As others have said you risk losing money, but in addition unless you are really good at it you won’t make more than someone who just holds. And you end up creating more taxable events and never get to long term capital gains territory.
Ethereum hit the scene with the promise of using the blockchain for more than just currencies. You could build decentralized apps on top of Ethereum and even new currencies. In the summer of 2016 I decided to buy ETH at around $9. The day after I purchased Ethereum something called the DAO hack happened and the price dropped 50%. Unlike in 2011, I didn’t need the money I invested to cover any bills. I watched my Ethereum swing between $4 $20 for about 8 months. I wondered if I could take advantage of those swings by buying when the price was low, selling when it was high, and buying back in when the price dipped again. Though I didn’t take any action on the thought, the idea lingered in my head.
Each option has its pros and cons, but notably, only an exchange-broker-wallet hybrid like Coinbase/GDAX allows one to trade and invest directly using a single platform. This page will focus on that option due to its ease of use for beginners.
Interesting article Michael.. im also interested in range daytrading Ethereum but am loathed to open a centralized trading account as decentralized will be the way to go in the future. Blocknet launches March 1st and hopefully this will be the first of many. Up until then which demo platform do you think will suit to paractice this on?
So, let’s put everything on the table. ICOs are essentially coins which you get by supplying someone with currently successful crypto coins so that they have a chance to make new future proof and even more successful coins. It seems silly, but somehow these ICO transactions are actually making a huge buzz in the cryptocurrency world. It is estimated that nearly $240 million has already been invested into such ICOs, of which about $110 million was invested this year. Surely there is a reason for such a huge movement of money? We think that people are constantly searching for that new and shiny cryptocurrency that will inevitably become the world currency system, and perhaps this is the reason why investments into this research are so high. Some of you might say that the potential is already there via Bitcoin or some other already released currency, but the reality is that not everyone is on the same page. Those of us who are so called non-conformists might be looking for something special in other places.
The new requirements could also lead to a shutdown of some cryptocurrency exchanges. Banks will be able to refuse to open accounts with any exchanges that refuse to disclose information about suspicious trading.
The rule of supply and demand is extremely important and not only in the cryptocurrency market. The price of any cryptocurrency you pick is always very closely linked to the amount of circulating currency. That means if the market capitalization increases so do the price of a cryptocurrency, eventually. So basically the more market cap grows the more grows the price of a cryptocurrency (usually directly proportional). Here is an example of a Litecoin graph so I could prove this theory in practice.
But did I listen? Nope. Because I am an emotional fear based creature just like everyone else. FOMO (Fear of missing out) got me. The force is strong with FOMO and not you or anyone else is immune to it. No matter how good you get, you’ll regularly and repeatedly shoot yourself in the foot.
You can check out my latest novel,an epic Chinese sci-fi civil war saga where China throws off the chains of communism and becomes the world’s first direct democracy, running a highly advanced, artificially intelligent decentralized app platform with no leaders.
Note: It is EXTREMELY likely that these exchanges will also temporarily stop taking new members so my advice is; open an account, even if you don’t plan on using it you will then have the option. Check out this list of cryptocurrency exchanges for more info and options.