Cryptocurrency has become the most profitable object for investing money. At the same time, in comparison with precious metals, natural resources, or real estate, virtual coins involve more risks associated with jumps in quotes. Does it make sense to continue or start investing in cryptocurrency next year? What cryptocurrency to invest in 2020?

Compared to securities, bonds, and other classic financial assets, cryptocurrency resembles a kind of lottery, sweepstakes. The booming demand for virtual coins, high margins, and media attention leads to the fact that often the real value of a particular digital currency is overstated at times. Those investors who work with ordinary shares regularly monitor market capitalization and asset volumes. As for cryptocurrencies, their holders should constantly analyze the trends of this market.

How to start investing in cryptocurrency?

So, if you have already decided to invest in digital assets, the first question that arises before you is how to invest in cryptocurrency? Proceed as follows:

Decide on the amount of investment. Remember that the price of cryptocurrencies is very unstable. Continued growth may be followed by a no less protracted decline. Potential income is high, but risks are high. Therefore, do not invest in cryptocurrency the money that you are not ready to lose.
Decide which blockchain currency you want to buy. To do this, read analytical reviews on thematic resources, look at price charts, and analyze the situation yourself. The most promising coins for 2019 we have listed below.
Open a wallet to store the cryptocurrency in which you want to invest money. What they are and how to do it read here.
Choose the method by which you will become the owner of crypto tokens.

If you do not want to engage in auto trading, it remains to accumulate currencies. To do this, at least in general terms, you need to figure out how to form a cryptocurrency portfolio.

The standard portfolio to advise is:

half of the investment should be directed to the BTC,
15% in ETH,
10-15% – in Ripple,
buy some Litecoin and Zcash.

Of course, the rest of the portfolio is of primary interest. You can also buy fewer bitcoins, more XRP, etc. Some traders recommend buying more Ethereum. It is believed that the rate of this cryptocurrency can soar up to 1 thousand US dollars. But such forecasts have no solid foundation.

In any case, it is hardly worth composing your digital portfolio from one bitcoin or, moreover, another cryptocurrency. It is necessary to diversify your investments. However, this should be done wisely. If the portfolio will include cryptocurrencies from the top 10 by capitalization, then x2 (doubling of investments) can be expected for a very long time. Bitcoin, Ethereum, and XRP can stagnate in one place for ages without any profit.

An ordinary portfolio with relatively low risk consists of 70% of the top 10 coins and another 30% of the top 30 coins. As I noted above, such a portfolio can double for many years.

That’s why it is more profitable to compose a portfolio in other proportions, adding cryptocurrencies from the top 100 to it. For example, a portfolio consisting of only a quarter of top-10 tokens, 50% of top-30 tokens, and another quarter of top-100 tokens can be considered risky. Such proportions are most often used by experienced traders to get profit in a relatively short time.

What cryptocurrency to invest in?

What Cryptocurrency to Invest in

Studying current cryptocurrency quotes is the main task of the investor. One must also take into account the reliability of “;digital gold”;. At the moment, you can easily get into a difficult situation with fake currencies, which are held by companies and are more like a financial pyramid. Verified cryptocurrencies:

Ethereum has shown steady development since its inception. Of the bonuses for users is the ability to independently generate blockchain applications for financial transactions. The advantage of cryptocurrency is the absence of intermediary companies, this reduces the risk of theft of the invested amount of money. Ethereum users also have the opportunity to create casinos, betting shops. In the future, experts predict cryptocurrency will grow 10 times.
Bitcoin is one of the most liquid cryptocurrencies. Investors received more than 120% per annum during the time of investing funds. This is especially true for long-term investments of 5 years. Of course, investing in 2012 can get fantastic benefits today. Investing in Bitcoin is easy through a special wallet that gives you access to one of the sites that trade bitcoins.
Monero has the main advantage over other cryptocurrencies, this is the anonymity of users and transactions. There are also negative aspects: the currency is very popular on the black market, as transfers of funds cannot be monitored by law enforcement agencies and others.
Factom is based on a blockchain, which ensures data security.
Counterparty – a financial platform that uses blockchain technology, has XCP cryptocurrency. Transactions are carried out at special bitcoin addresses.
Siacoin is a completely anonymous platform with a user-friendly interface.
Lisk is a potential competitor to Ethereum with growth prospects.
Ripple is an ideal cryptocurrency for venture operations since the commission for making payments is reduced.
Steem – a system of payments for completed service.
Zcash is a completely new platform with a high level of anonymity and good quotes.

Investment process

Knowing the benefits of investing in cryptocurrencies, and deciding which one to invest in free finance, you need to think about the process of buying digital money

The traditional way of acquiring cryptocurrencies is an electronic wallet, fraudsters will not be able to crack it, which only the copyright holder has access to, even if the service on which it is located shares the data. It is also possible to conduct transactions with digital currencies on special exchanges, where you receive several wallets at once for unhindered operations. Wallets on exchanges are hacked regularly, so storing large amounts of money is a big risk.

There are exchanges through which you can buy bitcoins for Dollars from other users. On services of this type, usually a good course. The operation is easy to carry out, having a card of Sberbank or any other bank. The whole process is as follows:

The buyer selects the seller on whose account a certain amount of bitcoins is blocked.
The card number appears, to which the transfer is made.
After making the payment, the seller confirms the fact of receiving the money, bitcoins go to the buyer.

Difficulties for novice investors

Even a professional will not be able to predict the rise or fall of quotes of new cryptocurrencies, their rate depends more on advertising and all kinds of speculation. With more trusted players, such as Ethereum or Bitcoin, the situation is more clear and predictable. But there are a number of other problems associated with the technical equipment of the problems. An increase in the number of users will result in transactions going slower than usual. Payment operations involving small amounts are unprofitable due to the fee charged for the transfer. This feature of the new currency can significantly weaken its influence on the economic situation in the world, as well as affect the price and quotes.

Advantages and disadvantages of investments

Advantages and disadvantages of investments

I”;d like to start with the advantages of investing in critical currency since it is really profitable:

For a long time, Bitcoin has shown steady growth in relation to other currencies. The graph shows the exchange rate of the BTS to the Dollar.
Users have a particular trust in Bitcoin. Other cryptocurrencies are not in such demand. After many crashes, Bitcoin will necessarily go into growth. In addition, it has a high capitalization, which further strengthens the position of the currency.
Bitcoin has already been scaled, and the subsequent branching into a new currency will attract even more users.
Bitcoin’s liquidity is higher than other cryptocurrencies. The possibilities of using it when buying and selling are also extensive.
Investing in cryptocurrency is necessary right now because, at the moment, bitcoin and other digital money are freed from state pressure. There is no additional charge for storing coins, as is the case with deposits or bank accounts. The advantages of most cryptocurrencies: anonymity, decentralization.

In addition to the positive investment factors, it is worth mentioning the disadvantages:

A significant decrease in transaction speed for more than a year has been alarming to users. According to experts, the situation can only change for the worse, but scaling the network will probably solve the problem.
Some states have prohibitive policies. Excessive control will also lead to aggravation of the situation, loss of trust among users.
The growth rate can be replaced by a sharp “collapse”, which further increases the risks of investing.

Investment risks

The risks are also due to the fact that even a group of speculators acting together can affect the position of bitcoin. It is worth recalling the time when the rate fell almost for no reason, in the early days of 2017 it amounted to $1,153, and after five days it sharply shifted to $850. Such situations are quite rare, but you should not discount such an opportunity. With large investments, you can lose a significant amount.

How to assess the risks?

Altcoins, currencies that compete with more trusted financial market players, are considered even more profitable in terms of investment. However, their situation can radically change in 2-3 years. It is difficult to predict the exact time of stagnation, so the investor must make an independent balanced decision on the reliable investment of his own funds.

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