Cryptocurrency: a user’s manual

Cryptocurrency: a user’s manual

Jul 31, 2019

Many of you are already well-versed in the nuances of the cryptoworld, and most have bought virtual coins. Naturally, the question of how to make them work for you and generate income arises. We’ll attempt to lift the veil of secrecy.)

Let’s leave forecasts and quotes to economists and try to tell you what worries and excites everyone who comes across this new, but already very promising world.

All at once
This is, in fact, one of the most serious problems for those who decide to invest in this market. The cryptoworld is like a forest: you need to watch your every move, listen, smell, and constantly be on your guard. Of course, everyone we’d all want it to be, just like it was in the best years, when it was possible to buy Bitcoin at a low price, and after a few months, or even weeks, to sell it for an amazing profit. Your brain is already painting images of luxury villas, snow-white yachts and a serene rich life...
We have to accept the fact that those times are over. Cryptocurrency is no longer a novelty, and even though the market is not fully regulated, certain rules of the game have already been established. This does not mean that you won’t be able to make a profit, but it will take more time. Maybe you won’t have a villa (although why not?), but you can earn enough for a decent house with a garden by investing in virtual money. Only this should be done not with passion, but with cold math.

When to sell?
This is a very serious question. It may even be worth formulating it a little differently - is it worth selling? Suppose you own three types of cryptocurrency. All of them are volatile, but one is extremely unsteady, the other is growing, and the third - falling. Which should you sell?
Trivial logic doesn’t work here. If you follow it, you can sell all three. This market requires careful analysis, and the time that you own these virtual assets is not sufficient to draw a correct conclusion.
First, study the history of the coin from the time of its very issue, read the comments and analysts’ forecasts. Even if you see that the rate has jumped sharply, don’t give in to the moment and give yourself time to sort the issue out.
Secondly, honestly answer the question of why you’d acquired these assets. If it’s for instant enrichment, then your prospects in this market are most likely sad. In one of the previous issues of this digest, we wrote that investing in virtual money is always a risk. So, you should be ready not only to increase your net worth, but also to lose it. Invest as much as you can lose without endangering your well-being.

Like Scrooge over his gold
So, should you not sell at all? Just own it and rejoice in the fact? Not at all. You’re the only one to make this decision. If you take into account all the above-mentioned tips and recommendations and come to the conclusion that now is a good time to sell an asset, you can easily make a good deal.
We are discussing global trends, and you should draw the conclusions yourself. For instance, according to analysts at CoinMetrics, about one fifth of all Bitcoins have remained in the accounts of their owners over the past five years.
That is, about 4 million coins are stored without transfers, exchanges or sale. To date, the cost of Bitcoin has exceeded $10,000 for one coin ($10,061 at the time of publication). Round it up to $10,000 and get the total value of ‘fixed’ Bitcoins - $40 billion.
Bitcoin has grown significantly over the past few months – on January 1, 2019, it cost less than $4,000. So why, after growing more than twice, didn’t everyone rush to sell it right away?
CoinMetrics specialists are confident that "this may signal that Bitcoin is increasingly becoming a means to preserve assets, rather than a means of mutual settlement."
This is actually an important point. Currency is strengthened through movement, circulation and demand. To grow “strong,” it must live. After some time, if it was sufficiently popular and in demand, it becomes stronger and becomes a gold equivalent: while remaining volatile, it is still guaranteed not to “go bust.”
According to another version, much of it can be attributed to banal carelessness. These coins aren’t moving because the owners simply lost the private keys to their wallets.
Let’s sum it all up. First of all, don’t expect instant enrichment. Secondly, study the market and don’t take hasty steps. Thirdly, once again, keep your private key in a safe place.