This story originally appeared on Due
Bitcoin had quite the year in 2017. We saw its price increase well over 1000 percent — going from $1,000 at the beginning of 2017 all the way up to $19,000 by mid-December. That meteoric rise attracted people from all walks of life to invest in Bitcoin. Now hedge funds and first-time investors are looking to join the craze and rejoice in massive returns.
That all said, is Bitcoin still a good investment in 2018? Have you already missed the train? Below i’ll give my opinions on this topic.
(Please take note that I am not a financial advisor. Investing in cryptocurrencies is both highly speculative and risky. These opinions are my own and should be treated as such. Invest at your own risk.)
What are you investing for?
In my mind there are two types of people investing in cryptocurrency. Those who believe it represents the future of money and are in support of a decentralized financial system. And the others are those who are simply looking to make money. Now you don’t have to be one or the other, but more often than not the investor is leaning towards one.
If you believe in the future of money then you are investing in this currency in hopes to one day use it to make purchases. You are also planning to hold it with hopes that it’s going to appreciate. That said, in order for Bitcoin to ever be used as an everyday currency it simply cannot fluctuate thousands of dollars a day. The question you need to ask yourself is whether or not it’s going to settle at it’s current price. If you believe it’s going to rise in the long term then you should make the investment knowing you’re going to need to ride through a ton of fluctuation.
If you’re simply looking to make money with cryptocurrencies then it’s a simpler answer. Bitcoin is very volatile. As I stated above Bitcoin hit close to $20,000 in mid December 2017 and a month later dropped to about $11,000. When there is market fluctuation of that nature there are opportunities to make money, and lots of it. I would imagine the volatility won’t end anytime soon. That said, if you’re looking to trade on the short game there’s definitely an opportunity.
How can you get started?
If you’re a first timer in the crypto world I suggest doing some research first. Never invest solely based off someone else’s opinions and always get informed before investing in any asset. It’s common for people to jump into cryptos head first just because they see a lot of green. This is a bad habit and will lead to bad decisions down the road.
For starters, learn about the blockchain and how it’s revolutionizing the world of finance. I suggest checking out Ivan on Tech and listening to some of his YouTube videos. He does a great job of breaking down the concepts as well as giving some expert opinions on recent news.
2. Open a trading account
Once you’re ready to invest I suggest opening up an account on Coinbase. This platform features a clean user interface and is great for first time investors. You can sign up here for a free $10 in credits.
Once you’ve created your Coinbase account, I recommend making all of your trades using Coinbase’s exchange called GDAX. This exchange gives you access to real-time data and graphs not to mention lower fees.
There are also plenty of Youtube videos that show you step-by-step walkthroughs on how to access and use these various exchanges. They may look daunting at first but trust me, it’s easy once you know how.
3. Secure your coins
Last but not least you need to be able to secure your Bitcoins. You can keep them on Coinbase but I suggest moving them offline or onto a cold storage wallet. Two popular ones are the Nano Ledger S and the Trezor. These wallets allow you to keep your Bitcoin offline and in a secure location.
Exchanges have been known to get hacked in the past and those who kept their coins on those exchanges have lost everything. That said, it’s better to be safe than sorry.
Like any investment you need to be prepared to lose everything. In addition to that, you need to continue to do research and stay up to date on current trends. In my personal opinion, Bitcoin still remains a good investment in 2018 regardless if you are investing short or long.
(By Renzo Costarella)
(The author of this article holds long positions in BTC, ETH, IOTA, ADA, XLM and TRX)