Cryptocurrency Investing For Dummies
More than 2,000 cryptocurrencies currently exist at the time of writing. Cryptos gained a lot of mainstream hype in 2017, when Bitcoin’s value increased 1,318 percent. This surge was nothing compared to the gains of some other digital assets, such as Ripple, which went up (hold your breath) a whopping 36,018 percent. These returns are more than what a stock investor could normally make in a lifetime, and they generated enough interest to create a true frenzy.
However, the bubble burst at the beginning of 2018, leaving many late investors, who bought cryptocurrencies at a very high price, at a loss. That was enough for some newbie investors to label the whole industry a scam and either give up on investing altogether or go back to traditional financial assets like stocks. Regardless, the cryptocurrency market continued evolving, became more stable, and caught the attention and support of many major financial institutions globally and in the United States. As more people get their hands on cryptocurrencies, more sellers feel comfortable accepting them as a payment method, and that’s how the whole industry can flourish.
The foundation of cryptocurrencies such as Bitcoin lies in a new technology called the blockchain; it’s the infrastructure that cryptocurrencies are built on. Blockchain is a disruptive technology that many argue is bigger than the advent of the Internet. The applications of blockchain don’t end with cryptocurrencies, though, just like the applications of the Internet don’t end with email.
The unique thing about cryptocurrency investing and trading is that a crypto is a cross between an asset (like stocks) and a currency (like the U.S. dollar.) Analyzing the fundamentals behind a cryptocurrency is very different from analyzing any other financial asset. The traditional ways of measuring value don’t work in the crypto industry, mainly because in many cases the crypto data isn’t stored in a central hub somewhere. In fact, most cryptocurrencies and their underlying blockchain are decentralized, which means no central authority is in charge. Instead, the power is distributed among the members of any given blockchain or crypto community.2 Cryptocurrency Investing For Dummies
About This Book
You may have heard of some of the famous cryptocurrencies, like Bitcoin, but the industry doesn’t end there — far from it. And although the crypto market has a ton of volatility, it also has potential for you to make real money by investing wisely and developing strategies that suit your personal risk tolerance. In this book, I tap into the risks involved in cryptocurrency investing and show you the different methods you can use to get involved.
The topic of cryptocurrencies and their underlying blockchain technology can be a bit confusing. That’s why I try my best to keep Cryptocurrency Investing For Dummies easily accessible and relatable and free of intimidating terminology. But it does contain some serious information about strategy development, risk management, and the whole industry in general.
As you dip into and out of this book, feel free to skip the sidebars (shaded boxes) and the paragraphs marked with the Technical Stuff icon. They contain interesting information but aren’t essential to becoming a crypto investor.
This book contains a lot of web addresses to get you additional information about certain topics. Some of the web addresses are affiliate links, meaning that if you click them and start using a company’s services through that specific web address, I may earn an affiliate payment for making the introduction. You also may note that some web addresses break across two lines of text. If you’re reading this book in print and want to visit one of these web pages, simply key in the web address exactly as it’s noted in the text, pretending as though the line break doesn’t exist. If you’re reading this work as an e-book, you’ve got it easy — just click the web address to be taken directly to the web page
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|May 18, 2021|