Since Bitcoin was introduced to the global community in 2009, many people for one reason or another may not have fully grasped the concept of virtual currency an have been largely hesitant to take advantage of this lucrative emergent market. Whereas some critics described various reasons as to why Bitcoins would fail, other have showed remarkable optimism towards their growth without a slight idea why they should invest in cryptocurrecny and what proceeds they could generate from such investment. Contrary to the above mentioned, both groups of investors silently and boldly took up the idea and put their finances into the coin.
At the time of writing, single Bitcoin sells for over $8500. The most startling fact is that some of the very first recorded Bitcoin exchange rates were estimated below $1 as of October, 5th, 2009, when history marks an initial exchange rate of 1,309.03 BTC to One USD. Bitcoin’s price in 2010 was still lagging at $0.39 as its highest price, which never exceeded the $1 mark. Sounds too good to be true but if you had purchased one single Bitcoin in 2010, you would have amassed an extraordinary gain of 8500%, getting unmatched profits regardless of whether the Bitcoin value surges or falls.
The concept of virtualization of money has its early models linked to platforms like PayPal. However, cryptocurrencies came up with a completely different idea of money digitization, totally virtualizing money in the most exciting ways that have never been achieved.
After the inception of Bitcoin, there emerged other alternative digital currencies like Ethereum, Dogecoins, Litecoins, and hundreds of others.
What is the best cryptocurrency to invest in? How can I invest in the best cryptocurrency?
If you happen to be an investor, you are probably looking for what cryptocurrency has the best potential, or you may be wondering “what are the best cryptocurrencies to buy now?” The cryptocurrency space is such a dynamic one, in that a currency which is highest in the market today may be dying by the time you wake up the next day. This means that investors who identify a cryptocurrency that will survive in the future and put their stake in the currency’s startup are the ones likely to reap big.
As an investor, there are some concerns that if well taken into account will guarantee you get the most significant Return On Investment (ROI). Here are some parameters that will help you thoroughly scrutinize the cryptocurrency market for the best potential investment:
The purpose of the cryptocurrency
After the introduction and regular use of Bitcoins, investors realized that different challenges were facing the first cryptocurrency. This realization led to the development of altcoins who strived at solving the issues that taunt Bitcoin. The purpose of the digital asset is one of the essential factors to consider because it defines the continuity of the currency, its survival into the future.
Besides just serving as a trading asset, a good digital currency should be focused at solving specific problems encountered by other existing forms of cryptocurrencies; may it be the problem of security, privacy, the speed of transaction, transaction fees, global acceptability, etc. For instance, Monero was launched with the purpose of providing the strongest privacy levels whereas Ethereum was developed to expedite smart contracting.
The technology driving the cryptocurrency
When you hear about a popular cryptocurrency, do not be too keen to purchase it without knowing which technology is driving its various functionalities. Go as far as searching for the whitepaper describing the technology driving that particular virtual asset.
The developer community of the invest cryptocurrency
Top virtual currencies have always had a community of good developers toiling painstakingly to keep things updated and new. You wouldn’t want to invest in a cryptocurrency whose developers are good at sitting on the fence. A hard-working developer community increases investors’ confidence since their efforts alleviate the various risks that might hamper the future existence of the digital currency.
The market capitalization of the cryptocurrency
Instead of rushing based on the price of a particular cryptocurrency in which you want to invest; it is worth contemplating both the price and the market cap of the currency as a whole. The market capitalization is evidence of investors’ confidence in a given cryptocurrency. To know the market capitalization of yourcryptocurrency, you merely need to take the currency’s supply and multiply it by its current price.
A good illustration of why market cap matters can be picked from Ethereum (ETH) and Bitcoin Cash (BCH). Ethereum currently sells at $639 with an evaluated market cap of $63billion and a circulation supply of 97,210,497 ETH. On the other hand, Bitcoin cash sells presently at $1,804 with a market cap of $30 billion and a circulation supply of 16,923,825 BCH. This estimation merely indicates that Ethereum is more future-proof than Bitcoin cash; its acceptance rate is higher in comparison to BCH.
Is it profitable to invest through ICO ?
Have you ever heard of Initial Public Offerings (IPOs)? In the conventional financial world, corporations have the liberty to obtain funds from venture capitalists, and investors, nevertheless, when they can not get enough funds to expedite their projects, are left with the alternative of going public.
During the IPO, the private organizations puts up their private shares for sale to the general public. At this time, the shares are very affordable and have the possibility of surging in price and making future millionaires. You must have heard of situations where someone invested some dollars only to turn into a multi-millionaire over a period after their shares grew into excessive maturities.
It is from the IPO’s concept that many stakeholders in the cryptocurrency world started querying whether the same idea can be applied to cryptocurrencies. As a result, they came up with ICOs, which share a few similarities with IPOs but unique in their way. The main differences between the two are that ICOs are decentralized whereas IPOs have central governing agencies; also, unlike IPOs which are heavily regulated, ICOs are unregulated.
ICOs and Tokens
When you are interested in a particular cryptocurrency project, you can gain access to it by sending the developers some amount of digital currencies and get awarded an equal amount of tokens. Since the introduction of Ethereum, the issue of tokens has been earning influence in the cryptocurrency space.
There are two types of tokens connected to cryptocurrencies ICOs, which are Usage Token and Working Token. A Usage Token serves as a native currency in their distinct environments and can be exchanged for other cryptocurrencies and fiat currencies. A Working Token provides the owner with several rights in their digital currency environment.
How do ICOs work?
– Since first impressions count a lot, the developers of a particular cryptocurrency will declare their intention to draw interest to whatever they thought to develop.
– They will create a document (White Paper) that highlights every distinct feature of their project and put it forward to several members of their community to get more opinions and backing.
– After getting some solid support from members of their community, the developers are now free to put up tokens which they will trade for Bitcoin or Ethereum. Based on the principle of supply and demand, the tokens will be of a limited supply to boost their demand.
– Also, the developers will have to determine the amount they want to charge for each token, which usually is very low.
– After they get their tokens and charges ready, they will decide on the best time to hold their Initial Coin Offering.
– Ultimately, they will choose a platform where they can make their ICO go public by showcasing it.
Precautions to take while investing in ICOs to avoid getting scammed:
When it comes to ICOs, you should only fund what you know or can understand. This is due to the unregulated sector ICOs. Since you were probably wondering about what cryptocurrency to invest in, and you would want some assurance on Returns on Investments when you finally invest in one, some hints to the right places where you can put in your cryptocurrencies investments are:
– The developer of the project should clearly define its purpose. MIOTA is an excellent example of one of the most clearly defined cryptocurrency projects.
– The project developers must not be some people with unknown identities. They should give top-notch clarity on their details such as names, business plans, physical locations, etc.
– There should be a distinctly defined legal framework between the project developers and the ICO investors.
– If the ICO funds are being put in an escrow wallet, then that is an excellent potential investment. An escrow wallet is a multisig (multi-signature) wallet that needs multiple keys before the funds can be withdrawn.
Pros and cons of investing in cryptocurrencies ICOs
– ICOs present opportunities for promising projects that can build a fortune for investors. A good case is Ethereum which surged in value to being the second most dominant virtual currency in the world.
– ICOs do not need extraneous paperwork which serves typically as severe bottlenecks to many promising projects.
– ICOs provide a good framework for exposing many cryptocurrencies and related projects that have the potential of positively influencing the way people manage a business.
– They present investors with potentially valuable projects. For instance, during its ICO, Ethereum was exchanged at approximately 36 cents per Ether. Currently more than one thousand dollars.
– As a result of various ICOs successes, developers have been moved to come up with even excellent ideas which they realize through ICOs.
– ICOs are highly speculative, as there are more of gambles.
Despite holding high hopes for the success of their projects, the developer has no idea whether the ICOs will ultimately work out or fail.
– They attract many scammers since there is not much paperwork.
Some developers can even proceed to omit specific vital and binding details from their whitepapers to protect themselves from blame when their ideas fail.
Cryptocurrencies that made millionnaires
Ethereum: Unlike most virtual currencies, Ethereum, which is probably the top cryptocurrency to invest in 2018, has been getting appraisals from its investors consistently. Its achievement is associated with the speed at which the coin’s network processes transactions. During its initial release in 2015, Ethereum sold at about $0.275 per Ether. The price of Ether has continuously grown to a current figure of $1082 for an Ether. Assuming you bought $100 worth of Ether in 2015, you could now be almost $353,083 richer.
Bitcoins: The pioneer digital currency sold at below one dollar, around $0.39 in 2010. Though facing some challenges, its current market value holds at $8500. If we had invested $100 worth of Bitcoins in 2010 initially, we could currently be celebrating unmatched benefits of about $2,000,000.
Litecoin: Litecoin is an excellent option to consider if you’re contemplating which cryptocurrency to invest in 2018. It was launched into the cryptocurrency space in 2011. On 27th, November 2013, the value of Litecoin held at $28.40, a 400% increase from the time of its introduction. If one had invested $100 into the Litecoin market in 2011, that individual could be currently almost $238,028 richer, seven years from the time of Litecoin’s initiation.
Promising cryptos for 2018
We believe there is a good chance Ethereum will boom in 2018. Having reached a staggering 13000% gain in 2017 (while Bitcoin gained 1500%), we feel safe to assume the race will carry on. As of writing, Ethereum price is equal to 928.38 USD per coin. While it fluctuates wildly on the daily basis it successfully passed the $1000 mark on January 4 and has recently reached a total market capitalization of $129 billion, surpassing 50% of total Bitcoin capitalization which stands at $249 billion. For a long time Bitcoin had kept total market dominance in terms of market capitalization, rarely falling below 50%. Now, it’s share has dropped to historical low of 40% so chances are Ethereum will gain Supremacy in 2018.
Many tech giants are coordinating effort and put funds into Ethereum, Microsoft and Intel to name a few. Add to this many ICOs ( Initial Coin Offerings) based on Ether blockchain launched in 2017 and many more likely to come in 2108 and you get a clear picture of where the Ether price will likely head. As such, taking into consideration an abundance of projects running on Ethereum network, we feel positive Ether will be a good investment choice in 2018.
Ripple payment network saw a big rise in 2017. Ripple is a gross-settlement transaction network based on secure open-source web protocol. It provides increasingly faster and safer transaction methods and issues its own cryptocurrency called the XRP(ripples) . Ripple made instant money transfer between banks possible, making them faster cheaper and safer.
Many banks, including Credit Agricole and UniCredit have teamed up with Ripple, and more are very likely to utilize the technology in 2018. With positive sentiment surrounding ripple, Ripple’s XMP tokens are likely to get huge price boost in 2018. As of writing, XRP is at $1.04, with market cap of $40 billion.
A sophisticated blockchain coding algorithm similar to Ethereum. Contrary to the latter, Neo supports popular programming languages like C# or Java while Ethereum developments is based on in-house language which raises the bar for new developers. Being the first blockchain network in China, Antshare has a huge potential to attract many investors in 2018.
On the other hand, many investors will skeptical about Antshare as it is based in China. Worries about potential crackdown on cryptocurrencies by Chinese government is main cause of uncertainty. As such, we believe that fundamental factors should be deeply analyzed for better understanding of its potential price directions. It’s market cap has recently hit $10 billion.
What happens after investing and reaping big in cryptocurrencies?
Traditionally, if you have made some profits from investing in IPOs, the gains are transferred into your bank account after which you can determine what to do with them. The case is almost comparable to what happens with earnings reaped from digital currencies investments.
However, the reliable way to secure your virtual currency profits is by saving them in facilities called wallets, where you can use them to purchase goods and services, trade them for fiat currencies or other altcoins, or even send them back to different exchange platforms for reinvestments.
In case you feel that the profits you made are not enough, you can start selling your digital assets on different exchange platforms for other fiat currencies or altcoins. The proceeds made from the sales can then be reinvested in other potential startup cryptocurrencies or spent any way you like.
To Sum It Up
Investing in cryptocurrencies is such a speculative but profitable venture if well managed. If you want to invest in digital currencies, you should boost yourself with substantial background information which will act as the best pointer of whether you are most likely to reap big shortly.