🔥 Cryptocurrency Investing 2021 | In which crypto invest?
Anyone who no longer feels like the low or zero interest rate policy of the European Central Bank - the ECB - should think outside the box and consider possible alternatives to savings accounts and the like. It doesn't always have to be a home loan and savings contract or a call money account - in addition to shares, there is also the option of investing your money in the crypto market. But which cryptocurrencies should you still invest in in 2020? And above all, the (legitimate) question arises as to whether it is ultimately too dangerous to pump your money into Bitcoin and Co.
The fact is: Investing in cryptos may be risky, but with an appropriate strategy you can reduce the risk and increase the chance of an (attractive) profit. It is only important that you always invest freely available capital and not take any money in hand that is required for the next monthly rent or loan installment. Because losses can never be ruled out, no matter how promising the forecasts are.
Advantages and disadvantages of cryptocurrencies investment
In recent years, Bitcoin has developed into a lucrative investment - as long as you always get in and then get out at the right time. Because after each high there was a (more or less violent) correction. The fact that the price fluctuations are seen by the critics as an extreme disadvantage may well be justified - but only if the market then moves in the wrong direction for the investor or trader. Because if the price goes up steeply, this may very well be seen as an advantage. There is probably no other option than an investment in crypto currencies that enables such high profits within a very short time. Of course, not every crypto currency is as volatile as Bitcoin, which can rise by $ 600 in the early morning hours and fall by $ 500 in the evening. This means that the question of which cryptocurrency to invest in in 2020 can be answered with a view to volatility and your own risk tolerance - risk-conscious investors or traders will choose Bitcoin, whoever wants a bit of stability will probably move more towards it Ripple tend.
Another advantage that must not be ignored is the fact that cryptocurrencies, especially Bitcoin, are increasingly moving into the middle of society. The possible uses are expanding more and more - that is, in addition to paying in online shops, you can already gamble in online casinos with digital currencies or pay for your trip (via selected providers) with Bitcoin. Due to the fact that many shop operators have recognized that accepting crypto currencies is addressing a new target group, it is also not surprising that digital currencies are becoming increasingly common as a payment option.
Above all, this is also due to the blockchain technology, the structure behind almost every cryptocurrency. And the blockchain technology is tamper-proof - another plus point. In addition, cryptocurrencies are not organized in a decentralized manner. In other words, there is no bank or government behind the Bitcoin.
But there are not only pluses: Due to the fact that crypto currencies are so-called digital currencies, Bitcoin and Co. are not tangible. On the one hand, this is convenient and can be seen as progress; on the other hand, hackers are able to easily suck money out of digital wallets. In addition to the lack of loss protection, the risk of a speculative bubble also plays a role - at this point, to be fair, it must be said: Bitcoin has already been declared dead several times and is in excellent health, despite repeated breathing problems.
In summary, one can say that the strong price fluctuations are on the one hand an advantage when the market moves in the desired direction, but on the other hand high losses are possible if one misjudges future market movements. For example, if you bought digital coins when the price was around 10.000 US dollars and observed a soaring towards 13.000 US dollars, that might be advantageous. Especially when the price increase can be observed within a few days. However, if it were to go from $ 10.000 to $ 6.000 within a few days, the volatility will be perceived as a disadvantage.
Another point is of course liquidity. On the one hand, you can already pay with Bitcoin in some online shops, on the other hand you can only (almost) speculate with Ripple or other crypto currencies, as only very few providers accept crypto currencies except Bitcoin.
So if it comes to the question of which cryptocurrency to buy, the question must be clarified in advance how the awareness or the degree of distribution of the cryptocurrency is.
How can you invest in cryptocurrencies?
Anyone who has dealt with the advantages and disadvantages and has come to the conclusion that they want to invest their money in one or more crypto currencies must then decide on a crypto exchange or a broker that subsequently trades in digital currencies offers. It is important to obtain information about the various providers in advance so that you do not have to experience any nasty surprises in the end. On the one hand, there are hidden fees or a very opaque fee model with a few providers, while a few other providers can even be said to be dubious machinations.
About Crypto exchanges you can buy coins directly. The digital coins are then stored in the wallet, the digital purse. You can also buy CFDs through brokers - so speculate with the price development. Another possibility are crypto funds as well as stocks that have a connection with crypto currencies or the technology behind it, the blockchain. So there are a few options that have different advantages and disadvantages.
In 3 steps to the first crypto currency
Ultimately, investing in crypto currencies is risky enough that you shouldn't take any risk with the provider as to whether or not it is a recommended broker or exchange. If you have already obtained some information about providers who offer trading in crypto currencies, you will almost certainly have come across eToro. It is one of the best platforms on the World Wide Web.
eToro may be the name of one of the most famous platforms that make it possible to invest in crypto currencies and also offer speculation with price movements (CFD trading). At the beginning it was a classic forex broker - today eToro is called a social trading platform, on which one can speculate with stocks, indices, ETFs, commodities and digital currencies. Registration does not pose any major challenges, even for beginners. The registration process only takes a few moments. To open an account, you only need to enter your first and last name, choose a user name and enter a password and a valid email address. This means that the account opening is completed after a few moments.
If you have a Facebook or Google account, you can also register via the social network channel. In this case, the Facebook or Google account data is used to open an eToro account.
If you then want to invest in a cryptocurrency, you first have to top up your eToro credit account. This is possible by pressing the “Deposit money” button. Another window will now open in which the payment methods accepted by eToro will now appear. Now you have to choose your preferred payment method. eToro accepts the following options:
- Credit card
- Bank Transfer
Depending on the selected payment method, the money can be available on the eToro immediately or only after one to three working days.
After the money is in the eToro account, you can invest in crypto currencies. Since there is a wide range of digital currencies at eToro, the question that arises at the beginning is which crypto currency you should invest in or which digital currency you should work with. In this case, forecasts can also be helpful - so what do the one or other forecasts for the respective crypto currencies look like, so that you can come to the conclusion whether it is worth investing in Bitcoin, Ether or, for example, in Ripple.
The name of the cryptocurrency must then be entered in the search mask. The abbreviation can also be used.
Opportunities to invest in cryptocurrencies
There are a few ways that you can invest in cryptos. Since there are different advantages and disadvantages here, it is important to clarify for yourself at the beginning which personal goal is being pursued.
Buy coins directly
In this case, the cryptocurrency forecast is important. Because who Coins purchases, which usually pursues the goal of buying at a low price and selling at a high price. The difference is the profit - and the greater the difference, the higher the profit. If you want to invest in cryptocurrencies in 2020, you should deal with the price histories of the favorite digital currencies and also with the forecasts. It should be mentioned at this point that forecasts are no guarantee - even if the experts and analysts agree, other market movements can suddenly occur.
Tip: Determine in advance at what price the purchased coins should be sold again - so you can use a plan to determine in advance how high the profit should be if the crypto market ultimately moves as desired.
It's not always about long-term investing, but also about trading in cryptocurrencies. But which currency should you buy in 2020 if you have trade intentions?
Here, too, the following applies: Bitcoin has the highest volatility - particularly interesting for risk-conscious traders or for speculators who want to make high profits with low stakes. However, it should be noted that it can also go in the other direction at any time. Losses cannot therefore be ruled out.
Speculation with Bitcoin is still possible even though you don't have any digital coins. Because in CFD trading you can speculate with the price development - that is, you make profits, even if the price of Bitcoin (or the selected cryptocurrency) goes down. Ultimately, this is all about “guessing” price movements.
Invest in crypto stocks or crypto funds
Even if there are no classic Bitcoin stocks, there are still securities that react to developments in the crypto market. For example, when new movements emerge in the blockchain area. Because blockchain technology, the structure of many crypto currencies, is used by more and more industries. And a growing blockchain technology has an impact on the Bitcoin price - and that in turn has an impact on the share prices of those entrepreneurs who deal with it or work with it themselves or are even involved in its development.
With crypto funds there is another way how you can invest in cryptocurrencies. It is important, however, to take a look at the strategy that is being followed in order to achieve an attractive return. Because there is manual and algorithmic trading - in some cases both options are offered. In manual trading, the fund manager works in the background and tries to invest in cryptocurrencies with good forecasts or rejects those that are said to have a less promising future. With algorithmic trading, software is used that scores above all with its automation. Guidelines are set here, which are then automatically implemented when the respective points are reached: If, for example, a purchase is made when the Bitcoin has reached a price of 9.000 US dollars and is sold when the Bitcoin is 10.500 US dollars, such is done Executions automatically.
You can also “mine” coins. The so-called “prospecting” has now moved into the background because the cost-benefit factor is not convincing. You can join so-called mining pools, but here, too, the benefit must already be questioned.
Which cryptocurrencies are worthwhile in 2020
If you want to invest in cryptos, it must be clarified in advance what the respective forecasts look like. That means, which cryptocurrencies are worthwhile in 2020?
Bitcoin has - at least when it comes to the forecasts - the greatest potential. The all-time high was set in late 2017 - over $ 19.600. At the current time (as of early November 2020) the price is 13.500 US dollars. Some forecasts indicate that Bitcoin could break the all-time high from 2021 in 2017 - some experts already see Bitcoin at 100.000 US dollars. And that in the foreseeable future.
Ether, which - according to market capitalization - “eternal number 2”, reached its all-time high in January 2018. At that time the price was 1.448 US dollars. At the current time, the price (as of early November 2020) is 370 US dollars. An increase in the Bitcoin price would very well have a positive effect on the ether price. Here, too, experts assume that the all-time high will be exceeded in 2021.
For a long time the absolute insider tip, IOTA does not seem to get off the ground. IOTA is based on Tangle, the blockchain alternative. The all-time high was set in December 2017. At that time the price was US $ 5,25. Now (as of early November 2020) you are 95,5 percent away. At the current time, a coin costs 0,23 US dollars. Whether IOTA could benefit from a Bitcoin high cannot be said at the current time.
It is similar with Ripple, the so-called “Coin of the Banks”. The all-time high was $ 3,40 and was set in January 2018. Even if a bright future was predicted for Ripple, no corresponding movement (or a comeback after the 2018 crash) has been observed. It must be doubted whether the ripple price will move noticeably upwards in the foreseeable future. At the current time (as of the beginning of November 2020) the coin price is 0,23 US dollars.
Lay the Litecoin in December 2017 at 360 US dollars, the price today (as of early November 2020) is 52 US dollars. A rise in the price of Bitcoin could drive the price of Litecoin up.
Where can you invest in cryptocurrencies?
In order to be able to invest in crypto currencies, it is necessary to have an account with a corresponding provider - this can be a broker or a crypto exchange.
You can invest in cryptocurrencies and trade in cryptocurrencies via eToro. The social trading platform is operated by the Cyprus Securities & Exchange Commission (CySEC - Cyprus for short), the Financial Conduct Authority (FCA - United Kingdom for short) as well as the Markets in Financial Instruments (MiFID for short - Europe) and Australian Securities and Investments Commission (short: ASIC - Australia). eToro convinces above all with a fair and transparent fee model. Because the provider does not charge any custody fees or administration or clearing account fees. Please note that there is an inactivity fee of 10 euros / month if the registered user has not logged in for more than twelve months.
Plus500 offers CFD trading on stocks, indices, currencies, commodities such as cryptocurrencies. The platform was founded in 2008 - the headquarters are in Israel. Plus500 scores with a user-friendly interface and very fair conditions. Above all, Plus500 appeals not only to beginners, but also to experienced as well as professionals - this is due on the one hand to the low minimum deposit of 100 euros, on the other hand to the quite high leverage of 1 to 30. Regulation is carried out by the British financial supervisory authority.
There are more than 250 base values here. The area of stocks is particularly extensive, with the selection of forex trading being very broad. Here traders can access more than 100 forex pairs. There are also goods such as raw materials and of course digital currencies. Particularly noteworthy is the negative credit protection. Because the small investor account provided by IQ Option protects against slipping into a minus - once the balance on the account is used up, there is no longer any charge. Regulation is carried out by the Cypriot CySEC.
For private investors, there is a maximum leverage of 1 in 30. Professionals can access a leverage in the order of 1 in 600. Libertex also convinces with a free demo account so that you can familiarize yourself with the different features in advance. The selection of trade values is particularly attractive. Because there are stocks, indices, metals and cryptocurrencies here. Libertex is also regulated by the CySEC.
With XTB there is also a broker that has its branch in Germany and is therefore regulated by the Federal Financial Supervisory Authority, or BaFin for short. XTB offers three accounts - Basic, Standard as well as For - where the differences are in the details. The maximum leverage is 1 in 200, and there are the same training courses as additional services. There are differences in the spread calculation. The basic account has fixed spreads, while the standard account has variable spreads.
Further recommendations for investing in cryptocurrencies
Is it worth investing in cryptocurrencies in 2020, or is the risk ultimately too great? However, with an appropriate strategy it is possible to reduce the risk.
Diversification - not all on one horse
Bitcoin may - according to the forecasts - have the greatest potential, but it is important not to put all of your money into the crypto currency. Especially when it comes to long-term investing, it may be advisable to also invest in stocks, funds or ETFs. If, on the other hand, you only want to invest in crypto currencies, you should make sure to also put money in other digital currencies - not only in Bitcoin, but sometimes also in Ether or Litecoin (or in digital currencies that have a promising forecast).
Invest only with trustworthy companies
Not only does volatility play a major role. The question of which platform to speculate on with digital currencies also needs to be answered: Because there are very well a few black sheep who are ultimately only interested in the trader's money - test and experience reports help here to find the one that is right for them Find providers.
Realistically assess opportunities and risks
And in the end, it's also about the personal attitude. Because you shouldn't invest the money you need - always use freely available capital and set limits for yourself. And you have to deal with the possible risks involved in trading cryptocurrencies.
Conclusion: It is still worth investing in cryptocurrencies in 2020!
Anyone who has followed the price histories of the various crypto currencies in the past few years and is concerned with the latest forecasts will most likely take the risk and invest in the crypto market. With eToro as a provider, you are sure to have a reliable partner at your side so that you can then work with Bitcoin and Co.
Investing Crypto FAQ
Is a crypto investment still worth it?
Yes. The forecasts are promising. In addition, the cryptocurrencies are far from their all-time highs. That means there is still enough room for improvement here.
Which cryptocurrency is the best?
Bitcoin has by far the greatest potential. Ether is also one of the most promising cryptocurrencies.
What options are there to invest in cryptos?
You can buy coins and sell them after a price increase, but you can also earn money with CFD trading or invest in crypto funds.
Cryptocurrencies for a long-term investment
Due to the fact that the forecasts are promising, long-term investments can very well bring an attractive profit. The only important thing is that you set yourself a goal from the start of the price at which you sell.