Investing in cryptocurrency: It’s no secret that cryptocurrencies can experience a huge increase in value within a short period of time.
It’s not that cryptocurrencies start with a huge increase in value right away, but it’s likely that most of them will start with an increase in value in the coming years.
So if you are interested in crypto currencies with potential, you will have a very good chance of generating good profit.
In times of rising inflation and economic crises, investors are looking for safe havens. After investments with which they can survive difficult times and secure their savings. For many, this was previously precious metal such as gold or silver.
But now cryptocurrencies are moving into the focus of investors. Especially the best cryptocurrencies, such as Bitcoin, Ethereum, Ripple, Cardano and Poldakot.
For other investors, it’s less about protecting their assets and more about increasing them.
Bitcoin and other crypto currencies are also suitable for this.
Investing in cryptocurrency promises fast, high profits thanks to the high volatility of digital currencies.
With this volatility comes a certain risk. Behind every “Bitcoin millionaire” are thousands of people who have simply gambled away. Too greedy, fell for scams, invested at the wrong time and sold again.
Financial security and high profits are not so easy to have. Nevertheless, investing in cryptocurrency offers many opportunities – especially for non-institutional investors who do not shy away from a certain risk.
In this article, I’ll take a closer look at the opportunities and strategies.
Institutional investors are increasingly buying Bitcoin
More and more institutional investors want to invest in Bitcoin. For a long time, cryptocurrencies were considered a pure nerd thing, for Internet crazy people, programmers and criminals. But in the meantime, stock and fund owners have also recognized the value of cryptocurrencies such as Bitcoin.
Even Der Spiegel reports on it: What you can learn from the Bitcoin billionaire
At first, Bitcoin and other cryptocurrencies were ignored, then ridiculed and next brought into disrepute. With every major price slump, the long-established bankers declare Bitcoin dead – only to watch Bitcoin climb the next price heights.
Meanwhile, more and more traditional investors are considering investing in cryptocurrencies. You have seen how well Bitcoin and other Cryptos have performed over the last decade and want to get in.
New offerings make it easy for institutional investors to invest in Bitcoin and other cryptocurrencies. Crypto derivatives, Bitcoin futures, crypto options and ETFs allow investors to make money with Bitcoin in the usual way.
This was previously the hurdle that deterred many institutional investors.
The crypto market was considered too insecure for them or was simply foreign to them. There was also a lack of regulation. Increasingly, crypto currencies are traded over-the-counter (OTC) or as futures and ETFs on crypto trading platforms.
Primarily large investors benefit from this. Ultimately, however, the entire market benefits from this.
Institutional investors are flushing new capital into the market and thus increasing the potential for rising prices.
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Bitcoin and Co. offer high earnings opportunities
In recent years, Bitcoin and the other cryptocurrencies have gone up and down. However, if you look at the Bitcoin price development as a whole, you will notice that this asset class has developed positively like no other.
When the first Bitcoins were created, the price of a BTC was just less than a cent. In the meantime, we have arrived at prices around 60,000 US dollars. In 2021, Bitcoin reached one all-time high after another.
Bitcoin has performed best of any asset class in the last decade. It has performed better than stocks, bonds, commodities or major currencies. A big advantage of Bitcoin: This asset class hardly correlates with the traditional market.
Even though there have been occasional correlations, as in the last crash, Bitcoin always manages to decouple from the markets and perform better than the other asset classes.
It is not uncommon for the Bitcoin price to rise or fall by several percentage points within a week. This volatility is what can make investing in cryptocurrencies so attractive as a return-on property.
For Bitcoin itself, another aspect also speaks: The supply of BTC is becoming increasingly scarce. Bitcoin is deflationary, the amount of BTC is rising more and more slowly, while demand continues to rise.
In this regard, investing in Bitcoin is similar to investing in gold. It protects itself against the general fall in prices and the weakening purchasing power of fiat currencies.
Due to the high volatility, the crypto currencies are also suitable for day trading. E.B. with a trading bot (here is a trading bots list).
If you want to learn more about Bitcoin and the other crypto currencies, I recommend the film #cryptopiafilm!
Articles worth reading: Crypto Savings Plan and Coindex Experiences
Bitcoin and Co. carry a certain risk of loss
The high volatility of cryptocurrencies not only brings advantages, but also the risk of losing one’s own investment. Only those who are aware of the risks should invest in Bitcoin.
Just as Bitcoin and other cryptocurrencies can rise by several percentage points one day, they can fall again the next day. HODLers, however, know: Losses can only be realized if you sell the crypto currencies again.
(HODL: in the crypto scene established term for “hold”, as a letter turner derived from the English “to hold”)
When it comes to earning money with Bitcoin, patience and calm nerves are therefore required. Experienced crypto traders see falling prices as more of an opportunity to increase their own balance. It is often the newcomers among the investors who do not know the ups and downs of the prices and sell in panic.
However, the risk can never be completely eliminated. This is especially true for the many altcoins. Some of them may turn out to be a profitable investment. Other projects fizzle out, still others turn out to be scams.
Newcomers are therefore well advised to first focus on Bitcoin and the other top 10 or top 20 cryptocurrencies when investing in cryptocurrencies. They have already firmly established themselves and proven their status as a worthwhile investment.
Cryptocurrencies are also tradable for retail and private investors
Even though institutional investors are penetrating further and further into the market, investing in cryptocurrency as an investment is still suitable for small and private investors. This is due to the low entry hurdles of the crypto market.
And unlike many conventional forms of investment, the return can be quite considerable.
The first step for private investors is, of course, to have personal finances under control, e.B. with an asset statement with Excel. After that, you can invest in cryptocurrency.
You don’t have to be familiar with the crypto exchanges to earn Bitcoins. You don’t need a separate account at a bank or you don’t have to be a broker. All you need is internet access and start-up capital.
The start-up capital does not even have to be particularly large. Theoretically, you could start with 10 euros, although that would not be so wise with the usual fees. 100 euros, 500 euros, 1000 euros, you decide how much you want to invest.
Thus, crypto currencies offer you the opportunity to earn something as a private investor.
People who would otherwise be closed to the stock markets and would only be dependent on their bread and butter job can thus invest and build up a passive income.
While retail investors should keep in mind that cryptocurrency taxes are usually due, there are crypto tax tools to later prepare the profits and losses for the tax return.
Coindex from Bielefeld allows you to invest your money in a crypto-index-based portfolio. Coindex manages the portfolio and weights the cryptocurrencies in it.
At the moment, 12 cryptocurrencies are included. Perfect for beginners!