Bitcoin seems to be headed into yet another price crash. To the average person, this is just more evidence that Bitcoin is a failure and investing in it is a fool’s errand. But to experienced investors this may well be the biggest opportunity of the year. This is because the recent bull run in late April was an indicator of how prices will react to a future bull market. And with unleashed institutional investment, Bitcoin can easily reach up to $50,000 or more. However, in order to capitalize on this opportunity, buyers must have an investment strategy. Buyers must have a clear understanding of the market, the coins, and their own goals. Personal research is critical to making a sound decision; and with the increasing number of coins and ICOs, it is easy to invest in the wrong project. Investment choices must offer great returns, have a solid fundamental, and a clear purpose.
Return on Investment
Everyone who invests in cryptocurrency is in it for the money. Bitcoin inadvertently opened the door for the average person to become a trader. And anyone has the opportunity to earn returns that would normally take decades to achieve with mutual funds, CDs, or Roth IRAs. The number one rule to investing is buy low, and sell high. In April 2017, this was not hard to do;
Bitcoin costed $1,200, Ethereum $43, Ripple $.03, Litecoin $10, and Dash was $62. All these coins became notorious and their value exploded. Most Altcoins followed suit and in most cases the best coins now cost more. Therefore, investing in them is not the best idea as the profits have been made. So in order to make the most money, the better choice are coins that cost two cents or less ($.02). Having said this, one must find cheap but not rubbish coins.
A good coin has value when it has a good concept, a good team, and a well defined roadmap. It must also have a clean image in the public’s eye. For example, the Verge (XVG) is a coin within the two cents range and below, which makes it a prime target investment. However, despite the hype created by the endorsement of John McAfee on December 2017, the project is tainted by a myriad of setbacks, hacks, and PR disasters. Making investing in it somewhat questionable. On the other hand, Ziliqa (ZIL) introduced the scalability concept of Sharding, has a team composed of scholars, and after being added to Binance, it’s price jumped from $.03 to $.21. That’s a 7X gains in a month. A $1,000 investment at $.03 would have yielded $7,000. Therefore, choosing a coin like Ziliqa during this market dip could results in much higher returns as it would not be unrealistic to assume it could reach $.30 to $1.
The investor must have a well defined purpose. Is the objective to HODL or flip the investment. This will also aid in narrowing down the choice of coin. EOS, Ethos, and Bitcoin represent the future of the crypto industry; EOS is poised to replace Ethereum as the platform of choice for Daaps. With its user friendly interface and atomic swaps features, Ethos will become the universal wallet. And with a successful implementation of the Lighting Network, Bitcoin is the popular choice for the coin to use by all. Therefore, coins like these (and others like OmiseGo, Steem, and Cardano) are a safe choice for long term investment.
It is always hard to decide when hard earned money is being waged on buying crypto currencies. With volatility, speculation, and price manipulation being an ever presence in the market, future prices can’t be predicted with absolute certainty. Nevertheless, based on the rising interest of institutional investors, it is not illogical to assume that the market has a strong potential for growth. And that this price decline is just another cycle that will be followed by an upswing that if timed correctly can deliver with substantial short term profits.