Bitcoin which is the first cryptocurrency introduced in the year 2009 has grown almost from $.003 to $18000 in just 7 years. Being an entrepreneur, I have never seen such a tremendous growth in any other business in my entire life. However, the awareness of cryptocurrency has just spread in last two to three years. Especially in 2017, it has gained more popularity due to rise in some other cryptocurrencies like Ethereum, Ripple, Stratis, also known as Altcoins.
In early 2016 it became the favorite spot for traders and businessman due to high gains. But we all know easy money can be highly risky and same goes for cryptocurrency. And at that time, the community was divided into two groups – one who was encouraging trading and investment with crypto and other was speculating that it is a short-term bubble which may burst soon. In the last two years, the market has undergone major changes and it has also developed trust among traders and investors. And the result is that the crypto market cap has crossed over 400 Billion dollars mark. If we take the experts view into the consideration then upcoming years are highly profitable.
This market is so lucrative that after finishing this article some of you would definitely like to hold bitcoins not complete than surely in a fraction. You can explore some other articles to know about cryptocurrencies investment such as how to buy bitcoins and Altcoins?
Vital factors which draw an Entrepreneurs attention towards crypto Investment
1. Potential Growth
Current statistics is enough to understand its growth potential and there is no doubt that the best is yet to come. If the market goes with the same pace as it is going, in the next 10 years Bitcoin can be more than 1 million dollars. Look at this chart how it’s depicting the success story of bitcoin.
2. Digital Coin Trading (Altcoins Trading & Investments)
Bitcoin is not the only decentralized currency where you can invest. Now there are more than 1000 cryptocurrencies and some are more powerful than bitcoins in technical terms. So whether you want to invest or interested in intra-day trading – both can be done here. If you are good at trading you can easily take out 20% to 30% of your capital. Above link will give you in-depth information how to analyze an investment in cryptocurrency.
3. ICO (Initial Coin Offering) The first choice of the Investors
You would be surprised to know that nowadays 70% of the total investment is done during the ICOs. By the time coin launches on the different exchanges, the price is already 5 to 10 times of its’ initial price. I wanted to participate for Electroneum but they closed their ICOs 15 days before their scheduled date. The reason all the coins were bought by the investors and there was nothing left to offer. The result was also great the moment it hit – the exchange price was 10 times higher than its initial price.
ICO gives you a higher chance of making the profits because usually, the price gets higher after its launch. But please ensure to review the coin carefully before participating in ICOs because 20% to 30% of them would lead you to a scam. This precaution is only for the newbie as experienced investors know how to find the legit one.
4. Crypto Mining
Mining is another profitable opportunity in cryptocurrencies. Where you can mine your coins and these are basically done in two ways. Either you make your own setup which is expensive and involve other risks such as which pool are you going to mine? how many coins are left to be mined? If I take the example of Bitcoin, then mining is saturated – you need more hash power to mine and more than 85% of the total bitcoins are already out in the market. Whereas Ethereum still has bigger space and easy to mine.
Another way is cloud mining where multiple miners join and create a bigger setup with more hash power in order to mine the coin. Bitcoin mining would be again profitable when its price will increase more.
The dark side of Crypto Currencies
Despite being highly profitable, Crypto also has lots of risks. And you need to keep this in mind before investing. Analyse the market and coin carefully before initiating any investment else you might end up losing 90% or more of your capital. The partial knowledge is dangerous and that is the reason we are covering all the risks involved in this business.
1. Price Manipulation
Manipulating price is a very common practice here and the objective of big whales are always to pump the coin price up by 2 to 5 times before dumping it. Sometimes the target can be 20 to 30 times depending on the coin statistics. Now you must be thinking how is this possible? But it is very easy in crypto trade. Group of investors join and they decide to buy and sell price on a specific target. And this is another reason which makes crypto riskier.
2. Scams
Due to enormous profit potential, the market is too lucrative that Entrepreneurs are not even analyzing it and eventually get trapped in scams. Recently China banned ICOs in their country because of the high number of scams. They, in fact, revoked the trading on all existing exchanges to minimize the risk of loss.And in case of a scam, you might lose 100% of your capital.
3. Competition in cryptocurrencies
Every day there is new currency in market and developers always ensure that the new coin should be better than the existing one. You will find more than 2 or 3 currencies for the same purpose. And the sole perspective to launch these coins is to grab the market of existing one. And it is pretty obvious that the market will move with the coin which is technically strong. So you might have to shift your investment to less profitable coin to higher. It is really important to observe and shuffle your investment according to the market situation.
Conclusion
Cryptocurrency is a highly profitable business and there is no doubt that the next couple of years are really bright. We encourage all entrepreneurs to step forward and see the potential growth in this market. In the year 2017, people have made millions of dollars in currencies like Ethereum, Stratis, and XRP. Now imagine there are more than 1000 out there and still new currencies are being added to the chart every day. But before initiating any investment or trading please review the currency and market carefully.