Blockchain technology has been heating up in the past several months, thanks in large part to the surge in Bitcoin's price since early May.
The cryptocurrency skyrocketed from less than $1,000 in March to an all-time high just under $5000.
Given this meteoric rise, it's no surprise that investors are clamoring to figure out how to break into the digicoin marketplace. But there are many other cryptocurrencies such as Ethereum and Litecoin where investors can funnel their money.
However, investing in a cryptocurrency is different than investing in a regular stock. When you invest in a company, you're buying shares of that company and essentially own an extremely small percentage of it. When you invest in Bitcoin or Ethereum, you receive digital tokens that serve different purposes. With Bitcoin, you get decentralized currency that also happens to be partially anonymous. With Ethereum, you get a piece of the power that runs decentralized apps and smart contracts.
Trading cryptocurrencies occurs on dedicated exchanges. COINSTEC™ offers solid volume to trade cryptocurrencies through bank transfers or credit cards.COINSTEC™ is growing in popularity thanks to its ease of use and a built-in wallet.
Investing in Crypto is a strategical decision that comes with its own set of risks and rewards. People who are uncertain about the nature of Crypto may be reluctant to invest in it – however, Crypto has seen an increase in median price over the recent years and shows potential for the future. The majority of investments made through Crypto are from venture capitalists who are trying to cash in on their foresight.
Cryptocurrencies are not a normal investment. The volatility grossly exceeds that of any other investment class. It is to some parts unregulated. There is the risk that cryptocurrencies get outlawed, that exchanges get hacked or that you lose your cryptocurrency key. Cryptocurrencies are a high-risk investment.
Besides what was already said, there are three major good reasons to invest in cryptocurrencies. First, because you want to hedge your net-worth against the fall of the Dollar imperium, which is assumed by many people to inevitably happen at some time. Second, because you support the social vision behind cryptocurrencies – that of a free and hard money for the whole world. Third, because you understand and like the technology.