Can You Still Invest in Bitcoin Long Term?
This year so far, Bitcoin and all the major digital currencies have seen a sea of red, just drops everywhere. Part of it is the post holiday trauma. You know, after everyone spends so much and rack up their credit card bills during the holidays.
Now comes the time to pay those credit debts off. Tax refunds are not in effect yet so that money has to come from somewhere right? Fear and uncertainty are other factors at play. Your average investor gets so much anxiety when prices in the Market suddenly start dropping, even just a little bit.
Still many people are very skeptical about Bitcoin and cryptocurrency altogether. I personally haven’t invested in Bitcoin, but I did invest in the smaller coins which have seen a 4X return on average since I bought in 2-3 months ago. I’m not planning to sell anytime soon, quite the opposite. And now that prices are dropping, I’m looking to buy more coins.
So is it worth it? I think so, and here are 3 reasons why:
Bitcoin Has Already Been Validated
Perhaps prices and value will have some speculations, but to say that it’s all speculation would be false. Until last year when the world really took notice of Bitcoin, many have said “Well it’s all hear say; there’s little to no value here.”
That is until traditional banks started buying into the hype, and big retailers like Amazon and even Craigslist started implementing Bitcoin as a form of payment. People are buying cars and homes using Bitcoin. I even heard of a new Airbnb called Crypto Cribs that allows people to rent their homes in exchange for Bitcoin.
What more social proof could we possibly need? It’s only a matter of time before the masses adopt the use digital currency as a form of payment.
Next: Ethereum, Litecoin And Other Smaller Coins
I’ll admit that I missed the Bitcoin train. I could have made so much money if I invested 5 years ago. Instead I bought two new cars that I later sold for half the price. But all isn’t lost. There are other coins to consider beyond Bitcoin. Ethereum and Litecoin are two other major currencies that worth a look at.
Ethereum has already doubled in value in the last 60 days, so has Litecoin. I bought some Litecoin when the price was around $99. I’ve watched it grow past $300 in value and then dropped back to $180 (which is the current price at the time of this article). Have I panicked and sold off because of the drop? Of course not. I took a leap of faith and bought even more smaller coins, namely Digibyte, Dogecoin, Stratis and a few others which I recommended below.
Calculate Your Risk
Unlike your traditional stock market that has track records and profit reports, digital currency is still fairly new and will take some time before more products and services are built around it. But just like you would do your research to trade in the stock market, you must do the same when you invest in cryptocurrency.
Don’t just invest based on pure speculation or because everyone is talking about it, instead educate yourself about the coin first and the technology behind it. Every coin has a product or technology that it is built on. Here are some of the questions to ask when looking at a coin
- What product or industry is this coin representing?
- How long has the coin been in the market?
- What’s the supply rate and what’s the demand rate?
- What are people saying about the coin?
- Looking at the price graph, what’s been the trend? Is it steadily up or down? Or is it all over the place?
Those are just a few questions to answer before investing in any coins. You can use the free graph at Coinmarketcap to look at prices.
This was a guest post from Mike at the Income Driver. We obviously have already made our own investments in the cryptocurrency space, and have been following the markets and tech closely since then.
The January sell off has certainly given us pause, but we are generally bullish on the future of digital tokens. There is a lot of speculation and questionable behavior driving prices up and down currently, but as the products and markets mature, more rational valuations will eventually take over.
If you liked this guest post, check out this one from our friend Robbie at the Stock Street Blog. And if you are interested in sharing your own guest post or partnering up, get in touch via email or twitter!
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