Less than a quarter into 2018 and there were more than 100 initial coin offerings (ICOs) already, which is a common method of launching new cryptocurrency investments to the masses. This is 460% more ICOs launched year-on-year compared with 2017. When you consider an almost five-fold increase in ICOs, it’s clear that there is an emerging interest in these digital assets. However, with an increasing choice of cryptocurrencies, this does beg the question as to which cryptocurrencies offer the best investments over the short and long term.
This article is designed to educate you on the best investments to make in the cryptocurrency sector, the most reputable brokers and exchanges to use for those investments and the signs to look out for when looking at expanding your portfolio further in the future.
What are the best investments for your cryptocurrency portfolio?
As with any private investment you wish to make, it’s important to find a stock or commodity that has significant potential gains and minimal downside. The following cryptocurrencies are some of the most talked about crypto coins in the digital space, many of which are reported to have bright long-term futures:
There is no doubt that Bitcoin (BTC) is the most talked about cryptocurrency in the space. It has a 40% market share of the entire market capitalisation and is the longest established crypto coin. At the turn of 2018, it was experiencing exponential highs, valued at more than $20,000 per BTC.
However, it has since crashed well below the $10,000 mark, which is further proof of the volatility of investing in cryptos. There’s no doubt that BTC has the potential to reach new highs in the months ahead, but investors must keep a keen eye on new government legislation, which could make or break Bitcoin’s long-term future.
In 2017, Ethereum (ETH) soared by as much as 3,000% and cemented its position as the crypto market’s second-biggest digital asset. What makes Ethereum one of the best investments in the world of cryptocurrency? The fact that it is not only a cryptocurrency, but also a versatile open-source project. The Ethereum blockchain has become a veritable playground for open-source software developers. The Ethereum network is also planning to add further protocols to its technology in 2018 and beyond too, which could see the market cap and subsequent price of Ethereum rise much further.
If it’s one of the best-performing cryptocurrencies in 2017 that you’re looking for, look no further than Ripple (XRP). Ripple was almost worthless at the beginning of last year but soon soared by over 36,000%. Even though it has since retraced its value in 2018 to date, there is still very little downside to buying Ripple at the present time. Ripple’s long-term goal is to become the new way for banks and financial institutions to make cross-border transactions. Should this prove successful, its value will almost certainly sky-rocket in the months and years to come.
Although the price of Litecoin didn’t grow quite as quickly as Ripple XRP, its 8,000% growth should certainly pique your interest. Litecoin and Bitcoin are intrinsically linked. Some people liken Litecoin to ‘digital silver’ and Bitcoin to ‘digital gold’. Litecoin’s coin supply is four times that of Bitcoin, so the issue of supply and demand will not occur as quickly when buying Litecoin. Nevertheless, the Litecoin platform was the first to utilise the Lightning Network, making a transaction between Zurich and San Francisco in less than a second.
NEO is very similar to Ethereum. Often dubbed the ‘Chinese Ethereum’ it has a maximum supply of 100 million NEO tokens, 50 million of which have already been sold and another 50 million have been stored away for later release for inflationary purposes. NEO is a network with a bright future given Asia’s positive and embracing stance towards cryptocurrency. Many ICOs on the NEO network have been successful thus far and it is certainly one to watch and it may be an idea to buy NEO.
Step by step guide to investing in cryptocurrency
If you believe cryptocurrencies make for the best investments in 2018 after reading the above, it’s important to note there are two primary ways to invest: through a cryptocurrency exchange and a contracts for difference (CFD) broker.
The thing with crypto exchanges is that most require you to set up your own cryptocurrency wallet to protect your digital assets. This puts your investments at risk of the prying eyes of cyber-criminals. On the flip side, using a CFD broker means you can simply trade the price of your chosen cryptocurrency rather than physically own it in a wallet.
In our many years of experience in the cryptocurrency scene, eToro is the best option for placing long-term crypto investments. It’s a world-leading social trading community that allows its members to play ‘buy’ and ‘sell’ CFD orders based on whether they feel the price of a crypto coin will go up (buy) or down (sell). If you sign up to eToro, you’ll also benefit from the fact it is regulated by the UK’s Financial Conduct Authority (FCA) and the Cyprus Securities and Exchange Commission (CySEC).
- Hit the ‘Sign Up’ button on the eToro homepage, enter your personal details and choose a username for the eToro community.
- Verify your account by uploading proof of address/identity documentation. This is only necessary if you are depositing over $2,000 at a time.
- Hit ‘Deposit funds’ in the bottom left of the screen.
- Start building a ‘Watchlist’ of potential crypto investments, place your orders and watch your profits grow!
How to choose the best investments for your cryptocurrency portfolio
A US-based financial rating agency believes it has an accurate way of grading the investment appeal of cryptocurrencies. Weiss Ratings, which has rated stocks and mutual funds for many years, has created its own risk-reward ratio of the top 79 cryptocurrencies available to invest in today. Weiss Ratings’ owner, Martin Weiss believes certain crypto coins are “overhyped” and therefore “vulnerable to crashes”. In a bid to provide clarity for cryptocurrency investors, this letter-grade system helps to measure a crypto token’s risk with A being excellent, through to E, which is very weak.
It is important to keep your ears to the ground when it comes to crypto news and alerts on legislation which could influence the short and long-term price of a particular token. Of course, eToro members can discuss the best investments and trading angles amongst each other within the community’s social platform. This is another useful tool for beginners to crypto investing, as you can bounce ideas around with seasoned, profitable investors. Read our in-depth eToro review for more information on the community.
Hopefully this article has given you some inspiration to make one of the leading cryptocurrencies one of your next best investments. The volatility of cryptocurrency prices will either excite you or scare you, but there is certainly money to be made every single day.
Best cryptocurrency investments FAQs
Do people actually use cryptocurrencies?
Yes, absolutely. Every day there are millions of transactions in the leading crypto tokens such as Bitcoin and Ethereum, which means that the Bitcoin and Ethereum networks are used regularly. Furthermore, an increasing number of businesses offer consumers the chance to pay for goods and services using Bitcoin and other popular crypto coins; cryptocurrency is not only one of the best investments in 2018, it’s also one of the best payment methods too.
Why should you trust cryptocurrencies?
As with anything new, it’s not always easy to put your immediate faith and trust into it. Many of the leading cryptocurrencies have been designed to operate in an open-source environment too, while each network is also built to operate with complete transparency – all transactions can be viewed and verified by anyone at any time. This element of transparency does add a much-needed layer of integrity to cryptocurrencies as a whole.
Can you make money by investing in Bitcoin and other leading crypto coins?
There is no straightforward answer when it comes to making a profit from buying Bitcoin, Ethereum and other crypto tokens. One of the main reasons why people invest in cryptocurrency is due to the volatility of prices. They can fluctuate 8-10% within a matter of hours. This gives day (retail) traders the opportunity to take regular daily profits out of the cryptocurrency markets.
Can you lose cryptocurrencies?
Of course, while it’s perfectly legitimate to make money by investing in cryptocurrencies, you can also lose money too. If you invest at the wrong time and the price of a cryptocurrency moves against you, you could be staring at a significant loss. That’s the risk-reward balance you must bear in mind before using cryptocurrency as one of your best investments.
Is the use of cryptocurrencies legal?
It all depends on what country you live in. Different countries impose different restrictions and legislation on the use of cryptocurrency. For example, in Russia, they strictly prohibit the use of cryptocurrency both as a best investment option and as a payment method. In Asia, they take a more relaxed view about cryptocurrency. Japan’s government has approved Bitcoin as legal tender, for example.
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