It may seem dangerous, especially after Bitcoin’s bubble burst just a few years ago, but the fact remains that cryptocurrency isn’t going anywhere and that means there’s still money to be made from it. There are over 2000 cryptocurrencies currently on the market, and yet most people have only heard of just a few. This means that with the right information, you can narrow down which coin is the best cryptocurrency to invest in and ultimately reap in the rewards.
Signs are pointing to a bull market over the course of 2019, which means that if you pick the right altcoin, you will likely stand to make money if you are investing this year. Even so, with such an array of coins available, you don’t want to go all-in on one coin only to miss the train and lose money. One of the quickest ways to protect your investment is to diversify the types of coins you are purchasing. This way, if there is a major downturn in one of your coins, you don’t lose too much money and can even start to convert it into a different coin you’re holding with enough notice.
You might be wondering how you even get to notice things before it gets too bad. One way to do this is by studying price graphs for historical trends. It’s a good idea to compare how coins do when Bitcoin overperforms or underperforms. Most medium-to-high profile cryptocurrencies have a correlation with Bitcoin, just like the bond market has some correlation to stock prices. If you see that one coin’s value increases substantially when Bitcoin’s value rises, it may be worth investing in that coin, as well. By the same token, you can protect yourself even more by investing in cryptocurrencies that perform well when Bitcoin’s price takes a dive, ensuring that you always have some liquidity on hand.
Another important component of investing in cryptocurrency is to understand what you’re investing in. Remember that, just like companies, cryptocurrencies have a function. For example, XLM, made by Stellar, is aimed at helping money move across borders more quickly. Ripple’s blockchain technology is also designed to expedite international payments, while BAT (basic attention tokens) are positioned to make a wave in the way that online sponsorship and advertising is handled. Understanding these functions is pivotal to you investing in a company that not only will make you money, but one that has a mission you care to support.
Beyond looking at price analysis graphs, one additional way to get a heads up in the cryptocurrency market is to keep abreast of any news in the financial, tech, and crypto industries. This concept goes along with the importance of understanding each crypto’s goal, as it can help you notice certain trends. For example, if you see that finding low-cost banking opportunities for underdeveloped or impoverished countries is becoming an issue that receives more airtime, you may want to move more of your investment into lumens, as these issues specifically relate to Stellar’s mission. You may also be able to ride small upticks in the news cycle by analyzing how prices change anytime a major news outlet releases a story about another cryptocurrency millionaire, as copycats are likely to come out of the woodwork when they see the success of others.
Whether you’re looking to make some extra cash to help finance your action figure collection or are looking to use crypto as another financial vehicle for retirement, having the right information is of the utmost importance. By looking at well-researched trading strategy guides, you can begin to gain your footing in the cryptocurrency market and start making money. Just like investing in any stock, cryptocurrency offers great rewards for those with high risk-aversion and an interest in technology.