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#Proof of authentication Forum username- Sunnyace001 Forum profile link: https://bitcointalk.org/index.php?action=profile Telegram username-@Nsejahemmerson Participated campaigns- Telegram, Article Erc 20 address-0x95405d875DdC267c6F5860e50Ca315d6aFF029FB |
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Investing in crypto is what most of us love doing because it easily yields profits and is usually interesting to speculate over . When I began investing in crypto I had little knowledge and made some mistakes which many still make today and I'll like to share them with you.
(1). Investing in high-value crypto with little money
What you may have never realized is that the crypto you chose to buy should depend on the amount you have. If you have alot of money to stake, you could easily go for high value cryptos but if you don't have much money and you still go for the high ,you may be allowing lots of profit to pass you by without even realizing.
Take for instance Bitcoin. As at the time I composed this article Bitcoin was 45000 dollars so I'll use that number.Now imagine if I chose to invest my spare 100 dollars in a 45000 Bitcoin and in 2 weeks time it rose from 45000 to 55000 dollars . I would be very happy because the price of my crypto has increased by 10000 and I will have made some profit of about 19 dollars on top.
With that in mind imagine as well that I used the same 100 dollars to buy an altcoin that was valued at 50 cents. From my calculations I would buy exactly 200 of that coin . Now if that coin rises within the same period from the 50 to 80 cents I would be making 30 cents on each of the coin and when you multiply that by 200 I have made 60 dollars on top my 100 dollars . Think back once more to the difference in the price and you will realize that I'd have made more profit from a 30 cent increase than from a 10000 dollar increase. Why? Simple.
If I had alot of money to buy a whole Bitcoin or even half of it, I will make a good amount of profit because I would own a huge chunk of it .From the 10000 dollar increase I would make a 10000 profit if I bought the whole Coin and 5000 if I bought half and that's quite impressive . So if your money is small such that you get tiny fragments of the coin , you will make very little profit with even a huge price jump and much more if you invested in something you were able to get much of not a tiny fragment and that could be a cheap altcoin.
Don't get me wrong Bitcoin could be very profitable but when your money is small and you can't get up to a whole or half of it you lose your opportunity to make better profits if you choose to invest in it than in cheaper altcoins.
(2). Focusing on high prices and ignoring utility
Many people are eager to buy a crypto when they see the price . Before you do this, ask yourself why was crypto currency created? When you think about it ,you realize that crypto was created to solve problems posed by Fiat such as centralization and slow cross border payments.
Since crypto was meant to solve problems it becomes an inevitable truth that when crypto it becomes more widely used, the most valuable crypto will be those that solve the most problems. Personally , I always use ethereum as an example to show this . Ethereum's block chain is used in running so many smart contracts around world and many cryptos like USDT run on ethereum's block chain . That is why almost every online smart contract you may do will always say something about ethereum . Due to this utility that it generates, the price of ethereum is almost always on the rise . This shows that utility is very important to consider in the crypto space.
Another thing to should keep you in mind about investing based on high prices is that investing based on price can quickly turn against you because of the fact that nothing goes up indefinitely as well as the rise and dump factor. Simply put, anything that rises will drop at some point whether by little or by much . Speaking on the rise and dump factor, we realize that they're are many online traders who buy crypto currency that are predicted to rise over a short period of time and once they rise to a certain amount, they cash out.
Where the risk could then be is that the price of a crypto at any point is influenced by the money that circulates around it. The more that money comes in, the higher the price will likely go especially if by institutions(recent surge in Bitcoin price when Tesla purchased huge amount). On the contrary, the more that money gets removed, the higher the chances that the price will fall.You can probably see where I'm going from here.
If you invest in a crypto that is fast rising and most of the people that invested early solely to make quick profit cash out, the price of the crypto will start to fall, and
your money automatically starts reducing. In most cases , you'll choose to wait and hope it goes back up so you could at least gain back your capital and then the price dips even more forcing you to cash out to avoid excessive loss. Although I know this is not always the reason for price fall, recently, it became one of the factors that contributed to massive loss of money put in by investors in the XRP community.
What actually happened was that the XRP investors were getting upset due to the SEC lawsuit that caused the price of the crypto to dip massively as it was seemingly approaching a dollar . Following the fact that GameStop stocks were rising due to the high buying rate, many in the community had come together to reason and decided that they would all buy large amounts of the crypto on the 1st of February to artificially pump the price up just like game stop and to cut the story short, it did go up from 20 cents to 60 cents.
Many people flocked in when the price started rising feeling happy that they were not going to miss out entirely and very unfortunately for them, the price literally began to dip . And in a few hours time it had nearly reached the 0.20 cents which was the price it began from to surge and in the process, many lost their money . Although nobody knows the exact reason, it was believed that many people sold after they made their profit and it contributed to the fall in price.
Nevertheless, not every coin will experience a sudden fall like that but you should remember that everything rises and falls from time to time and if you're not cautious, you could lose your money at any point.
(3). Not investing for the long term
You may have heard several times that is best to invest for the long term in crypto and may or may not have thought about that but I can personally attest that it's very true because most cryptos reach their full potential after a couple of years of their being used and not immediately . And so if you you sell off your crypto immediately you see a little price appreciation that seems a no brainer, you may unknowingly sell of a coin that would have gained massively over time and generated life changing wealth for you and your family and of course no crypto proves this more than Bitcoin.
Over the years, it has reached prices that anyone who had invested early in it would have felt he had made enough to cash out starting with it's five dollar increase in 2012 which was three years from it's release to a four hundred dollar increase in 2016 which is 7 years from it's release and to the 48k now approaching 50k in 2020 and the truth is that those who keep longer maybe to 2025 will make even more.
And so if you want to invest in a crypto you know has potential, try to keep it for a long time maybe a couple of years to ensure you don't miss out on a price explosion.
And remember , once it starts moving massively, you will not be able to buy the same quantity of the crypto you initially bought at the same price .You would have to spend more.
Anyways , I believe this article has given some of us something to think about when investing in crypto or added to what you had already known. Please comment on what else you feel should be considered when investing[/i] in crypto .Thanks for reading.
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For those people who believe in God but in evolution consider this.
You are lost somewhere in the woods of a foreign country and as you are trying to find your way out you come across a magnificent and tall building at that moment you conclude that someone constructed the house and you can only feel admiration for the person that would have constructed the beautiful house.Would it make sense to you if someone tried to convince you that all the parts of the house just appeared and started to piece themselves together?
Definitely no .Infact, you would bet your last dollar that it was carefully built by an intelligent person.
Now, the house we are talking about is just want, nails and stones and it as you would say could not just come together,how much more something as complex as our body?
Let's take our brain for instance it contains millions of cells and the information it can stores is Said to be able to contain millions of books worth of and many many computers. It sends out instructions to all other parts of the body to function properly while remaining co-ordinated and upon all it can do it's still an organ that can fit in our skulls
Scientists cannot dream of engineering anything close not even
down to something as little as a real skin or even an earthworm
If you wouldn't believe that a house just evolved despite it's relative simplicity, would you really and honestly say that there is no creator and something as complex as our body parts just came together and pieced themselves
Definitely not! All evidence points to a wise and loving creator
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When speculating on alt coins you don't just look at the current price or what people are saying
You try to dig deeper into the use cases of the coin
In my opinion the best altcoin is Xrp because it supports cross border payments and is very fast in transactions not to mention it's utility I many sectors
Utility is what more or less drives the price of a crypto because when it is used in various sectors like banking, health system, cross border payments and general trading the crypto has a higher chance of gaining more value over time
And so I really feel it has great potential in 2021 but others also have some very good potentials like
-Stellar(Used for facilitating cheap and fast remittance trasnfers between institutions and is currently used by flutterwave)
-Hedera hashgraph(Has the ability to help students have a measure of control over how their educational qualifications are displayed to colleges and schools they want to learn in while still allowing the school to take back their admissions when necessary
-Cardano-(can allow people to exchange t heir money for stocks and then ensure that those transactions are recorded on the block chain including the money used to purchase and the stock ownership)
-Ve-chain-(to be used in enhancing chain operations and regulates the flow of supply chain that are complex through use of distributed ledger technology)
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