Ups, Downs, Twists and Turns: Is it still safe to invest in cryptocurrency?
Recently I’ve been speaking a lot about how far the cryptocurrency market has come – and the fact that the market cap keeps rising and rising. It seems for years there’s been nothing but good news, with many recently predicting cryptocurrencies imminent emergence into the mainstream.
And then, there was an almighty crash… two days ago, cryptocurrency came tumbling back to earth, with $21 billion wiped off the cryptocurrency market.
There’s plenty that can be learned from this event,and more so from the days since.
So let’s take a look at the latest mammoth twist and turn in the cryptocurrency market, explore whether this should be taken as a warning to invest in cryptocurrency and finish with some 2017-ready tips for the newbie crypto investor in current times.
The 28th July 2017 – One ear-shattering crash for Crypto
It was a crash unlike any seen previously – during a single day $21 billion was wiped from the market in one fell swoop.
But what was behind it? As we now know, the cryptocurrency Ethereum slid down in value by a staggering 20%which would then go on to create ripples throughout the market creating a flash crash felt by all. When we dig a little deeper however we find that it was actually an unfounded rumour about Ethereum’s founder that set the uncertainty off a rumour about his death, no less, which was later proven to be completely untrue). The ongoing effects of this crash could have been catastrophic. Except they weren’t. The market pretty rapidly bounced back (within a couple of days), with key currencies including Bitcoin and Ethereum recovering and now climbing steadily once more.
There are some saying that this should serve as a warning – Do they have a point?
There are some naysayers out there who warn against adopting a ‘gold rush mentality’, in which individuals act like lemmings on mass – investing (unwisely) and putting their savings at risk. So, to the question – do they have a point? In a word, yes. Education is important when it comes to cryptocurrency – investing blindly is a fast track way to losing money, big time. And cryptocurrencies DO fail – SpaceBIT, GEMS, Dogecoin, Paycoin and Dao, to name but a few. So my first and most important tip (before we even dig into my tips for 2017) is to embrace a continual learning curve when investing in crypto you can never know too much, and there is no truer a phrase spoken than “knowledge is power” when it comes to the crypto arena.
Tips for crypto newbies in 2017
- Begin with the technical terms
Blockchain, mining, encryption it’s a confusing world out there unless you’ve gotten a basic grasp onthe key terms. Thankfully this resource from pCloud provides an extensive rundown of the ten cryptocurrency terms you need to know when setting out (in relatively plain English!). And don’t worry if you feel overwhelmed at first – stay with it and you’ll soon find yourself getting to grips with the words that matter.
- Engage in forums and communities
There are plenty of buzzing communities out there to get involved in and when Google lacks any sort of concert answer for your cryptocurrency questions, you’ll have others you can turn to you should you also feel free to get in touch with me if you have a burning crypto query or simply fancy a chat about the market as it stands).
- Buy low… sell high
This is a golden rule that holds true – never hold onto a rising cryptocurrency believing that your luck is in for eternity. With gains made you should cash out and move onto the next purchase. If you’re thinking that this means purchasing Bitcoin is today a no go given that its current value is sky high, at £1945) you’d be right.
Whilst Bitcoin will likely still rise (as well as inevitably suffer some falls) it is already at a super high value and it’s incredibly unlikely that it could possibly see the same surges that have previously created millionaires overnight.
- Stay up to date with all that’s happening in the market
Keep your eyes open and your ears to the ground – follow crypto experts, sign up to newsletters from trusted cryptocurrency blogs and regularly look for fresh opinions and industry voices who seem to be right more often than not.
And don’t just track news on the currencies you’re invested in or considering – some of the largest currencies have overall sway on many others (with the comparatively smaller of currencies,
known as Altcoins, always impacted by massive rises or falls in currencies such as Bitcoin and Ethereum). The market crash just a few days ago is the perfect example of this in action – and during troubled times such as these it’s better to wait for the market to stabilise before you forge ahead with any investments.
- And finally – above all else… never, ever invest more than you can comfortably afford to lose
This piece of advice applies to all areas of investment – whether ploughing some savings into bricks and mortar, or investing in crypto. You should only ever invest amounts that you could survive without.There will always be risks you need to protect yourself against them come what may.
The cryptocurrency market can be confusing for the newbie and the unpredictable nature of can shake even the most seasoned of investors at times.
If you’re considering taking the plunge and investing in this exciting market, you could do with some easy introductory education.
– putting you through your paces minus the jargon, free from the confusing complexity of technical terms. If you want to know whether you’re too late for the cryptocurrency boom, how you should approach investment and why millionaires are still being made,