Investments in Cryptocurrency – Guides on Best Coins to Buy in 2020
As implicit from the name, cryptocurrency investment is the purchase and storing of electronic or virtual currencies in order to resell them in the future for profit. As with other kinds of ventures, your decision to trade on digital currencies should arise completely from your free volition without any compulsion. Consequently, you are held accountable for its outcome whether it is bad or good. Thus, it is up to you to make up your mind on whether to go into it or not.
However, this does not suggest that you don’t have to seek expert advice regarding the best cryptocurrency to deal on. Before you start an investment in cryptocurrency, it is essential that you determine and list your investment objectives and discuss them with a profession before you start executing your plans towards their achievement.
Here are some pertinent questions to ask yourself as their answers will not only inspire you but give you the fortitude to swim against the current in difficult moments. How long will you like to hold your coins before reselling them for profit? What amount of cryptocurrency can I purchase?
Strategies of Wise Investing
Normally, property and stock investors take their time weighing the pros and cons before they decide to put their money. In the same vein, you need to determine and have a good grasp of your investment objectives and well-thought-out plans on how to realise them. The length of time to hold your investment and the amount that will make a good profit for you should all be clear to you.
Similarly, before you go into electronic currency investments, it is essential that you take the above factors into consideration and make your plans on how to have a fruitful deal. You risk running a loss if you go into the trading of virtual money without a strategy. Here, we are going to talk about two major kinds of cryptocurrency investment plans.
Short-Term Plan
This is a type of investment in which the buyer allows the investment to stay for a short duration of time before reselling it for quick gains. The investor will only have to wait for a few months or even for minutes, days or weeks before vending it for gain. Not all cryptocurrencies are good for this plan. Here are some factors to take into consideration:
- the amount of money you can bear a loss in the event of an abrupt drop in the price of your coin;
- the chance and readiness to study and monitor the digital currency markets and read its news always to know the goings on in the market;
- your ability to technically evaluate the electronic cash market or willingness to learn how to do this before venturing into the market;
- the liquidity of the coin;
- commission and fees charged for withdrawal of gains;
- having a significant capital to get started.
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1. The opportunity to make a considerable profit in a short timeframe. Many people have become rich by using this strategy |
1. Monitoring the market can be stressful and time-consuming |
2. When losses occur, they don’t take a significant portion of the investment money |
2. A sudden huge drop in price can result in considerable loss and emotional trauma |
3. You have access to money to go into other things and not just locking your it in one investment |
3. The volatility of the cryptocurrency market makes it a very risky investment |
4. Have high liquidity |
4. Fees for withdrawal may be high |
Practical Guide on How to Use the Short-Term Strategy
The target here is to purchase and sell, for example, ETH as quickly as possible to make the profits. The reason for this is because the Ether price fluctuates on regular basis. So, you need to be quick in all your transactions here. The major factors to consider assuming you want to invest in Ether in CEX.IO on a short-term basis are:
- The available pairs and their conversion rate, for example, BTC/ETH, USD/ETH, EUR/ETH and the likes
- Transaction processing time: just like other altcoins, Ether is volatile, if you are going to buy it and keep it for a short period, it is important to ensure that deals are completed quickly. In this way, you will not be caught you by any downward movement of the price.
- CEX.IO does not charge high fees and this is important for you to make more gain.
- Remember not to use an amount of money the loss of which will result in an emotional instability.
Long-Term Plan
This is a type of investment in which the trader keeps their coins for a longer period of time with the intention of reselling them when the price increase considerably during these periods. The minimum timeframe to hold an investment in electronic currency for it is between 6 to 12 months. However, there are some people that can leave theirs for a longer duration of up to 5 to 10 years.
Here the features of a good crypto for long-term investment: large market share, the utility value of the coin including large users’ market, impressive transactional volume. Determining the particular token to invest becomes easier if you factor into these:
- Enhanced technology: go for a crypto coin that has more advanced technology than those of their rivalries.
- Founding team and developers of crypto with a wealth of experience.
- Take time to assess the future plan of the network of a coin to determine how feasible and realizable it is.
- Decide on whether to sell when the price shoots to a certain level or at after keeping the investment at the specified time period.
- Choose whether to sell your investment bit by bit or all at once.
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1. Lower fees: No worries about charges and transaction fees as trading is not carried out on daily basis |
1. Low liquidity: This means it is not something that can easily be sold and therefore one cannot rely on it to meet basic needs and pay bills like hospital and power bills |
2. Lower starting capital and significant gain: You can begin with a small amount and keep adding to it to enlarge your investment. |
2. Risky venture: from the point of view of crypto volatility, it can be a risky enterprise as the price can fall drastically over time and never rise again. A loss can be a big blow with great impact |
Guide on How to Invest in Crypto in the Long-Term Program
If you want to invest in NEO on Binance for a long period of time for example, here are tips to help you get started.
- Ensure that the trading platform has a secure system for your investment which you planned to leave there for a long period of time.
- You don’t have to bother yourself about quick transaction processing time, it is essential that you put your money in a platform that has established reliability and reputation in the industry for a peace of mind.
- The transaction rate of reputable sites like Binance is somewhat higher than those of others but this is not something to worry about if you’re ok with the security of your fund.
- Furthermore, purchase and keep your NEO from a site that has cold storage to enable you to hold your token for a certain period of time.
- Charges and fees of the network you will trade on should be considerable or even lower as it is the case with Binance so that you keep much of your gain.
Market of Cryptocurrency Today
The digital coin market began in 2009 with the introduction of Bitcoin which still has the largest market cap put at 450b USD. But today, about 3,000 electronic currencies have been introduced. Despite the claims of the developers of these coins, a good number of them never survived the competition in the market and there are still some that were not brought to reality. As found by Deloitte in a study, up to 92% of altcoin forked in 2015 were a failure. Some of the successful ones are doing good in the market but none has become as acclaimed as Bitcoin. In the light of the above, one has to make a choice of digital coin to deal on with the high level of diligence and caution.
Bitcoin
Bitcoin is an electronic currency and the first of its kind that is not controlled by any central body. The code for bitcoin coin is BTC. It is the most popular token with the largest market volume and capitalization. It can be used for the payment of bills such as hotel tickets, furniture, and others. Though it is yet to be legally accepted in many countries, it has acquired a legal status in Japan. B-coin is generated via mining which involves the utilization of a computer in solving complicated math puzzles.
Exchanges |
Currency |
Payment Option |
Fees |
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Only cryptocurrencies |
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0.1% trading fees |
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Local currency or any currency preferred by the seller. |
Bank transfer, plastic card, various online payment options like BP |
Bitcoin network transaction fees which are determined by current usage |
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USD, EUR, GBP |
Visa, Mastercard, Bank transfer |
No commission for bank transfer, 3.5% for cards |
Ether
Ether refers to a distinct token/code utilized to make payment for the computational resources which developers or programmers required to run a program or apps in a system that supports the functionality of Ethereum. Unlike BTC, ether is designed to power the blockchain of ETH and not to be used a unit currently for payment of bills. However, it is popular on cryptocurrency trading markets with the second largest market cap. Ethereum network generates the blockchain of this token which is transferable from one account to another.
Exchanges |
Currency |
Payment Option |
Fees |
|
USD, EUR, BTC |
Visa, Mastercard, Bank transfer |
No commission for bank transfer, 3.5% for cards |
|
USD, EUR, GBP |
Bank account, debit cards, wire transfer |
Euro transactions – 0.15Euros for the bank transfer, when in the US – $10 charge) |
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USD, EUR |
3D-secure plastic cards |
0.5% |
Ripple
Ripple was introduced in 2012 by Ripple Labs on the same principle of decentralization of transactions which other coins operate on. But it operates in a different manner serving as a system or network for remittance, currency exchange and settlement platform that relies on the shared public database rather than on proof-of-work. Ripple has its own currency represented as XRP but through the exchange, one can swap any currency including airline miles, gold and others.
The major features of this token include the following:
- Liquidity
- Scalability
- Almost zero fees
- Instant transaction (settlement finality)
- Growing ecosystem
- No centrally controlled ledger
Exchanges |
Currency |
Payment Option |
Fees |
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USD, EUR, BTC |
Visa, Mastercard, Bank transfer |
No commission for bank transfer, 3.5% for cards |
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BTC, USD, JPY |
Bank transfer, plastic cards, cash deposit via certain offline stores |
0.15XRP |
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Rupiah, BTC |
Wire transfer, EasyPay |
0.3% |
NEO
Nicknamed the Chinese Ethereum and previously called Antshares, NEO is a Chinese next generation smart economy platform that aims at smart contracts to provide non-digital assets with a digital and distributed platform that has no central control. Though it has similar basics with eth, its creators try to come up with a blockchain algorithm that functions better than that of ETH. NeoContract which is the smart contract system makes it possible for a developer to utilise a number of popular programming languages such as NET, C#, and Java which gives it an edge over Ether.
Exchanges |
Currency |
Payment Option |
Fees |
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All currencies |
Visa and MasterCard |
5.90% |
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USD and EUR |
SEPA and SWIFT |
1% on takers |
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Only cryptocurrencies |
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0.1% trading fees |
Monero
Monero is a decentralized cryptocurrency which makes use of unique cryptography to prevent any trace of all transactions. Also known with its currency code XMR, this network came into existence when the blockchain of bytecoin was forked. Initially, it was named bitmonero and later, the name was shortened to Monero which is an Esperanto word that means coin. Only two of the 7 members that head this network are known. The major features are its fungibility, scalability, ASIC resistant, multiple keys and complete control of owners over their transactions.
Exchanges |
Currency |
Payment Option |
Fees |
|
USD, EUR, GDP |
Visa, Mastercard, Bank transfer |
No commission for bank transfer, 3.5% for cards |
|
All currencies |
Visa and MasterCard |
5.90% |
|
USD, EUR, GBP |
Bank account, plastic card, wire transfer |
Euro transactions – 0.15Euros for the bank transfer, when in the US – $10 charge) |
Cardano
Cardano is both an altcoin and a technological platform which has the features to run financial apps presently utilized globally on daily basis by individuals, private and public institutions and government agencies. The coin for this network is called Ada. Apart from running this crypto which has no central control, the network also deals with smart contracts, decentralized apps and other services executed on a blockchain.
Exchanges |
Currency |
Payment Option |
Fees |
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USD |
Credit/Debit Card (+ Diner’s Club), Paypal and Bank + Wire transfer, China Union Pay, Neteller, Giropay, Skrill, WebMoney, Wirecard and Yandex |
No trading fees, except overnight fees |
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USD and EUR |
SEPA and SWIFT |
1% on taker |
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Only cryptocurrencies |
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0.1% trading fees |
Litecoin
Litecoin was introduced in 2011 to make up for the imperfection of the blockchain of bitcoin. The creator of this cryptocurrency network has the intention of making it the silver to the gold of bitcoin. Today, it has become the 7th largest cryptocurrency in terms of market capitalization. The currency is mined like bitcoin. It takes only 2.5 minutes for a block to be created. In addition to the SHA-256 hashing algorithm also used by BTC, LTC utilizes scrypt algorithm which minimizes the arms race experienced in the network.
Exchanges |
Currency |
Payment Option |
Fees |
|
USD, EUR, GBP |
Bank account, plastic |
Euro transactions – 0.15Euros for the bank transfer, when in the US – $10 charge) |
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EUR, GBP, CHF, USD |
Credit/Debit card, Bank transfer, Neteller, SEPA, Skrill, SOFORT, Euro Wallet, Bitpanda To Go |
No deposit fees, trading varies |
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USD, EUR, GBP |
Visa, Mastercard, Bank transfer |
No commission for bank transfer, 3.5% for cards |
EOS
EOS like other virtual currency is not controlled by any central body. Its ability to carry out millions of transactions within a second gives it an edge over other cryptocoins. Put differently, with an enhanced scalability, millions of people are able to utilise the network concurrently. Developers can create dapps which can be accessed by users free of charge. It comes with features that enable users to upgrade the Dapps at will. EOS blockchain also comes with amazing flexibility.
Exchanges |
Currency |
Payment Option |
Payment Option |
|
CAD, USD, cryptocurrencies |
Flexepin Voucher, QCX Voucher, Crypto Capital, Bank Wire and Interac Online |
1% for bank wire, 2.5% for Flexepin, 1.5% or $5CAD min for Interac. The rest are free. |
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All currencies |
Visa and MasterCard |
5.90% |
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USD and EUR |
3D-secure plastic cards |
0.5% |