The viability of investing in cryptocurrencies has been one of the most diverse topics of conversation within the financial industry since the Financial Crisis. With so many options, pitfalls, risks and perceived barriers to entry is it possible that you could be missing out whilst listening to the noise created in the market? Whether it is Bitcoin, Bitconnect, Litecoin, RIPO, Ethereum, NEO or one of the hundreds of other coins that are now on the market, the concept of all these digital currencies remains the same. There is a set limit amount of coins available to investors for a period of time.
Motivating Factors for Purchases of Cryptocurrencies
1. Market Speculation
Investors analyze cryptocurrency in the same manner in which equities traders invest in stocks. They analyze their current standing in the market, the potential down side risk as well as growth and determine their decision based on facts as well as market sentiment. For example, an investor sees the historical growth of Bitcoin and concludes that it is too late to invest to see the best returns; one may decide to find ‘the next bitcoin’. Investing in a number of alternative cryptocurrencies in which they see potential with even a small investment could generate tremendous returns.
2. Transactional Cost Saving
Exchanging currency is much easier to achieve in the cryptocurrencies markets than through a private bank, also the cost is considerably lower.
3. Geo Political
For those who disagree with centralized currency, investing in cryptocurrency allows them the freedom to not partake in a financial system they may disagree with. Within each cryptocurrency there are a set number of coins available to investors, which means there are no inflation rates and no constant creation of new currency without a cap.
How to Purchase Cryptocurrency
After doing your research on which cryptocurrency you would like to purchase, you can place a bid to buy at a certain price or at the market price. You will also indicate which public key you want your currency to go into. Providers such as coin base provide a market place for a variety of cryptocurrencies.
A public key is your virtual holding account, providing an end destination for your purchase. You also will have a private key, which is encrypted and protects your currency held in your holding account within your ‘wallet’. This key is decrypted only at the moment where a transaction occurs. You can place your cryptocurrency on a specially encrypted USB, on your desktop or store it online in an E-Wallet.
Cryptocurrencies to Explore
- Bitcoin – Currently trading at $4300 per coin
- Ethereum – Currently trading at $300 per coin.
- Bitconnect – Currently trading at $116.56
- Litecoin – Currently trading at $44.49 per coin
- Waves – Currently trading at $4.74
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