Bitcoin has certainly been in the firing line in recent weeks, as prices plummeted and many reported that the Bitcoin bubble was about to burst. But as predicted by numerous crypto advocates, Bitcoin has bounced back and is currently trading at over $9,000 per coin. The world of crypto-investments is far bigger than just Bitcoin though, and with positive predictions for the growth of a number of ‘alt-coins’, combined with wider acceptance of blockchain technology, could investing in cryptocurrency be the smartest investment move you make this year?
- Regulation will reap rewards
Most reports of increased regulation for cryptocurrencies have emphasised the negative impact such announcements have had on the price of cryptocurrencies. Naturally, any announcement which adds uncertainty to the marketplace (whether positive or negative) will cause an immediate reaction in trading activity and subsequent prices, but these are almost always short term in nature, with prices stabilising shortly afterwards. Over the longer term, better regulation can only be a good thing for the market and will help to reduce the cases of frauds and scams by ensuring that any new coins meet an agreed criteria. It will make the marketplace safer and more accessible to a wider range of investors, as well as reduce some of the fears currently held by institutional investors and fund managers of high net worth clients.
- Blockchain is the future
A large proportion of discussions on the longevity of cryptocurrency have centered on the performance of a specific coin, such as Bitcoin, so discussions about whether the ‘bubble will burst’ are really about the lifespan of a certain currency. This is an entirely separate discussion to the future of blockchain, which is the underlying technology, and is delivering much more than simply allowing coins like Bitcoin to trade. Some of the world’s largest brands, including Microsoft, are investing their resources in exploring how to incorporate blockchain into their future business offerings and it is clear that many more are likely to follow in the months and years ahead.
- Less barriers to entry for new investors
As a crypto investor myself, I remember how confusing it was when I first looked into setting up my first investment and it was only thanks to the help of an experienced friend that I was able to navigate my way through. The crypto-investment market is still incredibly crowded and you will have heard many stories circulating about crypto scams, but thankfully, it is getting easier to decipher which routes to follow. Coinbase has achieved notable success, with over 10 million customers trusting this wallet for their investments in currencies like Bitcoin, Bitcoin Cash, Ethereum and Litecoin. New crypto-investment funds like the 10x Growth Account have also been designed to help investors get involved in crypto markets quickly and efficiently, taking over all of the difficult decisions such as what to invest, where and when, by professionally managing the investment on your behalf for a fixed period of 12 months. The 10x Growth Account’s 2018 fund closes to new investors on 30th April 2018, so if you still want to invest, you’ll need to be quick!
- Bitcoin’s rival is waiting to be discovered
It’s clear that Bitcoin is dominating the cryptocurrency market at present in terms of value and awareness, but for those who are keen to make big returns on their investment, the ship has sailed. This is because those who have really benefited from Bitcoin made their investment years ago, when the unit price per coin was incredibly low. However, Bitcoin is just one of many exciting currencies bubbling away, which means there are some up and coming alt-coins which are still trading at a relatively low price and have the potential to grow significantly in the years to come. It is worth noting here however, that all investments in cryptocurrency remain very high risk and you should never invest more than you are willing to lose or you can afford. If you are unsure about the size of investment you want to make, always seek independent financial advice before committing to purchase.
- Take the long view
Because cryptocurrencies have been in the public eye so much recently, we’ve heard about every rise and fall in price, with each movement sparking a new round of discussion over whether Bitcoin has peaked for good. Two weeks ago people were fearing the worse, with Bitcoin approaching the $6,000 mark and this week, it’s sitting above $9,000. This is exactly why micro-analysing the market isn’t necessary and actually just makes it all the more stressful. All types of investment marketplaces have an element of volatility and these waves are completely normal. Realistically, you need to be looking at how your investment is likely to fair in the medium and long-term, so 12 months, 5 years, 10 years from now. By focusing on the long term potential gains, along with a strategic investment strategy of buying low and selling high, you can avoid getting sucked into the daily paranoia caused by natural market fluctuations.
- Crypto investments are driving technological innovation
Investing in cryptocurrencies means that more time, effort, money and expertise is being ploughed into the supporting technologies like blockchain, which have the potential to radically improve the way we work, live and do business across the world. The potential benefits of blockchain can be seen across supply chain, quality assurance and safety, accountancy and contractual procedures, and in the way we send and receive money in the future. Naturally, investors are looking for where they can make the biggest financial returns, but knowing the investment is also delivering value and benefits for future generations is also likely to be an important consideration too.
*Originally published on Every Investor