million, 419 people of whom are worth more than $10 million and 80 that are worth, over $50 million.
There is still something important you should know…
Be Very Careful…
I want you to beware of the hazards involved with buying cryptocurrencies because like all new industries there are going to be more losers than winners.
There are going to be scammers and ripoff artists and coins and tokens created just to cash in on the rising popularity of the cryptocurrency market. So, you need to be careful with your choices and selections and thorough in your research and due diligence. So, I have some tips for you.
How to Buy Cryptocurrency
To limit your risk, you need to perform your due diligence before making a decision on whether to buy a crypto coin.
Unfortunately, the amount of information to review can be overwhelming, and a lot of people don’t even know where to start looking before making a decision. Often leaving them making a hasty decision because they don’t want to miss out.
They either end up regretting the decision, or some don’t make any decisions and sit on the sidelines watching other people get rich.
What I look For
What is vital for any cryptocurrency to succeed long term, and what I look for whenever I evaluate a potential investment, in this burgeoning digital currency market. Is to find out whether it has a legitimate “use”.
In other words, the first thing I need to know if it actually solves a problem, provides a solution or moves the crypto technology forward in some way. This to me is a big factor in determining its long-term success, because I want to know that once it catches on, investors will stick with it past initial price spikes.
The second thing I look into is the background of the creators of the currency. If I can confirm that the team behind the crypto has a solid track record, I know that they aren’t a bunch of scam artists looking to make a quick buck. Evaluating the leadership behind a coin, will help you avoid scams.
But, just having a well-qualified leadership team isn’t enough to make a price surge on its own.
Aside from strong leadership, a crypto company also needs to have realistic goals and expectations of what it can accomplish.
The Third thing I take a look at the underlying blockchain technology, is it based on a pre-established successful network and protocols like Bitcoin or Ethereum. Or are they’re trying to create their own from scratch and if they are, what is their points of difference and how is going to be better?
The Fourth step is to see if it has a supply cap. Because the problem with traditional currency is that it can be and is always being inflated and that decreases its long term value. So if the supply is limited and the demand is strong then the value must increase as a result.
Know The Team Before Investing
Back in November 2017, a new cryptocurrency startup called Confido, labeled itself as a “smart contract” raised $375,000 virtually overnight, through an ICO. On Confido’s website, CEO Joost van Doorn was listed as having a Master’s Degree in International Business with previous work experience at eBay Inc. and PepsiCo Inc.
But, on Nov. 22, 2017 the company’s website, Twitter account, and Facebook page were erased and the CEO and the $375,000 had vanished.
By taking all of the funds and not having a working project, the Confido coin was now worthless. But, fortunately, on Dec. 23, 2017, according to a press release from Jonkers & Van Gemert Advocaten, a law firm representing Confido, they bought back all the tokens for a nominal fee.
The lesson here is even if Doorn did work at those companies, he never specified a position he held there, he could have just been an intern or worked at those companies for less than a year. And this could have been millions and not a few hundred thousand dollars that potentially got taken.
You should only invest in cryptocurrencies with strong team members that have track records of success in previous roles and positions that can be verified.
For example; Litecoin, creator Charlie Lee, was a former engineer at Alphabet Inc. (Nasdaq: GOOGL), as well as the former director of engineering at the cryptocurrency exchange Coinbase. Lee not only has high-level technological experience, but also direct experience in the crypto world, so potential investors would know he’s at least has credibility in the Crypto space. It seems to have worked.
Having a well-qualified leadership team isn’t enough, they also need to have realistic goals and expectations of what it can accomplish so avoid impossible promises and avoid companies promoting a new coin with what sounds too-good-to-be-true claims.
It’s very unlikely, for instance, that a new cryptocurrency will suddenly become ‘bigger than Bitcoin‘. So you need to watch out for outsized claims of what the cryptocurrency will do, such as ‘totally change the way‘ some sector operates. They still need to solve real problems and not just be another ‘me too‘.
You Won’t Get Rich
And you won’t get rich by following my picks, because it’s about timing and I got in on some of these before they moved up. They could move up again soon or not at all. However, two of my picks are speculation plays (Potcoin and Ripple) as they don’t have a limited supply.
However, as Google is a backer of Ripple and many US states are planning to legalize marijuana for recreational use, in the near future. (To date, 29 states have approved legalized medical marijuana.) I believed that others will want to buy those Cryptos, so I took a position in them because they were cheap. The others I have in my portfolio as longer term positions.
However, you will need to find your own speculation plays and your own long term investments that feel right for you. You need to dig in and do your own research and due diligence. I have given you what works for me.
The Botton Line
“Not all cryptocurrencies are worth investing in. The ones that have a strong leadership team and creators who don’t overpromise what their crypto’s can do, and can solve a real problem. Will probably have demand, and that will drive up its price. But don’t expect the prices to continue climbing like they have been. Expect downturns and even a few losses”.
By the time I had finished writing this post, the value of my initial $500 portfolio had increased again. Take a look here:
That’s – Twenty Thousand Dollars ($20,325.35)
NOTE: I am not showing you this to brag, but rather to show you, (that unlike a lot of supposed ‘crypto experts‘ who are blogging, out there) I am actually making money from my crypto investments. But even if the price drops in half and then halves again I’m still way ahead. – To read and learn more from me, you can review the following;
Further Reading and Posts
To learn more about the many other types of Cryptocurrencies that are available and why they may be a good way to protect yourself from the wealth-destroying policies of governments and central bankers. Also with more than 1000+ different Cryptocurrencies now available, finding the ‘right‘ ones can be a daunting experience. You may like to visit my post ‘What is a Cryptocurrency’
|You can use this link here: ‘What is a Cryptocurrency’
To learn more how Bitcoin is used as digital money how the digital transactions take place and what is meant by a distributed ledger called a blockchain and what it is that make Bitcoin value; Visit my post What Is A Bitcoin?
|You can use this link here What Is A Bitcoin
To learn more about how this blockchain technology may be the most important single development since the invention of the internet itself. How it’s going to be a game changer. You may like to visit my post What is Bitcoin About?
|You can use this link here: What Is Bitcoin About?
To learn more about how to buy Bitcoin with cash or, Credit Card, PayPal, Bank Transfer, or any other payment methodology and currency you desire (well almost). I step you through the process and show you how to open accounts and which ones to use that give you the most freedom and flexibility. Visit my post ‘How to Buy Bitcoin with Cash‘
|You can use this link here: How to Buy Bitcoin with Cash‘
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