Cryptocurrency is the hottest investment trend — but is there still money to be made?
Every time you turn around, there’s a new fad for something, be it fashion, food, or personal finance. Sometimes, those hot trends turn into real movements. Other times, they fizzle out and fade away.
For years, cryptocurrency trading was seen as a niche trend more suitable for academic papers than mainstream focus. Most headlines — if they existed — were more about how long until it disappeared, rather than who should be joining in.
Recently, however, crypto has started to move past the fad stage and into a real, viable investment. Indeed, crypto has become such a major financial trend that even mainstream financial gurus, like Suze Orman, have started investing their own money into various currencies.
Crypto’s growing popularity has brought with it more ways to invest and even a few new ways to put your crypto to use. Yet the question remains: How much profit can really be had for those investing this late in the game?
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Bitcoin’s volatility can still work for you
We’ve all seen the headlines about the crypto millionaires who invested in Bitcoin for pennies a coin, and it’s easy to see how they got rich on a currency now worth more than $45,000. But just because Bitcoin has become much more expensive doesn’t mean there’s no room for profit to be made.
It all comes down to Bitcoin’s inherent volatility. This time last year, Bitcoin was priced around $12,000 a coin — a far cry from its current value. And just a few months ago, it was nearly $20,000 more than it is now.
Depending on how the market turns, the price of Bitcoin could plummet again — or rise once more. With a well-timed purchase (or sale), a wise investor could certainly find ways to make good money by taking advantage of the ups and downs of the Bitcoin market.
In many ways, the profit to be found by investing in Bitcoin is similar to investing in any other currency, such as investing in the foreign exchange (forex) market. As the world changes, the value of Bitcoin will also change. If you can intuit those changes (or just get a lucky guess), you can certainly make Bitcoin’s volatility work in your favor.
New currencies hit the market regularly
If the idea of eking out a profit on luck and whim in the Bitcoin market isn’t appealing, you can always try to predict the next big cryptocurrency. New types of cryptocurrency hit the market seemingly every week, leaving plenty of options for getting in on the proverbial ground floor.
Unfortunately, there’s as little rhyme or reason to which new currency takes off as there is to whether Bitcoin will see a rise or a dip. Some currencies get the meme stock treatment — small retail investors connected by social media buy it in droves, driving up the price — while others seem to wallow in obscurity.
A long-term investment
Whether you choose to invest in an established cryptocurrency or want to pick up a brand new crypto, the key to making money off of it may very well just be time. Even the volatile Bitcoin has shown to be a good investment over the long term — though, with crypto, “long term” is a relative concept, as the typical digital currency has been around for a few years at most.
Either way, be sure to keep one thing in mind: Only invest what you can afford to lose. If your personal finances aren’t in good shape, then stay away from volatile investments. One wrong turn in the crypto market, and your expensive coins could turn into the digital equivalent of paperweights.