Cryptocurrencies like Bitcoin and Ethereum have been around for several years, but have you ever thought about trading them to earn a part-time or full-time income? The cryptos, non-national forms of cyber money based on block-chain technology, are the future of global exchange, and now that the key security bugs have been ironed out, many have begun using these new forms of monetary value for speculation and investment purposes. One way of looking at it are assets like Bitcoin are real stores of value, can be used to purchase goods and services, and change in value.
So, why not add them to your investment portfolio the same way some buy gold and silver? Plus, if you want to specialize in one or more cryptos or mainstream currencies and trade them full-time, that option is open as well. Here are four points to consider if you want to add cryptocurrency to your portfolio, trade them for a profit, or simply get started trading traditional currencies.
Learning the Basics of Currency Trading
For anyone interested in venturing away from the stock market, currencies like the Euro, Yen or even Bitcoin are part of an exciting, fast-moving marketplace. The good news is that you need not be a seasoned pro to begin. There are several excellent mobile apps for currency trading that make the job easy to learn. The key difference between the stock and currency markets is how traders make a profit. When you purchase Bitcoin or regular currency, for instance, you can go long or short. In other words, all you need to do is predict the direction of the move, down or up.
Why It’s a Solid Opportunity
Crypto, as a field all by itself, represents a unique opportunity for investors for a number of reasons. For starters, it’s still a relatively new form of wealth and has been climbing in value since it came on the scene. Additionally, the world economy appears to be on the cusp of major acceptance of cryptocurrencies as a form of payment. In less than a decade, this form of money has at last gained acceptance from many major retailers, national governments, and among individual investors.
What to Watch Out For
Because non-traditional currencies are still new, it pays to watch out for a few red flags. For example, you can protect yourself by adding well-known cryptos to your portfolio and avoiding brand-new, untested ones. Look for high capitalization, at least a five-year track record, and widespread acceptance. Avoid tiny coins that haven’t yet proven themselves and don’t appear to be liquid.
Get a Slow Start
As with any kind of financial opportunity, it’s wise to enter the market slowly. Don’t replace your entire portfolio with Ethereum, Bitcoin, or any other new kind of asset. The precious metals analogy is helpful to consider arranging your holdings so that no more than five percent is represented by cryptocurrency. Then, every six months or so, do a review of your asset breakdown and consider increasing or reducing that amount.