Cryptocurrency Market Analysis and Tips for Investing

Cryptocurrency is a virtual currency, traded between or amongst peers that can be exchanged and used as money. Cryptocurrency is traded online – it is essentially electric money – but can be traded in for the U.S. dollar or other currencies.

Cryptocurrency is traded without any governmental or authoritative oversight (regulation, protection, issuance, storage, etc.), which is at least partially responsible for the digital currency’s incredible proliferation in 2017. Amongst the top-traded cryptocurrencies are Bitcoin, Ripple, Ethereal and LiteCoin.

However, that momentum of cryptocurrency charging past the U.S. stocks might be falling short as many of the major players took significant drops in mid-January 2018. The sudden drops have left investors wondering whether or not cryptocurrency is worth investing in and which outlets make secure investments.

The newer a currency (any item) is to the market, the more suspicion it raises around its longevity. For now, some authoritative voices in finance find the recent cryptocurrency drops to be indicative of future soaring.

Adoption of cryptocurrency

Brands outside of trading currencies are now designing their own cryptocurrencies to use as compensation for involved parties. For example, Eastman Kodak Co. (Kodak) launched its own cryptocurrency, KODAKCoin, to provide additional revenue to photographers. The brand extension evolved the Kodak brand and investors responded positively.

Millennials favor cryptocurrency

As cryptocurrencies maintain value, consumers value the currency more. Right now, the millennial consumer is looking favorably upon digital money. According to Forbes, thirty percent of millennials prefer to invest in cryptocurrency, a remarkable statistic given the currency’s recent emergence and millennials’ previous exposure to volatile economic conditions.

Whether you are diving into Bitcoin or holding back for Ripple, Quantum FBI has tips from the experts to guide your investments.

Remember that cryptocurrencies are capped in number

Unlike traditional currencies, cryptocurrencies have a cap on the number coins that can be in circulation. This means that supply is limited and inflation is more difficult to manage. This makes trading cryptocurrency coins more like trading a commodity than like trading a currency, requiring that it keeps its value and that its market of investors remains interested. It also means that a coin’s price tag is not as important its value in market share.

Invest in select, well-research cryptocurrencies

Avoid pouring a small amount of money into a wide range of cryptocurrencies. Instead, hone efforts in on one cryptocurrency whose cap and offerings make the most sense for your goals, then fragment and disperse funds in the next most promising coins.  

Measure cryptocurrencies against dollars

Throughout investments, the values of cryptos within their currency families will change. It is best to always measure your crypto values against the current USD value. This will help you gauge how your investing is fairing. However, each crypto coin should also be measured against that crypto’s currency value. If you plan to invest in a cryptocurrency longterm, then the value against US dollars might not matter as much in the short-run. Monitoring both values throughout your investment term is smartest.

Refrain from profit extraction

As tempting as it is to pull money out of this volatile cryptocurrency market turns dramatically up (or down) in your favor, do your best to leave your money where it is. Unless you have circumstances that perpetuate a need to move funds, the dramatic ups and downs should be viewed as temporary and nothing from which to base decisions.

Although cryptocurrencies took some low hits in early 2018, the momentum around the digital currency is still healthy and looking promising.

To better understand the current cryptocurrency market analysis and whether or not an investment makes sense for your goals, reach out to our team at Quantum FBI. We are well-versed in today’s digitized currency and look forward to helping you understand all variables before entering the market.