When digital currencies appeared on the market, many people were skeptical towards this type of investment. A small number of them, who were brave enough to invest in bitcoin, now are rich people. In 2017, digital currencies reached their peak, and now many people are interested in investing their money in cryptocurrencies, but the process is more challenging than it was a couple of years ago. But, if you are a beginner and you want to explore crypto, then we have prepared a small guide for you. So, here is what you need to know about digital currencies.
To trade any type of cryptocurrency, you need a wallet to store them. In this case, bitcoins need to go in bitcoin’s wallet. Wallets behave like a crypto bank account. But, how can you get an e-wallet? The easiest way is to sign up for an exchange that allows you to buy, trade or sell digital currencies. In this case, you will have an opportunity to generate a wallet for every token that you traded. For instance, Coinbase will provide you wallet for bitcoin, Ethereum, litecoin, and bitcoin cash. You need to understand that crypto wallets don’t behave like physical one. They are just a secure window into the blockchain so that you can track your transactions. But, keep in mind what type of wallet you are choosing because it will protect your investments and money.
If you want to start trading cryptocurrencies, then you need to choose an appropriate exchange. But, considering there is a large number of them on the market, you will have a hard time deciding the right one. In the last couple of months, we have been the witnesses of many frauds and hacker attacks, so it’s still risky to invest in them, but this doesn’t stop people. There are a couple of steps which will help you choose the right exchange. First of all, select the exchange that is located in your country. Bitcoin is still the most common trading pair, and if you are to invest in other digital currencies, you will only be able to trade and buy it against bitcoin. Most exchanges aren’t regulated, so you are risking here. Compared to traditional stock exchanges, crypto exchanges are open 24/7, 365 days.
Coinbase – located in the U.S., Coinbase is one of the largest exchanges in the world. Investors can trade bitcoin, bitcoin cash, Ethereum, and litecoin and you can buy them directly with your credit card. But you need to have a $250 weekly limit.
Bittrex – another U.S. exchange and even more popular than others because it offers more than 1300 alternative cryptocurrencies. You cannot deposit directly, and you will need to buy bitcoin or Ethereum and transfer them into Bittrex before you can trade.
Binance – this exchange is located in Hong Kong, and it was only launched in 2017. However, their platform became very popular due to a large volume of trades.
Last year was terrific for the cryptocurrency, and many investors have managed to achieve massive profits. Everyone talked about bitcoin and how to invest in this currency, but it seems that at the beginning of 2018, the hype has died down. We still remember that significant crackdown of one of the biggest Japanese exchanges and somehow that made people think about the future and whether they should invest the money in cryptocurrency. Disappointing prices in January and February have apparently driven many bitcoin trades to avoid checking on their exchange accounts. The latest polls indicate sharp decline month over month.
The total number of visits to the websites of significant cryptocurrency exchanges had been reduced significantly in February. Based on many research, the visits have spiked in December 2017 and January 2018 and fallen by half in February. The total number of visits was down 49% in February, from 123.5 million to 63.1 million, after reaching 169.5 million in December 2017. Even though bitcoin had a rocky start, it doesn’t mean it’s all bad news for this digital currency. Many experts predict that bitcoin will recover by the end of the year.
Some analysts who are forecasting the prices say that we need to review the supply and demand factors and that we can expect the rise in price up to $20.000. They based this number on supply because the only limited number of coins are mined each year. On the other hand, without a firm regulation and guidance in cryptocurrency’s valuations, this price is prone to changes. Moreover, bitcoin investors expect positive developments in the market, claiming this is just a temporary crisis. There will be a lot of innovation in trading, starting with a bitcoin payment as legal paying method.
Like with any exchange, we can’t predict the crash on one currency or asset, but it’s possible. In case of bitcoin, many analysts are wary of the crash, and this is one major drawback for many investors. They are afraid to invest their money, and this trend will continue in 2018. No one can predict the crash of bitcoin, but there is always a possibility it will happen sometime in the future. While these predictions can be highly unreliable, there is some truth in them, and you will just have to follow price pattern signals.
The future of bitcoin and cryptocurrencies is anything but sure, but it’s reasonable to assume that at least for the short term, the price of bitcoin will continue to rise. On the other hand, the investors need to be very careful because in 2017 we have been witnesses to some of the nastiest feuds and many investors got ripped off due to hacker attacks. It’s still early to say, but this type of investment may become a safe haven for investors’ money.