Since its introduction in 2009, the financial world has been discussing the opportunities and risks of Bitcoin. In the meantime, digital currencies have developed from a marginal phenomenon and a speculative object for outsiders to a serious factor in the financial market.
In the recent past, Bitcoin has seen immense increases in value, but has suffered almost as large losses in value. So the question arises whether Bitcoin and Co. have the potential to secure a reliable place on the financial market and thus also offer an investment alternative for newcomers and smaller investors. Investing in cryptocurrencies in three stepsStep 1: Open an account on the eToro trading platform
Before you can invest in cryptocurrencies, the first step is to open an account with a crypto trading platform.
Our choice fell on eToro. Opening an account here is very easy and doesn’t even require verification if you’re trading up to $2,000.
In addition, the bidder is regulated by the state and is therefore subject to deposit protection.
To open an account, simply enter your personal details in the registration form on the home page.
67% of retail investor accounts lose money when trading CFDs from this provider. Step 2: Deposit
You will receive an email from eToro with a link that you need to confirm. Then you are ready to buy cryptocurrencies.
To deposit your trading account with real money, you need to click on the “Deposit Money” button at the bottom left. A window will open where you can select the desired payment method, e.B. Sofortüberweisung.
Depending on the method chosen, you can now make the payment and replenish your trading account. Step 3: Invest in cryptocurrencies
If the deposit was successful, the new account balance will now be displayed at the bottom of the screen.
This will allow you to buy the cryptocurrency you want, in this case real cryptocurrencies or cryptocurrency CFDs. The easiest way to find cryptocurrencies is to type and find them in the search box.
You can now make the desired settings in the shopping area. Here you also indicate the number of euros you want to invest in cryptocurrencies.
If you prefer to trade cryptocurrency CFDs instead of real cryptocurrency CFDs, you can also find them in the search box. But here’s our advice: CFDs are more suitable for experienced traders, as the risk of loss is much higher.
67% of retail investor accounts lose money when trading CFDs from this provider.
From nerd currency to international means of payment: The original idea of a cryptographic currency goes back to Satoshi Nakamoto and a white paper written by him. Since the name is a pseudonym, it is not yet clear whether an individual or a team of programmers is behind the development of the idea.
The first 50 cryptocurrencies were “created” in January 2009, the Bitcoin is considered the oldest digital currency worldwide. To date, the cryptocurrency has the highest market capitalization as well as the largest trading volume of all Internet currencies.
Meanwhile, however, more than 2,100 more Internet currencies have developed (as of March 2019) with an estimated total market capitalization of about $131 billion. In addition to Bitcoin (BTC, XBT), the best-known coins or tokens include, for example:
- Ethereum or Ether (ETH)
- Ripple (XRP)
- EOS (EOS)
- Litecoin (LTC)
- Bitcoin Cash (BCH)
- Tether (USDT)
Today, they are regarded as an established and widely accepted means of payment.
The most spectacular time of the Internet currency are the years 2016 and 2017, in which the Bitcoin was able to record immense increases in value, which amounted to up to 2,000 percent. At the end of 2017, a single Bitcoin cost almost $20,000 per Bitcoin.
However, the already turbulent stock market year 2018 as well as ongoing discussions regarding the security of crypto currencies ensured that the Bitcoin price continued to fall and the currency was valued at only 3,900 US dollars per coin in November 2018.
Since then, there have been less extensive fluctuations in value, so that the Bitcoin price is considered relatively stable by many financial experts at the beginning of 2019. How Cryptocurrencies Work
The basis of Bitcoin is the so-called blockchain, an open source software that works with a continuously expandable list of tamper-proof data records. They are connected in the form of successive blocks to form complex data sequence sequences, making them almost tamper-proof.
A special feature of the technology is that Bitcoins are not generated centrally, but decentrally with the help of a network. Since a total of a maximum of 21 million coins can be mined and the so-called Bitcoin mining requires high computing power, a value stability is guaranteed, which protects the Bitcoin both from counterfeiting and from excessive inflation.
However, the anonymity resulting from the decentralization of the blockchain and the lack of a central supervisory and regulatory authority also gives reason to believe that cryptocurrencies are also used for opaque and illegal transactions.
Nevertheless, a steadily increasing number of companies accept Bitcoin and Co. as a means of payment.Why invest in crypto currencies?
In addition to purely financial reasons, there are a variety of other reasons why people invest in cryptocurrencies. In this section, we have compiled a small selection of the most popular reasons why people are increasingly venturing into the crypto exchange or crypto broker in 2021.
- Use it more practically: Cryptocurrencies can be shipped within seconds at minimal transaction costs. Popular cryptocurrencies such as Bitcoin are accepted all over the world and are already considered an effective means of payment in many places.
- Anonymity: Our digital footprint is getting bigger and bigger. Man in the 21st century is more transparent than ever before. Digital currencies provide a little remedy because the transaction between two parties does not have to be settled by a third instance such as a bank.
- Support for the decentralized financial system: Not only since the Global Economic Crisis , many people have been of the opinion that the traditional banking system is no longer up-to-date. Digital currencies are completely independent of central banks, which is actively supported by many people.
- Profitability: If you look at the rise of Bitcoin , you will quickly see how profitable some digital currencies have already become today. Anyone who enters the trade on time can hope for a multiple of the investment.
Investing in cryptocurrencies: latest updates
For people planning a long-term investment in cryptocurrencies, it is important to also observe the overall development of the market. That’s why we summarize some important current news and news on the subject of crypto investments here:Update from 19.05.2022: Does only the DeFi-Coin defy the crypto crash?
The DeFi coin DEFC, which was already listed a little more than a year ago on 10.05.2021, experienced renewed optimism despite the rather bearish environment on the crypto market. This was triggered by the announcement of the publication of the long-planned decentralized crypto exchange. In this context, even the all-time high could be broken for a short time.
Since then, the share price has been in a consolidation phase around 40% below the opening price. The plans for 2022 continue to look promising. In addition to planned listings on Binance and Crypto.com, there are also upcoming publications that could have a positive effect on the price.