I know by now you’ve heard of Bitcoin, and if not, stop reading right here and go watch a Youtube video. However, If you’re familiar with cryptocurrencies, but you haven’t decided whether or not you want to invest, continue reading. I’ll give you five reasons why you should hop on the bandwaggon and why it’s not too late to turn a profit.
Let’s first define what Cryptocurrency is. The official definition is, a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently or a central bank. There are hundreds of these currencies and what makes them so popular is the idea/promise of decentralization, transferring money without the use of a centralized banking system, like The Federal Reserve here in the United States.
My husband and I invested a small amount into cryptocurrencies in the early part of 2017 and by the beginning of 2018, our investment has more than tripled. My husband is the mastermind behind our investment and handles every aspect of our system. I asked him to give me 5 reasons he’d share with someone that was interested in investing to convince them.
1. Do Your Own Research
There are plenty of articles on the internet, in newspapers, and on forums like Reddit, with information about cryptography, currencies, and the platforms used to invest like Coinbase. There are also plenty of YouTube videos and blog posts, like this one, that help break down this new technology in easy to understand terms. Geesh suggests reading the “white papers,” although no one does, on coins that you’re interested in. These papers explain why the coin was invented and how your investment will help the company implement their idea into the real world.
2. Choose a Coin with Real World Investment
When doing your research, look for ICO’s, Initial Coin Offerings, that do two things: interest you and will have an impact on the way we conduct business. For example, alt-coin Walton, has a plan to implement RFID’s to reinvent how we track products and goods from the source to the consumer. RFID’s aren’t a new technology, see locator chips in pets, but they way in which this company wants to use that technology is what will enhance the world around us. In my opinion.
3. Invest What You’re Willing to Lose
Please do NOT invest your entire life savings into cryptocurrencies. Just like any other investment platform, there is a risk of scam and the possibility of failed investments. Be a smart investor and only put in what you can afford to lose. See step #1. If $5 is all you’re willing to invest then invest that. Do not feel pressured to invest thousands in hopes to gains millions, it does not work that way. Slow and steady won the race.
4. Buy Low/Sell High
Geesh says, the key to turning a profit in the crypto market is buying in when the price is relatively low and selling at a high price point. Same as the New York Stock Exchange (NYSE). These points will be different for everyone, but the goal is to make a profit. For example, an altcoin is worth $.10 cents per coin today and you invest $100, you will have a total of 1000 shares of this coin. If this coin rises in value to $.20 cents per coin, you’ve made a profit of $100. Your shares will remain the same. Now if that same coin goes up to $1, and you bought in at $.10, you now have $1000. You’ve made a $900 profit.
Patience is key in the Bitcoin/Alt Coin world. Once you’ve completed steps 1-4, this step is most important because the market is very volatile. Things change in a matter of SECONDS. Literally, one minute the price of your coin can be at $.05 cents and the next it could be worth $1. If this is a coin you’ve chosen for its real-world value, hold on to it. Short term gains are exciting and can make you lots of money, but the objective is to earn wealth and wealth is a long-term game. Take Bitcoin, for example, people who bought into Bitcoin in its early days are reaping million dollar gains today. Your coin may never see $10,000 per coin, but depending on your initial investment you can still have a great payday if you hold.
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If you choose to sell your coins and turn them into USD or US Dollars, they are subject to taxes as they be considered either property or investment gains. The laws are still new and so these regulations are still being worked out. However, you are responsible for keeping track of your earning/selling of any coin and paying the taxes on that money. Right now, the tax percentage is at 20 percent.
Keep in mind, whatever you sell in 2018, will be claimed and paid on the 2018 tax return you file in 2019.
I find crypto currencies to be very exciting especially thinking about the future. This new technology, like anything new, has come under a lot of scrutiny. Especially with Bitcoin falling from $20,000 in December to $8,000 since the beginning of the year. As long as you do the proper research and make decisions for yourself you will be fine. If you’re interested and would like more information let me know! We’re happy to dive deeper in the Crypto conversation.
Peace + Love.