Investments in cryptocurrency- this is a good way to earn money. In 2017, the popularity of cryptocoins increased sharply against the backdrop of intense growth and interest in them from investors. Those who invested money in cryptocurrency managed to make good money. The value and popularity of virtual coins will continue to grow, and blockchain technology will spread and be implemented in many sectors of the economy. Therefore, we will consider the question of how and in which cryptocurrencies you need to invest and whether it is worth doing it at the moment.
Everyone has heard about Bitcoin and Ethereum, but they don’t realize that there are an order of magnitude more virtual coins. As of November 21, 2017, 1315 cryptocurrencies were presented. The capitalization of 30% of them does not reach 1000 US dollars.
How you can invest in cryptocurrency and earn income:
Which cryptocurrencies to invest in? We believe that the value of the main coins will continue to grow, and therefore it is possible to create an investment portfolio from them. Don’t forget about new cryptocurrencies; you need to follow projects conducting ICOs and not miss the most successful ones. If the plans are successfully implemented, the token can bring a profitability of several hundred percent.
List of exchanges for working with cryptocurrency:
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This article contains the opinion of the online publication Coinspectator on which altcoins should be in your cryptocurrency portfolio this year.
The cloud storage industry is now dominated by DropBox, Google, Microsoft and Amazon. These companies have grabbed the lion's share of clients in file hosting and, of course, competitors want to change the current situation. A small and unknown blockchain startup, Sia, aims to end this monopoly by replacing the technology and process.
Current storage methods rely on massive data centers and server farms. This centralized approach creates many problems, such as:
Control– one company has complete control over all your data.
Possession– who owns your data and how they will use it, they may want to profit from it.
Safety– centralization means mistakes, abuse of trust. Hackers can also target their malicious efforts at a specific company or architecture. It is a public fact that DropBox has lost 68 million of its users' passwords.
Scalability– Every large organization needs to operate massive data centers to meet storage needs.
As companies grow, these problems get worse.
The blockchain technology behind the Sia project is completely new to the industry, and has a more decentralized approach to solve the problems previously voiced.
When consumers upload a file to the network, it automatically encrypts it and splits it into hundreds of small pieces. Only the person who uploaded the data has the private key to decrypt and view the data. All these encrypted pieces of data are then downloaded through multiple hosts and duplicated for reliability.
With Sia storage, there is no longer control or ownership of the data by a single company - the service provider. Instead, anyone can become a file host, renting out free, unused hard drive space for encrypted data. The hoster and the person who uploaded the data virtually shake hands, thereby entering into a smart contract that regulates the placement of information and payment for the services of the hoster.
Sia is clearly solving real storage problems and showing good progress on the project. Therefore, we believe that now is a good time to invest in this project.
A $1000 investment today will give you 113,000 Sia coins.
Cryptocurrency is the most profitable object for investing money based on the results of 2016. At the same time, the risks associated with jumps in Internet gold quotes are incomparably greater than in relation to, for example, precious metals, resources or real estate. Is it worth continuing (or starting) investing in cryptocurrency in 2018, and how to choose the most promising ones from 800 types?
When choosing which cryptocurrency to buy among the young altcoins that have risen in recent months, you should remember that their rate is fueled to a large extent by speculation, advertising and hype. It is more difficult to predict than the positions of the “old boys”, such as Bitcoin and Ethereum. It can either grow further or unexpectedly fall.
There are a number of technical concerns regarding Bitcoin. With the expansion of the generated money supply, the network congestion increases (which also leads to transactions being slower); small transactions become unprofitable due to large commissions. This could lead to a weakening of the status of BTC as a payment instrument, and therefore affect, if not the price, then the rate of change in quotes.
Many users still see cryptocurrency investments as a financial pyramid, and perceive its growth as a “bubble.” It is possible to predict changes in the exchange rate of Internet money with greater certainty only for the long term.
Interesting! An experiment conducted in 2016 by one blogger showed that buying $14 thousand worth of bitcoins (and then selling them at the end of the year) and injecting the same amount of funds intoHashFlare gave approximately the same result in terms of profit.
What to look for when choosing an investment option:
Bitcoin- a traditional investment option. According to analysts, all investment methods will be profitable: simple acquisition and storage with subsequent sale, cloud mining and construction of farms.
Ethereum- platform cryptocurrency based on smart contract technology. It is of interest to many financial market players, including Sberbank. During the first half of the year, its price increased 34 times.
Ripple demonstrates the largest rate of increase in value, 42 times over 6 months. These are public exchange coins with free transactions. Despite its “youth”, according to many indicators based on the results of 2016, ripple takes second place after BTC.
Monero- a truly anonymous Internet currency. It is distinguished from others by a low level of volatility, but stable growth. In the first half of the year, investors received a return of 334%.
LiteCoin- a popular coin, traded in huge quantities on exchanges. Showed a jump in cost from $4.5 to $40 in six months.
Interesting! The share of altcoins (non-bitcoins) in the total capitalization has grown 2.4 times over the past couple of years and now stands at 55.3%.
In Russia, a law on “money surrogate” was expected in the winter of 2017-2018. Not everyone, like the head of the Central Bank, shares the enthusiasm for the opportunities offered by new Internet technologies. A regulatory act can, with equal probability, both announce the assignment of foreign status and a complete ban on the use, conduct of operations, and mining of cryptocurrency. This must be kept in mind when assessing the risks and returns when investing in digital gold.
During 2017, cryptocurrencies experienced several waves of active growth, as a result of which their value increased tenfold. The market, tiny by the standards of financial institutions, attracted the attention of corporations, central banks and millions of private users. Cryptocurrencies have become a promising long-term investment tool. To determine an effective investment strategy, you should study the market dynamics in more detail in 2017.
One of the main features of the cryptocurrency market is the initially low cost of many assets. Conventional instruments, such as corporate shares or precious metals, lend themselves to traditional valuation methods and are understandable to most investors. Blockchain is a relatively new phenomenon that is at the beginning of its development. The growth of Bitcoin and other cryptocurrencies occurs at a relatively low base value, which is why the return on investment can reach several hundred and even thousands of percent per annum.
The main danger of cryptocurrencies lies in the absence of formal evaluation methods. The market often turns out to be “overheated” due to a sharp increase in interest in virtual coins in certain countries. Novice investors often seek to buy cryptocurrency “here and now” at the current price, even if it looks unreasonably high. After such sharp surges in demand, the market can experience deep declines, sometimes reaching 70 percent or more.
Despite significant price fluctuations, cryptocurrencies remain one of the most attractive asset categories for investors. It is most likely that in the long term the demand for virtual money will remain consistently high. To better understand the dynamics of market development, it is worth considering specific examples of the growth of cryptocurrencies in 2017.
For the analysis, we selected currencies that already existed at the time of January 1, 2017, and by the end of December had the largest capitalization. Bitcoin has held the palm in the crypto market for many years, but almost all top altcoins have overtaken it in terms of profitability. All data on the growth of cryptocurrencies in 2017 is summarized in a table.
| Name | Price 01/01/2017, $ | Price 12/19/2017, $ | Profitability ratio |
| Bitcoin | 963 | 18 851 | x19 |
| Ethereum | 8,26 | 793 | x96 |
| Ripple | 0,0065 | 0,77 | x118 |
| Litecoin | 4,37 | 347 | x79 |
| Dash | 11,26 | 1 140 | x101 |
| NEM | 0,0036 | 0,81 | x225 |
| Monero | 13,58 | 369 | x27 |
| NEO | 0,144 | 77,7 | x539 |
| Ethereum Classic | 1,45 | 40 | x27 |
| Lisk | 0,15 | 16,64 | x110 |
| ZCash | 48,53 | 598 | x12 |
| Waves | 0,244 | 15,72 | x64 |
| Stratis | 0,071 | 12,73 | x179 |
| BitShares | 0,004 | 0,44 | x110 |
| Ardor | 0,01 | 1,11 | x111 |
At first glance, Bitcoin’s performance looks quite modest: from the above list, in terms of profitability for 2017, it was only able to overtake ZCash. However, you should not take this as a reason to refuse to buy bitcoins. The coin is firmly established as the underlying asset for trading and storing value in the cryptocurrency world, so demand for it will remain consistently high. The first cryptocurrency futures contracts were created specifically for Bitcoin, and there is no doubt that this currency will remain dominant in the world of blockchain.
However, it cannot be denied that altcoins became the main drivers of cryptocurrency growth in 2017. If at the beginning of the year the capitalization of Bitcoin was almost 87% of the value of all coins on the market, then after 12 months this figure dropped to 50%.
The highest growth among coins from the TOP 15 was shown by platforms for creating tokens and applications based on blockchain technology. The pioneer in this field was the distributed virtual machine Ethereum, the rate of which increased 96 times. The growth leader was its Chinese counterpart NEO, whose value increased by more than 500 times.
Currencies created solely for settlements showed less growth. This was probably influenced by the lack of interest on the part of large companies and states: Monero and ZCash coins serve mainly the shadow sector. Litecoin showed higher profitability: in fact, it is a direct analogue of Bitcoin, but supports Segwit transaction acceleration technology.
The Ripple cryptocurrency stands apart. Despite the constant reproaches of the community for insufficient decentralization, it was able to make its way into the corporate segment and showed good growth. Large banking structures, such as Mitsubishi UFG and American Express, announced the start of using Ripple to service their IT infrastructure.
For every $1 invested equally in the 15 listed cryptocurrencies, the investor would receive $121 after one year. It should be noted that 2017 turned out to be an extremely successful year for most coins. The market recovered from the fall of the end of 2013, and money from private investors poured into crypto exchanges in a rapid flow. The positive news background also contributed to the increase in capitalization. The names of large companies investing in the development of blockchain technology began to appear in media reports, and government officials and politicians began to talk seriously about the development of the digital economy.
It is noteworthy that the growth of cryptocurrency was not smooth. Several large waves are clearly visible on the chart of Ethereum and many other altcoins, the most powerful of which occurred in the spring of 2017. Periods of rapid growth are inevitably followed by serious pullbacks - an important pattern that all novice investors should remember. Investments in cryptocurrency today can lead not only to enrichment, but also to the loss of a significant part of the funds in the short term.
Considering the above events, it is not worth projecting a 121-fold increase in cryptocurrencies for 2018. The cryptocurrency market capitalization is $634 billion, while at the beginning of the year it was measured in only hundreds of millions of dollars. In this regard, the coming months may bring a significant correction. Let's figure out how to act in such a situation.
If you look closely at the latest chart, it becomes obvious that the cryptocurrency is growing in fairly large and unpredictable leaps. Because of this, short-term traders tend to be at a disadvantage. Forecasting entry points and profit taking will always give a suboptimal result, so that the total profit will be significantly less than the profitability of the market as a whole. In addition, the trader loses money on exchange commissions and risks his own funds, since during active trading it is impossible to store funds in cold wallets. If the exchange closes due to financial problems, the coins could disappear forever, which has already happened with the infamous Mt.Gox.
In such a situation, the best option is long-term investment in cryptocurrency using the Buy&Hold strategy. The strategy is designed for a period from several months to several years, with the most common investment period being 1 – 2 years. The essence of Buy&Hold comes down to purchasing a portfolio of cryptocurrencies and calmly waiting for their value to grow without taking active actions. As a rule, Buy&Hold goals are determined by one of two possible criteria:
Buy&Hold relieves the trader of the need to constantly monitor rates and charts: it is enough to check the data on the website coinmarketcap.com once a day, and if the desired price is reached, sell the cryptocurrency. If the purpose of the sale is determined based on a time limit, the investor may completely “forget” about his purchases before the planned date. The main thing in this case is not to forget passwords and not to lose key files for accessing coins.
In addition, the absence of the need for regular transactions allows you to store cryptocurrency in cold wallets and not be afraid of financial problems on crypto exchanges. The investor becomes the full owner of his coins.
During 2017, the total capitalization of cryptocurrencies increased several hundred times. Such growth may indicate both an initial underestimation of blockchain technology and a possible overbought of assets. Despite many optimistic estimates, the factor of a possible fall in 2018 should not be discounted.
To mitigate the risk of a possible fall and get additional profit on subsequent growth, you can divide your capital in a 50/50 ratio and invest only one of these parts in cryptocurrencies. If the growth phase continues, the investor will receive a good profit, and in the event of a deep fall, he will be able to buy additional coins at favorable prices.
Despite certain periods of market declines, cryptocurrencies remain an attractive investment asset. Blockchain technology has attracted interest from large banks, corporations and governments, so in the long term the demand for cryptocurrency will continue to grow. Individual recessions will be compensated by new, more powerful waves of growth. Over the long term, the Buy&Hold strategy will be the most profitable for the investor.
However, you should not overestimate reviews of investments in cryptocurrency in 2017. Every month the market capitalization becomes more and more significant, which is why it gradually slows down its movement. For this reason, you should be smart about setting your investment goals and, if possible, leaving a small cushion of fiat money in case of a deep market correction.
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For some, investing in cryptocurrency is something out of science fiction, for others it is a profitable source of income.
While some people are thinking about where to invest their money, others are actively investing and winning big.
How to make money on cryptocurrency?
We will talk about the most effective methods in this article.
In addition, you will learn how risky such investments are, what results can be expected from them, and which currency is more profitable to invest in.
When it comes to the best investment vehicles, cryptocurrencies are always mentioned. Why are they attractive?
The success of investing in cryptocurrency depends on the right choice of digital money. Here it is important to use a profitable cryptocurrency that will not lead you to losses. When choosing, consider the following factors:
Many modern cryptocurrencies have these characteristics. The most common investment option is, of course, Bitcoin.
This is the most valuable cryptocurrency for investors. It has been around for 10 years and has already become a definite standard for alternative money transfers, surpassing all other cryptocurrencies.
Bitcoins are secure, mobile and popular. In recent years, their value has increased significantly, as can be seen in the graph.
Cryptocurrency exchange on CEX.IO
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Let's take a closer look at the pros and cons of investing using Bitcoin as an example:
| pros | Minuses |
|---|---|
| Stable and very fast growth of cryptocurrency | Problems with network scaling, high fees, freezing of transactions in the network |
| High level of community trust, largest capitalization and number of users | Interest from government regulators in cryptocurrency is also growing. and in some countries it is already prohibited by law |
| Liquidity, various options for buying/selling cryptocurrency and even purchasing goods with Bitcoin | The excessively sharp rise in the exchange rate raises concerns that it may also collapse sharply. |
| Savings tool - instability and inflation of fiat currencies further provoke demand for Bitcoin, the issue of which is limited to 21 million coins - no more, no less | |
| Lack of government regulation, decentralization and pseudo-anonymity |
To see the full list of cryptocurrency capitalization, check out our rating of currencies.
Select one or more cryptocurrencies that you will work with. The payback period and the amount of income depend on this.
Allocate funds for investments. You need an amount for initial investment and further support of investment activities.
Buy cryptocurrency. Wait for the right time to purchase digital money at the minimum rate. Buy currencies on declines.
Before you invest in Bitcoin or other cryptocurrencies, you need to understand the risks involved. Some users consider cryptocurrency to be the next “MMM” or so-called “bubble”. Despite constant talk about it, cryptocurrency continues to exist and actively develop for many years.
Such money is not backed by anything other than a limited issue and the faith of the community. But until the government passes regulatory laws, investing in cryptocurrency is a profitable business.
There is a risk of losing your investment due to a sharp decline in the value of cryptocurrency. Here, much depends on the investor’s foresight and his ability not to panic.
Many countries have not adopted rules governing the circulation of cryptocurrency. You will not be able to pay taxes on your income. In addition, there are countries where digital money is prohibited.
Despite some risks, many advanced users are interested in investing in cryptocurrency. This is a great chance to make good money. Use it while you can.
