The digital currency market is growing rapidly: many of the investors have already invested in this segment and did not lose. However, some users doubt that this can bring at least some profit in the future.

However, who is not tempted by such a promising market: the price of bitcoin increases several dozen times a year. Regrets about missed opportunities can motivate you not to miss the chance to succeed today.

Why investing in cryptocurrency can be profitable?

In this article, we would like to objectively assess the situation and try to most accurately determine whether it is worth investing in this area. To do this, let's try to highlight the main advantages and disadvantages that every investor in the segment can face.

To be more specific, let's put the question as follows: what are the pros and cons of investing in Bitcoin?

Of the positive points, the following can be distinguished:

It is also impossible not to pay attention to the disadvantages of such investments:

However, we analyzed only a special case: a specific cryptocurrency and features of investments. But you can invest in other areas in this area. Let's take a look at the main investment opportunities in the market.

Investing in cryptocurrency: directions for investing money

There are four main ways to invest in this area. Let's take a look at each of them.

Investing in coins

We already mentioned this in the previous section. The most common and obvious way to invest money is to simply buy tokens. There are a great many of them on the market now, and you should not miscalculate with the choice.

In order not to make a mistake, users need to know exactly what is important to consider when choosing. There are three main criteria that will characterize the cryptocurrency:

• Market capitalization;
• Dynamics of growth and fall of the exchange rate;
• Product innovation and usefulness.

To purchase coins, you can use various services: or offer their services. It is better to store funds in secure wallets in order to protect them from hackers.

Investing in Cryptocurrency: Mining

Just a year ago, investing in mining could have become quite a profitable venture. There was even a period when it was impossible to buy a video card for use - the miners bought up all the goods in order to extract coins faster. However, today this kind of investment no longer seems to be the most profitable.

To provide yourself with good enough equipment for mining cryptocoins, you will need a significant investment: from one to a couple of thousand dollars. In order to recoup the investment, it will take 1-2 years. Not everyone is willing to wait that long to make a profit.

Another option, simpler, is cloud mining. The user can buy a certain amount of capacity from a third-party company. Profits from mining will go into your pocket. Here it is necessary not to miscalculate, so that the rent is not more expensive than the amount extracted.

How to invest in cryptocurrency: mining equipment development

Let's say right away that this option is suitable only for very wealthy investors: the amount of investments in this area starts from several hundred thousand dollars. And finding a suitable platform that accepts investors into its team is not so easy.

This case is rather special. However, for those who have the desire and means, you can try to find a suitable company.

Investments in blockchain projects

Another popular investment option is blockchain-based startups. Now there are a lot of projects that are looking for money for development. As a rule, they launch ICO - anyone can buy tokens for real money. In the future, if the startup grows into something more, the tokens will become more expensive and, thus, you will be able to earn more than you spent.

Often, tokens can be used to purchase additional bonuses within the service itself.
However, such investments can also be dangerous: if the startup does not take off, then you simply lose everything. That is why it is worth spending a lot of time studying the entire startup: from the idea to the development team.

Well, we have told you about the main ways to invest in the field of cryptocurrencies. Now let's figure out how exactly this should be done and which crypto coin to invest in in 2018.

How to invest in cryptocurrency: step by step instructions

When you have already decided to invest in this area, then you should learn the first (and most important) steps on the path of investing.

Choose the option you are interested in

The first thing you need to decide is in which of the areas in this area you would like to invest money. In the last section, we described all the directions that can be followed. The choice can mainly be influenced by the amount you have available.

If this is quite a lot of money, then you can think about investing in the development of software for mining cryptocoins. Smaller amounts can be invested in promising ICOs, or you can buy any coins on the market.

But remember that this market is not yet so stable: it is not worth investing money on which you need to live and feed your family. It is better to use "free" dividends.

Market analysis

After the choice is made, it is necessary to start studying the market itself. Moreover, this is an ongoing process - every day there is new information that needs to be learned. Be prepared to learn a lot of new materials: analytical, news articles, reviews, etc. You will need to understand how the cryptocurrency market works, delve into this knowledge, learn more and more nuances - without such work, you should not even think about starting investing in cryptocurrency.

Create a wallet for coins

Next, you should create your own wallet, which will store your savings. There are already many services for this: online banks, software for storing funds without the Internet, hardware wallets and many other varieties.

Buying tokens

If you decide to invest in a cryptocurrency or an ICO project, you will need to purchase the necessary coins. Which cryptocoin to invest in in 2018? To give a competent answer, you should carefully analyze the market.

After the choice is made, we go to the cryptocurrency exchange, online exchanger or any other service of this kind and buy cryptocurrency. When buying tokens in an ICO, you need to go directly to the startup website and make an investment there.

By the way, it is better to immediately transfer all savings to your wallets and not store them on external resources - no one has canceled the risk of hacking the site.

Investing in Cryptocurrency: Key Risks

You should not forget that this segment is still very young. And this creates certain risks. You can get rich just as quickly as you can lose all your investments.

The main risks include the following:

• Hacker attacks. Many cryptocurrency exchanges are attacked by intruders - some resources go bankrupt, and stolen funds are rarely returned to users in full;
• Pumps and dumps. Artificial price increase in this area is a fairly common occurrence. Since the legislation does not regulate the segment, such frauds are still legal;
• Due to market volatility, rates can rise and fall sharply. Such investments are clearly not for the faint of heart.

Investing in cryptocurrency in 2018: which coin to choose?

Each user can easily choose any type of coins and buy it. However, the most reliable way today is to choose already proven money that has been in stable positions for a long time.

Here is a list of the five most common cryptocurrencies that you can easily buy right now:

• . The most common cryptocurrency that appeared on the market first. Today, bitcoin has overtaken its competitors in terms of investment volumes many times over. The course of this coin is quite stable, although from time to time there are unexpected jumps in price;
• . A coin that has earned its fame thanks to smart contract technology. One coin can be purchased today for $500;
• This is a fork of the main cryptocurrency on the market - also quite stable. Today for one coin you need to pay about $750;
• . The difference between this coin and others is that it integrates well with modern banking and other payment systems. This allows you to significantly speed up transaction processes and reduce commissions for transfers;
• . This is one of the first coins that began to compete with bitcoin. They work according to similar algorithms, but operations with Litecoin are faster.

On the market today you can find hundreds of different coins: to make the most profitable investment, you need to conduct a qualitative analysis and consider many options.

Is it worth investing in cryptocurrency: let's summarize

Today it is impossible to say with certain accuracy what the future of innovative digital money is. The opinions of even major experts differ. For example, Jordan Belfort, the former largest trader on Wall Street, believes that digital money is a very big scam that will be revealed very soon. However, a prominent Israeli civil servant, Benjamin Natanyahu, has a different opinion: he believes that the future lies with cryptocurrencies and all monetary transactions will soon be based on blockchain technology.

The second point is also crucial: Bitcoin is valuable if it truly becomes a meaningful global currency. In other words, you must actually need it to buy things, and therefore you will need to purchase coins from someone in order to become part of world trade due to the lack of other ways. Right now, only speculators. Its price is not rising because people buy coins for real business. It grows because people buy it, hoping that someone else will buy it at a higher price later. Value comes only when you exchange Bitcoin back for some currency, like the US dollar, and use it to buy something useful, like a house or business. When the stock of stupid speculators dries up, value evaporates—often very quickly.

In addition, the currency should not be artificially sparse. It must expand with the increase in the volume of goods and services in the world, otherwise we will go into deflation and accumulation. It also needs a centralized regulatory system led by smart people (central banks, the state financial system). In the world of human trust, the most useful tactic is to use the wisest and most respected people as watchdogs for "the rest of the adults."

Finally, nothing becomes a good investment just because "it's been on the rise lately."

If you don't agree with me, right now the price of my nails has increased by 70,000% and now it is $70,000 per sachet. Quickly, send me this money to PayPal or WebMoney before you miss this incredible "opportunity"!

World governments are not going to let everyone start trading money anonymously and avoid paying taxes using Bitcoin. If the cryptocurrency does take off, it will be in a government-backed form like the new "Fedcoin" or "G20coin". Complete anonymity and avoidance of the government will not be one of its functions.

And you don't need it anyway. Are you hiding your money in offshore accounts and running a black market business? Or do you make tax evasion the basis of your financial well-being? Probably not, because as a rule, life is much better when you do not live in the underworld.

The “Cryptocurrency” bubble is just a repetition of the past: a large percentage of the population is prone to mass delusions that lead to irrational behavior. This is a known "bug" in our "operating system" and we have developed some elements of our society to protect us from it.

Nowadays, the securities market is regulated by special laws (FZ "On the Securities Market", the Federal Law "On the Protection of the Rights and Legitimate Interests of Investors in the Securities Market", the Federal Law "On the Features of the Issue and Circulation of State and Municipal Securities", etc. .), precisely because they used to be issued without restrictions, there were many different shares that were similar to the current cryptocurrency. And the main purpose was the same: to sell to inexperienced investors as a get-rich-quick scheme. And an inexperienced investor is too lazy to understand the essence, he buys because the price is rising.

Don't be one of those fools.

What is happening in the world of cryptocurrencies clearly claims to be a mini-revolution, the potential of which is not fully understood today even by the most active players in this market. Its capitalization today is 80 billion dollars, and the daily trading volume is 4-5 billion. Where did the cryptocurrencies come from, how to get them and what to do with them, says Zhanna Kulakova, financial consultant at TeleTrade (TeletradeBel LLC).

— Initially, there was a powerful ideological background in the creation of cryptocurrencies, and the creators of bitcoin focused on its anonymity.

Zhanna Kulakova
TeleTrade Financial Advisor

"What can characterize a person more precisely than his financial transactions?"

The little-known "father" of bitcoin to the masses Satoshi Nakamoto did not promote his offspring alone: ​​other people took an active part in this, such as, for example, Hal Finney, a committed cypherpunk (representative of the community of people interested in maintaining anonymity). One of the main threats to privacy was seen by cypherpunks as money, since few things can characterize a person more accurately than their financial transactions. That is why the idea of ​​creating an anonymous payment system seemed so attractive to them.

Finn actively promoted cryptocurrency on the Internet Marty Malmi. “The wide dissemination of such a system could undermine the ability of the state to exploit citizens (…) I cannot but be encouraged by practical projects that can bring us closer to true freedom”, he wrote. By the way, that Finney, that Malmi, that other "activists" of bitcoin did not set themselves the task of evading taxes. It was primarily about the desire to hide information about oneself from the all-seeing eye of the state.

Marty Malmi. Photo courtesy of talouselama.fi

The first relatively large online store accepting bitcoin was an anonymous site selling illegal goods - Silk Road. Over the 2.5 years of the platform’s existence, the volume of transactions amounted to 9.5 million bitcoins. Its owner, William Ross Ulbricht, by the way, was also an active critic of government economic regulations. Now he is serving a life sentence. The history of these people and their motivation is described in detail in the book Digital Gold by Nathaniel Popper.

However, today it is not the anonymity of cryptocurrencies that comes to the fore, but the investment attractiveness for individuals and the possibility of attracting financing for companies.

Long-term investments: what is the risk?

It is interesting to consider cryptocurrencies as an investment tool, and the simplest and at the same time profitable strategy can be "buy & hold" - buy and hold. This is a long term investment.

Price growth will be facilitated not only by the widespread legalization of cryptocurrencies and the growing interest in them in society, but also by the fact that the emission of many cryptocurrencies is algorithmically limited. The system was originally conceived in such a way that it is impossible to issue more than a predetermined number of tokens (electronic tokens, each of which is a unit of virtual currency). For example, for bitcoin, the “ceiling” is 21 million coins, for litecoin - 84 million.

And in the short term, the cryptocurrency market can be subject to strong fluctuations.

For example, over the period from 2009 to the end of 2013, bitcoin rose in price from zero to $1,200, after which by January 2015 it collapsed to $160, two years later, by January 5, 2017, it again rose in price to almost $1,200, and by January 11 it had fallen to 765 dollars. Ethereum this year first pleased investors with growth from $8 to $400, a week later it fell to $13, but soon again exceeded the $300 mark.

Just a few large transactions can provoke significant fluctuations in prices for cryptocurrencies, and these fluctuations will not necessarily be in the direction of growth. In 2011, one seller, placing only one large order to sell bitcoin on the MtGox exchange, collapsed its price from 17.5 to 0.01 dollars in a matter of minutes. It is still not known exactly who it was: someone who intentionally wants to crash the market, or just a scammer who wanted to get rid of the stolen bitcoins as soon as possible. But the fact remains that the price of this cryptocurrency instantly collapsed by 1700 times. Now the market capitalization is much larger, and it will be much more difficult to collapse it, but the repetition of such situations is not excluded, especially if we are not talking about bitcoin, but about a “young” cryptocurrency with a small capitalization.

In addition, a sudden drop in confidence in cryptocurrencies can cause periods of falling prices for several months or even years. For example, in the summer of 2016, the bitcoin rate collapsed by 20% after a large-scale hacker attack on one of the largest bitcoin exchanges in Hong Kong. And for the period from December 2013 to January 2015 (that is, a little more than a year), bitcoin fell more than 7.5 times from $1,200 to $160 amid hacker attacks and mass profit taking.

Photo from the archive, ferra.ru

However, those who choose cryptocurrencies as an object for long-term investments are also at risk. An increase in the value of virtual currencies in the future looks very likely, but it is not guaranteed. If, for example, we assume that some critical vulnerability will be discovered in the system of a particular cryptocurrency, or states will massively introduce a total ban on the use of this currency, its value may even collapse to zero.

How to invest in cryptocurrency

There are several ways to get cryptocurrency.

• Mining- independent mining with the help of a computer, which will have to solve a complex cryptographic problem. This method requires a person to have certain material costs for equipment and electricity, as well as some skills, so it is not suitable for everyone.
• Just buy cryptocurrency, using one of the many online services for the exchange of virtual currencies or even a special cryptocurrency ATM (these already exist in Russia and Ukraine). Here it is important to pay attention to the commissions that are often charged during the operation, and choose the most profitable option.
• Buy cryptocurrency within ICO- the initial public offering of cryptocurrencies, which is used by companies to attract investment. This process has much in common with an IPO (public offering of shares), only in this case the investor invests not in securities, but in so-called tokens - units of a new virtual currency.

After the ICO, cryptocurrencies, as a rule, begin to be traded on the stock exchange and their price fluctuates depending on how successful the project turned out to be. Both a tenfold increase and a significant fall are possible. Here, it is important for the investor to correctly assess the prospects of the project for which financing was attracted. In fact, everything happens like in the stock market.

Photo from the world's largest mining farm in China. From cryptonavigator.com

Is the game worth the candle

This year alone, startups have raised more than $1 billion through ICOs. That's ten times more than in all of 2016, according to research firm Smith & Crown.

According to some reports, 10 million people invested their money in the framework of the ICO. Interestingly, the creators of ether, one of the most popular cryptocurrencies today, raised funds for the development of the system through an ICO, selling the first 60 million tokens for 31.6 thousand bitcoins. Then the price of one ether was 0.3 dollars. As of July 13, 2017, it has reached $200.

Today, there are several thousand cryptocurrencies in the world and new ones are constantly appearing. Among them - about a hundred well-known. According to Coinmarketcap, the top 10 cryptocurrencies by capitalization in early July 2017 included Bitcoin, Ethereum, Ripple, Litecoin, Ethereum Classic, Dash, NEM, IOTA, Monero, and BitConnect.

Many say that it is too late to buy bitcoin: it is too expensive and you need to choose from young and promising ones.

However, over the past three months, bitcoin has doubled in price and, according to Goldman Sachs forecasts, will reach $4,000 by the end of this year.

Standpoint Research predicts it will grow to $50,000 in 10 years, and Saxo Bank - up to $100,000. Some experts also talk about a million dollars per token. Bitcoin has clearly not yet reached its ceiling.

In my opinion, the best chances for growth are cryptocurrencies placed as part of the ICO of really successful projects, as well as the “oldies” that have long been known to everyone and keep afloat quite well - bitcoin, ether, lightcoin.

What is the law?

Prices for cryptocurrencies are formed in the same way as for any other asset: under the influence of supply and demand. Demand in this market is of an investment nature, and its additional driver is the legalization of cryptocurrencies in many countries.

At the same time, approaches to regulation differ: some states consider crypto-currencies as a commodity and tax them, others as a currency or as private money.

A complete ban on cryptocurrencies exists in Thailand, Vietnam, Bolivia, Bangladesh.

But most developed countries - the USA, Canada, Singapore, EU countries, Japan, Australia - have taken the path of legalization.

The caution of states in this matter is not difficult to understand. Cryptocurrencies do not have a regulator over themselves and are little dependent on the monetary measures of central banks and big politics, since any participant in the system can issue them, and transactions do not require the presence of any intermediaries.

There is still no legal crypto-foundation in the world: no direct prohibitions, no permits. And Belarus seems to be taking the first step in this direction. A special interdepartmental working group with the participation of the Administration of the Hi-Tech Park is preparing a draft regulatory legal act on the digital transformation of the Belarusian economy. The blockchain network is planned to be used to maintain registers of bank guarantees and in the securities market.

When thinking about rational investment in digital currencies, it is first of all important to determine for yourself the so-called planning horizon for future deposits. It is most optimal to choose long time periods - a year, and preferably more. You should not set yourself up for short-term “super profits”, because in this case, disappointment in cryptocurrencies is inevitable in the very near future.

The founder of Pantera Capital, Dan Morehead, recommends investing in a certain crypto asset when its value reaches values ​​above the average for the last 230 days, and then “forget” about the purchased coin for a year. After this period, sell the cryptocurrency and “inevitably fix income.”

We have prepared for our readers several recommendations on how to effectively and optimally invest in cryptocurrencies.

Every investor should have bitcoin in their portfolio

It is logical to focus on proven assets. Yes, it is likely that profits over time will not be as high as, for example, in the case of some altcoins, which can “shoot” within a year by 1000%. However, at the same time, the risk of the altcoin falling by the same number of points is also very high.

Bitcoin, no matter how funny it may sound, is a symbol of the stability of the cryptocurrency market. He will not go anywhere, will not disappear "from the radar" of traders, will always be in the spotlight of investors.

Did you know that of the Top 10 digital currencies in terms of market capitalization in 2013, only Bitcoin, Ripple and Litecoin “survived” to date, while Ethereum was not there at all then? The rest of the assets either significantly lost their positions, or completely disappeared from the field of view of the crypto community. We have already written on this topic, read it - it's interesting.

Therefore, it is worth taking into account the risk-reward ratio when investing wisely in cryptocurrency and give bitcoin a worthy place in your investment portfolio along with altcoins and other traditional “fiat” assets.

A logical question arises: in what proportions should you distribute your portfolio between bitcoin and other cryptocurrencies? In order not to be unfounded, we decided to support our arguments with investment statistics from two large investment companies:

Rivemont Crypto Fund:
BTC - 19.4%
ETH - 8.4%
Fiat - 72.2%

Crescent Asset Management:
BTC - 44.7%
ETH - 19.3%
XRP - 8.7%
BCH - 6.4%
EOS - 3.4%
LTC - 2.4%
XLM - 1.9%
TRX - 1.3%
NEO - 1.3%
Other altcoins - 11%

As you can see, in large analytical companies, the main bet is placed on bitcoin. The most optimal proportional ratio of the cryptocurrency portfolio, according to most analysts, is the following distribution: bitcoin - 30%, altcoins - 70%.

Gold vs bitcoin

Many analysts representing the "traditional" financial space call gold a direct competitor to fiat funds such as the US dollar, euro, etc.

Yes, of course, there is some truth in this. This asset has historically been growing in price, weakly reacting to all kinds of financial "cataclysms" with which the modern world is so rich. However, if we consider the growth trend of bitcoin and compare it with gold, it turns out that the cryptocurrency in the period from 2012 to this day shows growth that is several times higher than the dynamics of gold prices over the same period, despite the comprehensive decline in the digital market during all of 2018.

What emphasis should be placed on cryptocurrencies?

So how much to invest in cryptocurrencies from the total investment capital as a percentage?

Analysts at Yale University advise to “spend on a crypto portfolio” at least 7% of the amount of money intended for working with investment financial instruments - stocks, gold, etc. According to experts, on average, American investors invest 5% of their capital in bitcoin.

However, it is worth remembering and understanding that the issue of distribution of a crypto portfolio is a dynamic process, and decisions need to be made depending on the situation in the cryptocurrency, stock and fiat markets in a certain period of time.

An interesting idea was expressed by one of the founders of the Bitcoin fund, Bobby Lee, who said that crypto investors should be wary of four factors that prevent them from making a profit: indecision, underinvestment, profit-taking immediately after a small exit to plus, panic and short-lived sales with attendant losses when the purchased asset falls

You don’t need to be gambling and overly emotional in the crypto market, you need to approach investing in digital currencies with a “sober” mind and cold calculation.

Investing in cryptocurrency is extremely fashionable. Only the lazy did not invest in bitcoin and its counterparts, many keep the stash in the crypt, for some it is a tool for active speculation. Why is everyone so eager to deal with the money of the future, and does everyone in this environment really shine for cosmic profit?

In fact, everything is not as simple and profitable as it seems, and this way of earning has its drawbacks. We will talk about the advantages of investing in cryptocurrencies and the disadvantages of such earnings in this article.

Even if you are completely far from modern technologies and novelties, you have probably heard what bitcoin is and have at least a minimal idea of ​​​​what a cryptocurrency is. Nevertheless, it cannot be said that the society has a correct opinion about digital money, and the knowledge of some is limited only to the fact that they have heard something distant about the crypt and have no idea what kind of animal it is.

Cryptocurrency - digital means of payment that are decentralized and exist thanks to a peer-to-peer network. In a more understandable language, this is virtual money that does not have material forms and exists exclusively in the form of digital units encoded cryptographically.

None of the banks issues such money - they are mined by the efforts of computer technology, by generating digital blocks. This gives crypto the main advantage, which is that the payment system exists on its own, no one can manage it, hack it, or destroy it in any way. At the same time, any network user can become the owner of crypto-coins (this is a conventional name, in fact, no coins exist), can make payments with them, transfer them to other users, and even profit from wild exchange rate fluctuations.

Actually, the latter is the reason why everyone wants to earn money on cryptocurrency. If you know the minimum basics of financial processes that take place in the world, then you should know that all the money that various states issue (they are also called fiat) is backed up by something. So, if the money we are used to is backed by resources or national reserves, then the cryptocurrency is not backed by anything, everything is built on trust.

The rate of any of the coins depends on the demand for it, and the more people who want to buy the currency, the more expensive it will be in price. Based on this, it can be noted that the mood of the public is very unstable, because it depends on many factors, and therefore the rate of crypto money has a high volatility, that is, it jumps in different directions with a large amplitude. This is what makes it possible for traders and investors to earn on the operations of buying and selling coins.

The first cryptocurrency called bitcoin, which appeared in 2008, has become the most popular, and therefore expensive. As soon as the network community realized that the bitcoin rate was growing very rapidly, everyone actively began to buy it, pushing up the price even more. Thus, the coin has taken a dominant role in the entire cryptocurrency market and other alternative coins can only envy such a stunning success. Many investors prefer bitcoin, considering other currencies unworthy of attention, but investing in the older brother of the crypto market has both its pros and cons.

Advantages of investments

Due to the fact that bitcoin was the very first and the lion's share of attention went to it, today it is the main digital currency and alts, one way or another, are tied to the cue ball. By investing in bitcoins, the investor receives obvious benefits:

• Bitcoin is the most popular and the demand for it is only growing, as is the exchange rate. After the scalability problem was solved, it began to significantly gain in price.
• It is convenient to invest in bitcoin - it is presented on all crypto-exchanges and it will not be a problem to buy cryptocurrency, as well as store it, because there are a lot of wallets.
• It is believed that investing in bitcoin is the most liquid investment when compared with other coins. Today, it’s not that it’s easy to exchange bitcoin - it has already become like ordinary money and we are invited to make purchases in bitcoins, participate in investment projects, etc. I'm not talking about the fact that with a flick of the wrist you can turn bitcoins into fiat.

Risks and disadvantages

This is not to say that there are no risks when investing in bitcoin. They are present in any investment, and when it comes to cryptocurrencies, the risks are very significant. The price of coins is constantly fluctuating, often there is a market correction, because of which the investor can go into a serious drawdown. If at this moment he succumbs to panic and merges coins, then there is a very high probability not only not to earn, but also to lose the invested money.

If we talk about the disadvantages of investing money in Bitcoin, then it should be noted that this is a long-term investment and if you are not ready to wait, then this option does not suit you at all. It is not known when the rate will rise so much that it will bring a significant profit, so the investor should be patient, perhaps even for several months or years.

Already today, bitcoin has a solid price, reaching up to 3 thousand dollars apiece. Stunning jumps in the form of 50% or 100% per day with bitcoin no longer happen, and it is unlikely to happen. Therefore, in order to make money on the volatility of bitcoin, an investor needs to operate with solid amounts - to get at least $100 from the jump, you need to have at least a thousand or two dollars. Thus, it is better for small investors not to flirt with bitcoin, because the risks will be greater than the possible profit.

Investments in altcoins

The success of bitcoin has caused the cryptocurrency market to grow exponentially. Here and there, new coins began to appear, all of them interesting as a selection and, of course, offering users something special. Investors also did not deprive altos of their attention, as a result of which this market has grown to unimaginable proportions. As in the case of bitcoin, there are pros and cons of such investments, I propose to analyze them later in the article.

Advantages of investments

Forgive me bitcoin, but earnings on alts are much more profitable and can bring super profit in a short distance, which the old cue ball can no longer boast of. Coins have a lot of advantages, which is why investors are increasingly looking towards alternative coins. One of the reasons for this is that the price of an alternative cryptocurrency is significantly lower than the value of Bitcoin.

Even with $10, an investor can quickly increase his initial capital by several times. If we talk about ICO, then buying a coin on a pre-sale can bring a profit of thousands of percent. For example, investors who invested in the development of Ethereum received over 3600% profit when its price went from a penny to $400. Of course, they had to wait a little before getting rich, but such a result was worth it.

• There are about 800 altcoins, new coins appear daily, so the investor always has a choice in which of them to invest his money.
• Coins are very volatile in price and can rise in price by tens and hundreds of percent in a matter of minutes. This makes it possible to get rich quickly without much effort.
• One of the main advantages of alternative currencies is that they are profitable to buy both as a long-term investment and for a short time.

Risks and disadvantages

But the risks with alts are an order of magnitude higher than with bitcoin, which, in comparison with them, is more reliable and stable. First of all, you need to understand that not all coins are destined to rise in price, many remain just another unknown crypto-currency. The investor must be very careful in his investments and study well the features of the coin on which he is going to earn. If it does not have a strong development team and unique technology behind it, then it is definitely better to refuse long-term investments.

The phenomenon of ICO is especially popular among investors. Pre-purchasing coins is very beneficial, but only if the coin rises in price. Unfortunately, 99% of ICOs end in losses for investors: there are too many scammers and scammers here, but even worthy cryptocurrencies may not shoot and receive due attention, which is why they are sent to the graveyard of dead coins.

Well, to everything else, no one canceled the fact that many coins are not so easy to buy, newcomers are present only on some exchanges. Moreover, no one is immune from the phenomenon when any young coin can be delisted on a particular exchange and then your investment will turn into a loss-making enterprise.

cloud mining

In addition, in order to directly invest in the purchase of cryptocurrency, you can earn on it in other ways. In particular, there are quite a few offers on the market for the provision of so-called cloud mining services. Its essence boils down to the fact that you simply pay for the rental of facilities and make a profit from the production of cryptocurrencies. At the same time, you do not need to worry about equipment repair, cooling and updating - everything will be done for you.

To be honest, I am very skeptical about such services, because I do not quite understand the logic of such companies. For example, if I have equipment, then it is natural that I will mine bitcoins myself, and not start leasing the power. What is the benefit? As for me, the usual financial pyramids are hidden under the name of cloud mining, and this assumption was fully confirmed in 2016, when a large service called GAW Miners stopped working. Its creator, Joshua Garza, admitted that he did not carry out any mining of coins, but paid out profits from new deposits. The story ended with the fact that investors lost about $ 9 million, and the schemer faces 20 years in prison.

To make money on the extraction of coins, it is not necessary to turn to any cloud mining services - you can invest in equipment and mine cryptocurrency on your own. Cryptocurrency mining is a rather specific type of income that will require not only certain efforts from you, but also technical knowledge.

Having ventured to mine, you should understand the following nuances:

• The extraction of each of the coins has its own characteristics and, based on the algorithms and equipment requirements, you can mine some coins using only a powerful video card, but to get other cryptocurrencies, you can’t do without a powerful asic miner. In any case, investing in cryptocurrency mining will require considerable costs, which may not pay off.
• The mining process will only be profitable if you have an inexpensive source of electricity and provide cooling for the equipment. When overheating, the equipment will simply fail and then you will only suffer losses.
• Do not expect that mining will make you millions. Only large mining farms receive big money, ordinary miners can only be content with little.
• If you decide to purchase a ready-made mining farm, then be prepared for the fact that it will cost an order of magnitude more than a farm assembled on your own. But no one will provide you with guarantees of its long-term operation - such equipment is actively used and it is not a fact that after the purchase the farm will not order to live long.

Speculation on the cryptocurrency exchange rate

Like it or not, cryptocurrency is an excellent tool for speculation and allows traders to multiply their capital well. Buying low and selling high is not difficult, and if you can analyze the market, read charts and make forecasts, and not just point your finger at the sky, then you are destined to become a successful trader. Earnings on speculative turnover of funds will be profitable if you follow the rules:

• For work, choose several trading platforms at once in order to diversify risks - exchanges often go into scam and the other day we saw a living example of this phenomenon.
• Buy several promising coins at once, do not keep all funds in one currency - this way you will be able to operate with your capital, because having gone into a drawdown, the coin will “freeze” your assets for a long time.
• Do not panic and do not drain coins if they suddenly start to become cheaper - this is a temporary phenomenon that should be waited out.
• When buying coins for the long term, do not store them on the exchange - it is better to withdraw them to a desktop wallet.

Investing in cryptocurrencies is a quick start on the path to enrichment and financial independence. Even if you do not own large capitals, the crypt makes it possible for everyone and everyone to earn on an absolute liability. Which way to choose is a personal matter for everyone and, I think, after reading the article, you have already found out of this variety the path that will lead you to success!