What to Expect When Investing in Crypto Currencies

In the decade following the launch of Bitcoin, the world has seen an explosion in the popularity of cryptocurrencies and block chain dependent financial vehicles.

Fuelled by a continual move to web based and online resources, and growing confidence in the technology, uptake has begun to go mainstream.

So, as a new investor in crypto, what should you expect?

Crypto Currency Resources Online

All you need to know about cryptocurrencies is available online. You may want to read about Inside Bitcoin, one of many excellent magazine resources available.

Cryptocurrency advice is freely available online, but you should choose carefully and make sure that you are fully informed before you invest.

Much More Than Bitcoin

The first thing you are going to learn as you begin your crypto investment journey is that there is so much more than just Bitcoin.

about Inside Bitcoin

Bitcoin is the poster child of cryptocurrencies the first to get the public’s attention, it has subsequently become accepted in the mainstream.

But dig deeper and you will find that there are literally hundreds of crypto currencies online. Most use block chain technology and many are based on identical or nearly identical technologies.

They are all characterised by having a decentralised, peer-to-peer technology that proves to be the main attraction.

Although there are many, that does not mean they are all equal. Cryptocurrencies vary widely in their market acceptance and value.

A good start would be to familiarise yourself with the top 10 in circulation today.

High Volatility

If you are used to investing in stocks and shares, then you will be surprised by the crypto currency market.

Like the global foreign exchange market, cryptocurrencies are highly volatile, meaning that their price can fluctuate wildly.

Nervousness from investors, relative youth of the market and the decentralised nature of these currencies translates to very high price changes.

Take the Bitcoin price, which is currently fluctuating around the $10,000 mark, but that can change by $600 in a single day, and it has reached as much as $19,000 in the past.

This volatility attracts many inexperienced investors but can be a danger to those too hasty to spend their money.

Barrier to Entry

There are a few barriers to entry to investing in cryptocurrencies.

First, is the relative difficulty in purchasing them.

Although many brokers are now starting to offer a wider variety of alternative currencies, many are still not widespread.

If you are willing to stick to Bitcoin, then find a reputable online broker and buy your Bitcoin from there.

However, you purchase your Bitcoin, you are going to pay a premium to get them. Credit card purchases will incur significant fees.

The more esoteric the coin, then the further you are going to have to look to get your hands on them.

Stick to well-known and respected cryptocurrency brokers online.

De-Centralised but Not Unregulated

Just because online currencies like Bitcoin are de-centralised does not mean the tax man won’t want his cut.

Just like any investment, you will have to declare your assets, so take this into account with your financial and tax planning.


Comments are closed.