The past few months have seen an unprecedented level of interest in Blockchain technology thanks to the multi-fold returns that many cryptocurrencies saw in 2017. Investors eager to be part of the Web 2.0 infrastructure are being called “”Internet of Money. However, like any other investment vehicle, cryptocurrency investing is fraught with risks as the space is filled with scams trying to prey on unsuspecting investors. Here are the best investment methods to invest in the cryptocurrency market:
Do your research
As with any other investment, it helps a lot to understand the underlying technology behind it. Cryptocurrencies based on Blockchain Technology are relatively difficult to conceptualize for new investors. However, there are plenty of helpful resources like YouTube videos and online forums like Reddit to help with the process. The most revered crypto channels on YouTube include Box Mining, Data Dash, and Tommy World Power. Investors familiar with programming can go through the white paper where the technology is described in detail to evaluate a particular Cryptocurrency. The past few months have seen a lot of growth in projects that seem to have no real-world use cases like Denta Coin and Monetha, which have raked in millions of dollars in investments without any real-world use cases. clear path or goal. As a general rule, investors should only invest in coins they understand well. Some questions to ask before investing in a project are:
What problem is this project trying to solve?
What are the alternatives to this cryptocurrency?
What is the current industry of the project?
How competitive is this industry?
If you cannot satisfactorily answer these questions, it is best to avoid investing in the project.
Invest in Initial Coin Offerings
Initial Coin Offerings, or ICOs, saw a huge amount of interest from investors in 2017. ICOs are a unique new way to get capital for startups, bringing in investors. Get the chance to get involved early on a project they believe in. However, there are a lot of ICOs that are pure cash schemes, so it is essential to take the time to research any ICO before investing. Initial coin offerings are falling into some regulated muddy waters as some countries like China consider these to be elaborate Ponzi schemes. But some other countries like Russia and some European countries have supported the ICO. Successful ICOs from 2017 include EOS, ICON, OmiseGo, 0x, TenX and many more. All of these cryptocurrencies have seen 5x or more returns from their ICO prices, making them one of the best performing assets in 2017. It’s even more important to research. Research an ICO project, some of these projects have huge marketing budgets and project themselves as legitimate projects even without a serious implementation roadmap.
No day trading
Day trading has consistently proven to be a lousy investment strategy to gain long term profits in the Cryptocurrency market. Technical analysis depends on the assumption that the market will repeat what it has done in the past. This hypothesis has been put forward to the Cryptocurrency market many times over the past decade. Cryptocurrencies, as it is so new, do not seem to follow any predictable pattern except that Cryptocurrencies have strong fundamentals that will increase in value over the long term. There are countless stories on Reddit about how people ended up with less Bitcoin or Ethereum than they originally started due to day trading. A famous adage: “The best way to make a million dollars in day trading is to start with two million dollars.”
One of the most successful investment techniques that have been proven to yield many times returns in Cryptocurrencies by far is long-term investing. The strategy is based on buying a Cryptocurrency with a solid core use case and growing and holding it for a long time. This way investors don’t have to worry about the intraday movements of their Cryptocurrencies if they believe the coin has long term value. Holding any major Cryptocurrencies for an extended period of time in 2017 will yield many times returns and if 2018 sees similar growth in the market, holding firmly Definitely the best bet for investors.
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