How to invest cryptocurrency?
The price of bitcoin broke 60,000 dollars recently, of which long-term bullish trend starting one year ago seems unstoppable. Bitcoin is a hot investing object gradually accepted by mainstream out of a small geek circle. Since it was invented, fans of it view it as disruptive innovation that is replacing traditional currency system while opposites angrily regard it as Ponzi scheme.
1. Bullish trend in recent half year
Bitcoin’s price reached new all time high 20,000 dollars in Dec.16th, 2020. Till Jan.3rd, 2021, its price surged to 34,000 dollars during short time. After Tesla announced allocating 1.5 billion dollars to BTC, its price went over 48,000 dollars and 60,000 dollars continuously during Feb, 2021. In Mar. 2021, Bitcoin’s price went back to 50,000 dollars and then soared over 60,000 dollars again after fluctuating in band around 55,000 dollars.
2. Work mechanism of bitcoin
Bitcoin can be used to transfer money from one’s account address to another’s. Apparently, it’s similar to transferring money through bank. However, bitcoin is decentralized. No third-part institutions get included to account or give credit to the value of bitcoin. While bitcoin is not regulated by any authority institutions, governments or central banks.
3. Invest crypto or not?
Cryptos of top3 market value are BTC (over 900 billion dollars), ETH(over 180 billion dollar), dot (over 30 billion dollars). Over half proportion of whole crypto market value is taken by bitcoin. Cryptos of top 10 changes frequently excluding BTC and ETH. Even BTC is the most stable crypto in the market, its price fluctuates extremely large both in price range and frequency. There were 8 months during each one price range of rise or fall was over 10%. Earlier in Dec. 2017, bitcoin just touched all time high 19, 873 dollars. In subsequent one year， its price kept in bearish trend and touched less than 3,000 dollars!
Investing crypto is like starting a romantic relationship with a target whose emotion is extremely unstable. In brilliant moments, your partner could do whatever to make you happy. In dark moments, you would be painfully tortured mentally by the same person. Quit or stay away from crypto market if bearing huge emotional fluctuation is impossible. While take a try to invest crypto under well emotional management as well as reasonable investment strategy.
Getting super rich over one night by investing crypto over large leverages? Insane thought! Without help of mature authority regulations or legislative provisions， crypto investors who are ignore risks tend to suffer huge losses from large leverages or buying trash altercoins.
More attention require to pay to investing altercoins because fluctuation of those is much larger than bitcoin. Altercoins tend to soar in short term to tempt newbie investors to buy it and then its prices drop down from high point in long term. Usually, the less market value means the larger fluctuation of price for altercoins. Stay away from altercoins or allocate less than 5% position to invest.
4. Prospective of crypto investment
If it goes in a neural state, crypto investment will maintain its market value and to be in a small circle of investors. In pessimistic view, as the bubble of market is punctured, all market value would vanish. Considering number of institutional investors and money are increasingly racing into the market, the market will probably swell and come onto the stage in front of mainstream.
5. How to follow the possible bullish trend
As analyst from JP Morgan suggests, it’s safe and enough to allocate 1% of asset in crypto market. If the price keeps skyrocketing, it’s lucky to be part of winner to share profits. Otherwise not much loss to bear even it vanishes.
