How to correctly choose an object for cryptocurrency investment and make profitable investments! Methods, tools, their features, relevant explanations and recommendations

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Cryptocurrency investment tools in light of the current situation provide extremely promising opportunities for users to earn decent money relatively quickly.

Yes, investing in cryptocurrency is a risky venture, but if you understand the nuances and competently approach the implementation of the idea, then most of the dangers are minimized. Many, seeing the real profitability of investing in crypto coins, are trying to get a profit on this, however, not every investor understands even the basic basis of this method of capital increase.

Let’s consider in detail the methods of investing in the cryptocurrency sphere, their features, varieties, and useful nuances.

Crypto Investment Aspects

Any well-made investment today is the core of financial well-being. When everything is done correctly, you can leave the worries about unplanned sick leave or spontaneous reductions. Will support and possibly fully provide a comfortable life for a working investment. Often, many successful investors abandon strictly regulated work in government institutions or firms altogether, leave early from business to do their favorite chores.

In late 2016 and early 2017, many professional investors and their conservative counterparts made an informed conclusion that it was time to expand their portfolios with entrenched cryptocurrencies in the financial sector. However, two aspects need to be clearly recognized here:

✅  Any cryptocurrency, while maintaining its current features, will always be a risky business. Cryptographic money is now a super-profitable asset on which many make capital. At the same time, it is a dangerous instrument, fraught with uncertainty of prospects and unpredictability of price behavior.

Advice! Virtual currencies first need to be approached carefully, using such an investment portfolio as an additional set of financial investments!

Experts recommend that the volume of investments be formed based on the tactics used – with an aggressive strategy, it is allowed to invest in crypto money up to 19-20% of available finances, and for a moderate one – no more than 10%;

✅  You need to remember about diversification. When investing in crypto coins, then the allocated amount should be smoothly distributed over several promising assets. You can’t direct everything to bitcoin. It should today be the basis of an investment crypto portfolio, however, one should not forget about other top cryptocurrenciesethereum, dash, ripple, monero, etc. You should add younger, but expectedly promising coins – verge, steem, lisk, bytecoin, etc. this is all necessarily calculated for the long term. The table shows the statistics of the profitability of some cryptocurrencies for 2017. Ripple is up 24799%, DASH – 9901%, Ethereum – 8867%, Litecoin – 5569%, Monero – 2597%, Bitcoin – 1397%.

Varieties of cryptocurrency investments

If you correctly consider investing in the cryptocurrency sphere and technologies related to the blockchain, then you need to clearly distinguish between the sectors that are most suitable for investing funds. The following gradation is offered:

✅  Financial instruments – this category provides for long-term or short-term investments, as well as conversions.

✅  Technical projects directly or indirectly related to virtual currencies.

✅  Crypto business is an activity in which it is supposed to work with crypto coins as part of another profitable activity.

✅  ICO – financial participation in the development, release and promotion of some new crypto projects. In principle, this is a complex version of the investment direction, consisting of their previous varieties, but it is advisable to consider ICO separately.

So, let’s analyze these directions in more detail.

Investing in virtual money and cryptocurrency projects

Financial instruments are a large area of activity, including the operation of electronic currencies existing in the cryptocurrency market. There are three subcategories:

  • Conversion (exchange operations) is the most straightforward activity in which you can good make money on cryptocurrency. It is necessary to analyze different altcoins and exchange them for fiat money, thus forming your own personal portfolio of a crypto investor.
  • Active trading (speculation on cryptocurrency exchanges). This is where the process of investing is transformed into real work. In fact, the first investment here is to replenish the trade balance on the crypto exchange. The rest of the actions are purely technical and speculative. Of course, any type of cryptocurrency trading on financial platforms requires some specific knowledge, skills and perseverance. To achieve success, you will need at least a short study of the basics of trading, technical analysis, fundamental research of the crypto market and money management. If you organize everything seriously and efficiently, then trading will bring a solid profit.
  • Long-term investment. Here, in any way (trading, simple conversion), an investment crypto portfolio is collected from various promising cryptocurrencies, in which assets are stored until a favorable moment for their sale. Naturally, regular monitoring of the market situation will be required in order not to miss the beginning of a strong collapse of some digital coin.

Technical projects. First of all, experts include mining and any developments related to the process of mining crypto money. This activity is serious, big business, if we consider it as a source of stable, good profit.

The mining process is the extraction of cryptocurrency using the power of a PC, special blocks from video cards or a well-organized crypto farm. Every month, this option of earnings becomes more complicated and requires the injection of large capital, but the return on such investments is steadily increasing. It is supposed to purchase special ASIC devices or form blocks of their individual elements.

In any case, the principle of making money is simple:

  • Investing in the creation of computing power.
  • Finding a room, its equipment and professional setting up of blocks of a mining farm.
  • Control over the production of crypto coins and their subsequent use (sale of crypto currency, storage in crypto wallets or exchange).

You can also indirectly participate in the creation of new, more modern devices for mining. There are special portals where developers, in exchange for a share of future profits from the sale of parts, raise funds from investors to organize research and start releasing new devices.

Nuance! You don’t have to assemble the farm yourself, as this is a difficult idea to implement. You can use an alternative, for example, to do cloud mining. Here you need to rent computing power and use it in the paid period. Mining the necessary crypto coins!

Crypto business. This method of investing is similar to mining, however, it differs significantly from it in its focus on business. Any projects related to the cryptocurrency sphere are assumed here – from the development and release of your own altcoin, to the opening of an online exchanger or cryptocurrency exchange.

This also requires a solid initial investment. You need qualified programmers, an attractive domain name, service administrators, technical support, advertising – in general, each crypto business has its own expensive elements.

Participation in the launched ICO. An ICO on the cryptocurrency market means the release of tokens of a certain cryptographic project that already has a development plan, but the organizers do not have enough funds to implement ideas.

Explanation! Tokens are “inferior” cryptocurrencies not fully developed. They are not present in the virtual currency market, but they have a certain value. Their cost is determined by the prospects of the planned project and the potential for future improvement!

There is an initial placement of coins so that investors can buy them, thus investing money in the presented program. After the completion of the initial stages and the official presentation of the project, tokens turn into a cryptocurrency, which enters the market and starts to rise in price if the developers fulfill the previously announced plan. Investors have in their hands profitably purchased coins, which will rise in price under favorable circumstances.

Of course, the risk of ICO failure is great. Also, fraudulent schemes of this kind are not uncommon. You can lose your invested money. If everything is fine and the project is actively developing, gaining popularity, then the income from investment soon begins to exceed many hundreds of percent. It is important at the initial stages to correctly identify a really useful, promising project with creative ideas.

Conclusion

Any option for investing in cryptocurrencies and blockchain-based technologies is potentially very profitable. The main thing is to do everything right, carefully analyze even the smallest nuances, understand, at least superficially, modern technologies and monitor the dynamics of changes around existing assets or investments in the crypto business.

It should be remembered that there is a high volatility of crypto assets in the cryptocurrency market, which can bring hundreds of percent of income even for 2-3 days. It is also possible that prices roll back to low levels. Therefore, timely profit taking and rebalancing of the investment crypto portfolio is required!

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