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How to Start Your Investment Portfolio: Is the Crypto Space the Place to Invest?

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The idea of investing for the average person can often seem like a daunting prospect. Many people may be put off by the idea of investing their hard-earned cash, let alone what they should invest in. Not only that, but the rise in digital currencies such as Bitcoin and Ethereum is further adding confusion as to whether this is a good place to start an investment portfolio.

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Yet, it doesn’t have to be that way.

The beginning of 2017 has proved an incredible start for Bitcoin. In March it increased to a high of $1,350 prior to the Securities and Exchange Commission’s (SEC) decision on the first Bitcoin exchange-traded fund (ETF). However, as March ends, Bitcoin’s price is hovering under the $1,000 mark, according to CoinMarketCap, triggered by the SEC’s rejection of the ETF and investor selling as continued talks about a potential Bitcoin hardfork circulate.

But, even though the currency is susceptible to fluctuating prices, some may still consider it a viable asset for investment. Yet, despite excited proclamations by Bobby Lee, BTCC’s co-founder and CEO, tweeting a bitcoin price prediction of between $5,000 and $11,000 by 2020, investing in Bitcoin is not for the faint hearted. Knowing when to buy is crucial as you will want to buy low and then sell high, but be prepared for massive swings in value.

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Speaking to Hacked, David Motta, Internet entrepreneur, investor and CEO of business consulting firm, ACQURE Business Solutions, thinks that the cryptocurrency space can be extremely profitable.

“I believe a revolution is underway and increasingly we will see new incredible developments involving the new currency and the blockchain technology in general,” he said.

However, while it may be too late to see any significant returns with Bitcoin, Motta says there are other coins on the market that are demonstrating promising movement and could, potentially, go the way that Bitcoin is.

For example, Ethereum, the second largest cryptocurrency after Bitcoin, with a market value of $4.2 billion is just shy of $50 for one Ether, significantly cheaper than Bitcoin, but growing day by day.

Whereas, Dash, the third largest cryptocurrency at a market value of $746 million, is currently valued around $104. Not bad, considering at the beginning of March its price was hovering closer to $44 and two months before it was listed around $8.

When to Start Investing

Phil Town, investment advisor, hedge fund manager and author of two New York Times best-selling investment books, Rule #1 and Payback Time, says it’s never too late to start investing, which can certainly be applied to the crypto space.

Considering its relatively short lifespan, new investors may only be just discovering cryptocurrencies and the possible benefits it can provide, which can pose the risk of knowing what to look out for.

As there are hundreds of altcoins available waiting for you to swap your fiat money for the cryptocurrency, Motta recommends that you ‘become a sponge and learn as much as possible about the space.’

“Since it’s so new, it’s very easy to believe in promises made by not so reputable companies due to lack of knowhow or having nothing else to compare to,” he said.

He adds that if there are any digital coins you’re thinking of investing in, you should read their whitepaper to understand what exactly they are doing and what they plan to do with your money.

Some questions he says you should consider are:

  • How do they plan to create rapid consumer adoption?
  • What’s their technology like?
  • How did their Initial Coin Offering (ICO) go?
  • Did they follow the right steps and use a public escrow?
  • Are they utilizing a mining or staking process?

If you feel happy with what you’ve read in the whitepaper and are still happy to proceed, start small and only invest a small portion of your money. This will give you an idea as to how cryptocurrencies works, how to trade it and how to handle it safely in a wallet. Just because a cryptocurrency may be doing well now doesn’t mean that’s always the case. Proceed with caution and avoid investing large sums.

How to Buy It?

To buy cryptocurrency you do so via online exchanges and platforms. If you’re interested in bitcoin you can buy the currency in fractions or ‘bits’ instead of the whole bitcoin with investment starting as low as $10 on some exchanges.

A few beginner-friendly exchanges to consider include Coinbase, LocalBitcoins, Blockchain.info, and Bitstamp, which was the first regulated and licensed virtual currency exchange in the EU.

As bitcoin has a finite supply, which is capped at 21 million bitcoins, the system will stop producing new coins. Every four years the number of bitcoin halves with the cap expected to be reached by around 2140. However, it’s not known what impact this could have on the value of the currency.

However, in the whitepaper ‘Bitcoin: A Disruptive Currency,’ Chris Burniske of ARK Investment Management, which was the first public fund manager to invest in bitcoin, said:

Given its predictable growth and ultimate fixed supply, bitcoin could become a store of value superior to fiat currencies in the long term. The trajectory of bitcoin’s supply growth will not change, unless the economic majority agrees to it.

So Should You Invest?

Motta concludes by saying that the cryptocurrency space is still ‘very young’, but that it has ‘huge potential to grow.’

While bitcoin can’t be hacked (as far as we know), manipulated or changed, it’s still vulnerable through exchanges or digital wallets, like online bank accounts.

If you’re interested in the crypto space and are looking for a way to start your investment portfolio, doing so with cryptocurrency could be a viable option. As the saying goes, though, don’t put all your eggs in one basket; diversification is key.

Research the market, know what you’re getting into and don’t put your life savings into something that could potentially collapse just as easily as it started.

Featured image from Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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2 Comments

2 Comments

  1. mvppvm_07

    March 28, 2017 at 8:51 pm

    I agree that it’s crucial to ask appropriate questions. The ones mentioned are good. You want to do a follow-up article? Provide some answers to the questions you’ve put in the article. Offer the pros and cons to the answers to a targeted, but significant group of secondary currencies. (LITE, DASH, ETC, ETH). That will give some guidance regarding the kind of things to look for as answers to the questions asked. This would be helpful for those of us “sponging” toward success.
    Thnx.

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What’s Behind Cardano’s Rising Popularity in South Korea?

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Cardano, better known as ADA in South Korea, pronounced as “aeda” in the local market, is growing at an exponential rate due to UpBit.

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UpBit, South Korea’s second largest cryptocurrency exchange behind Bithumb, is operated by Dunamu, a subsidiary company of Kakao, the operating company of KakaoTalk and KakaoPay. The two mobile applications, KakaoTalk and KakaoPay, have a market penetration rate of over 90 percent in their respective markets–financial technology (fintech) and messaging.

Although UpBit remains as the only cryptocurrency exchange that has integrated Cardano within the local South Korean cryptocurrency exchange market as of date, the popularity of Cardano on UpBit is increasing rapidly. According to CoinMarketCap, 75 percent of Cardano’s daily trading volume is processed in South Korea, by UpBit.

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Within its debut month, more than 3 million South Korean users signed up to use KakaoPay, the country’s most widely utilized fintech app. KakaoPay operates as a mobile bank, allowing users to send and receive money, obtain loans, and conduct financial activities. KakaoPay supports UpBit because a subsidiary company of Kakao in Dunamu operates UpBit.

Given that Cardano is one of the most popular cryptocurrencies on UpBit in terms of daily trading volume, naturally, as general consumers in the traditional finance market using KakaoTalk and KakaoPay move to the cryptocurrency market, the first few cryptocurrencies they are introduced to are bitcoin, Ethereum, and Cardano.

Cardano is also receiving significantly more mainstream and local media coverage than other alternative cryptocurrencies, specifically because the South Korean media has portrayed Cardano as a direct competition to Ethereum. Because Cardano is a smart contracts protocol, it is structurally similar to Ethereum.

The two key differences between Cardano and Ethereum are that Cardano uses a proof-of-stake (PoS) consensus algorithm and it also has two layers that are used for smart contracts processing and payment settlement.

In South Korea, cryptocurrency mania has swept across most major industries. 5 out of 10 people on the streets, in subways, buses, and cafes talk about bitcoin, cryptocurrency, and blockchain technology on a regular basis. As such, the majority of investors are more technical than other regions.

Most investors of Ethereum in South Korea understand that the Ethereum Foundation and its open-source development team has been planning a PoS update via Casper. When Cardano debuted with a PoS protocol, it led South Korean investors to believe Cardano is a more innovative platform and has a technical edge over Ethereum.

January 31

For cryptocurrencies with strong followers in the South Korean market, January 31 is an important date to keep track. On January 31, local cryptocurrency exchanges are expected to open account registrations to new users and six major local banks are set to provide banking services to cryptocurrency exchanges.

Consequently, on January 31, it is likely that a massive amount of Korean won will flow into the local cryptocurrency exchange market. The recent cryptocurrency exchange ban fiasco, which turned out to be false, further increased the presence and popularity of cryptocurrencies in South Korea.

Cryptocurrencies like Cardano, EOS, Qtum, and Ethereum that have strong bases in South Korea will likely increase in value throughout late January and early February.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.4 stars on average, based on 3 rated postsJoseph Young is a finance and tech journalist based in Hong Kong. He has worked with leading media and news agencies in the technology and finance industries, offering exclusive content, interviews, insights and analysis of cryptocurrencies, innovative and futuristic technologies.




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Fidelity Investments is Mining Cryptocurrency

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Fidelity Investments is a multi-billion dollar brokerage  that just so happens to be mining cryptocurrency. In fact, it has been at it for three years, using its own computers to harvest bitcoin and Ethereum.

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Profitable Experiment

CEO Abby Johnson recently told Fortune that its U.S.-based mining operation is “making a lot of money.” This comes despite running a relatively modest operation.

Hadley Stern, Senior VP of Fidelity Labs, described his company’s venture as an “experiment.”

The real reason we began mining, and still do, is to learn how the network works, how consensus works, how difficulty levels work,” he said in reference to the mining process.

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The key to profitability has been the dramatic rise in cryptocurrency over the past year. Bitcoin and Ethereum are the world’s No. 1 and 2 cryptocurrencies by market capitalization, and no-one else comes close.

Well Ahead of the Pack

The fact that Fidelity has been at this for three years speaks volumes about the company. Other, much bigger players are still dipping their toes in the market, but are unsure about how to proceed. Goldman Sachs is reportedly on the fence about starting a cryptocurrency trading operation, while J.P. Morgan has already begun handling customer orders for bitcoin-based instruments.

Fidelity is doing a lot more than just mining tokens. Earlier this year, it reached an agreement with Coinbase to let customers view cryptocurrency prices alongside other assets on their Fidelity homepage.

Coinbase is the world’s most funded cryptocurrency exchange with more than 7.4 million users.

Cryptocurrency Prices

The cryptocurrency market ended the week on a firm note, with bitcoin (BTC/USD) reaching a session high of $4,425.00. At press time, the index was up 1.6% at $4,368.

Ether is also trading higher against the dollar, with the ETH/USD rallying more than 3% to $305.

Ripple (XRP) lost momentum on Friday, but still managed a weekly gain of 21%.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 166 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Chinese Government Eyeing Fresh Bitcoin Legislation?

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The Chinese government could roll out fresh cryptocurrency regulation in the coming months permitting licensed brokers to operate, based on recent information from Xinhua.

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The state-owned news publication recently revealed that the government is mostly concerned with stamping out illegal activity involving bitcoin and other cryptos. Government authorities could be planning to regulate the market by creating a licensing program with strict Know Your Customer (KYC) and Anti-Money Laundering (AML) systems.

The Case for AML

The need for KYC/AML protocols has long been raised by cryptocurrency proponents, especially in reference to initial coin offerings (ICOs). In response, the blockchain community has come together to create the Simple Agreement for Future Tokens (SAFT). The SAFT is both an instrument and open-source framework for token sales that vets accredited investors.

SAFT activity is quickly gaining traction, with the likes of Gizer recently issuing a presale of its ICO through SAFTLaunch.

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SAFT was officially created by Protocol Labs in close collaboration with AngelList and Cooley.

China’s Stance Looms Large for Cryptocurrency Market

Although digital assets have recovered from the China-induced flash crash of September, favorable regulations on the mainland could mean big business for bitcoin exchanges. Prior to the ban on ICOs and bitcoin brokers, Chinese investors were responsible for a quarter of all BTC trades.

According to Xinhua, China is likely to pursue a licensing program similar to Japan, a country that recently approved 11 cryptocurrency exchanges. CnLedger, a leading source of cryptocurrency news in China, recently had this to say:

“Xinhua News, official press agency of CN: Virtual currencies have become the top choices of underground economies. We shall adopt ‘0-tolerance policies’ towards crimes hidden underneath and take measures such as record-keeping, licensing, AML processes, real-name, limiting large transactions.”

Is China’s cryptocurrency ban temporary? It certainly looks that way. Regulators must already know that the ban hasn’t stopped mainland investors from buying cryptocurrencies next door in Hong Kong or Singapore. A saner approach to an all-out blanket ban is a tighter regulatory framework that will stamp out money laundering and other underground activities.

«Featured image from Shutterstock.»

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 166 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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