By now, you’ve undoubtedly heard about Bitcoin and other cryptocurrencies thanks to a sudden gold rush that seems to be happening in the space. Of course, such mania spreads exponentially, with more and more investors coming aboard with each passing day. But, when it comes to crypto, there’s a lot more at play than most investments. In fact, it feels like most of us need a crash course in cryptocurrency just to understand what terms like “blockchain” even mean. With that in mind, outside of those basics, here are three things to know before investing in Bitcoin:
Volatility is the name of the game
Headlines boasting enormous new highs for Bitcoin have certainly served to get the public’s attention and create a surge of interest in cryptocurrency. Unfortunately, they’ve also led some to jump head first into an investment they actually know very little about. Some anecdotes even suggest people have mortgaged their homes in order to buy into Bitcoin. Needless to say, this is a major mistake.
Although it’s true that Bitcoin and other cryptocurrencies have been experiencing massive jumps, they’ve also seen large pullbacks as of late, as well as crashes in the past. This is a type of volatility that few investors are truly prepared for. So while it’s good advice to never invest anything you can’t afford to lose, this is especially true when it comes to cryptocurrencies.
There’s more than Bitcoin
In the minds of many, “Bitcoin” and “cryptocurrency” are practically synonymous. There’s good reason for that considering Bitcoin was the first and is the largest of crypto coins. However, it’s far from the only one. Depending on whom you talk to, the real coin to watch could be Ether (Ethereum), Litecoin, a Bitcoin fork like Bitcoin Cash, or some other coin entirely—perhaps one that has yet to even debut. Therefore, if you’re serious about investing in crypto, it may be worth looking into other currencies beyond Bitcoin.
You can invest in crypto without investing in currency
One thing many investors overlook is that there are now opportunities in cryptocurrencies outside of the coins themselves. Silicon Valley seems to be catching onto that; there’s been a rush by venture capital firms to fund startups that will help make crypto accessible to the masses (or at least the institutions).
Meanwhile, the CBOE recently began offering Bitcoin futures, with CME and Nasdaq to follow. As a result, there are already ways to bet on the promise of cryptocurrencies without owning coin. And there will likely be many more ways in the coming months.
There’s no doubt that cryptocurrency will have an effect on technology and economics in the future—even if the size of those impacts is up for debate. Because of this, there are reasons to be excited about the space and want to invest. That said, instead of getting carried away with the hype, be sure to take the time to understand Bitcoin and other cryptocurrencies, contemplate the risk, and perhaps even pursue indirect investments before buying your first coins.
DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation in writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.
2 questions college students should ask regarding credit cards
Facebook user data policy: What you need to know
Are you an entrepreneur? Top tips on budgeting and funding options for your business
4 profitable online business ideas
Interest rates surge; Iran nuclear deal intensifies global tension
Investing in stamps: A global hobby and investment
Put your money on this Daily Fantasy Sports company ahead of Soccer World Cup 2018 in Russia
Daily Fantasy Sports leader positions to take FIFA World Cup 2018 by storm
Exponential, Inc. founder, Dom Einhorn, thinks charitable fundraising is ripe for disruption
Why courtesy on social media pays off
Promoting women’s football in Malta by UEFA projects
Euro NCAP marks its 20th anniversary with two crash tests
European Parliament’s International Trade Committee backs CETA
The American Heart Association has released four new PSAs
PwC presents 20th global CEO survey results in Switzerland
Crypto5 days ago
Cannabis-crypto combo: Melding two disruptive industries
Featured5 days ago
How investors can use ESG metrics as great risk management tools
Featured5 days ago
Should you pay taxes using your credit card?
Featured5 days ago
5 things you need to know about the world’s billionaires club
Base Metals5 days ago
US’ exit from nuclear deal to curtail Iran’s steel expansion goal
Agriculture4 days ago
Orange juice continues rally; Palm oil moves up in weekly charts
Crypto4 days ago
Bitcoin security: Your new investment concern
Corporate Social Responsibility23 hours ago
Mohawk Group eyes LEED and WELL Building Standard certificates with new showroom