In this new cryptocurrency investing for beginners series, I’ll be reading parts of my book, Cryptocurrency Investing For Dummies, to simulate a book-signing experience for those of you who haven’t got a chance to meet me in person. The following is a direct extract from the copyrighted book. All rights are reserved to Jon Wiley & Sons “For Dummies” series.
Cryptocurrency Investing For Dummies Book – Introduction – Page 1
Cryptocurrencies like Bitcoin became a mainstream hype in 2017 when Bitcoin gained 1,318 percent. This surge was nothing comparing to the gains of some other digital assets like Ripple, which gained (hold your breath) a whopping 36,018 percent. These returns are more than what a stock investor could make in a lifetime and was enough to get everyone and their grandmother interested, creating a true frenzy. However, the bubble burst in the beginning of 2018, leaving many late investors who bought cryptocurrencies at a very high price at a loss. That was enough for some newbie investors to label the whole industry as a scam, and either give up on investing altogether or go back to traditional financial assets like stocks. Regardless, the cryptocurrency market continued evolving, became more stable, and caught the attention and support of many major financial institutions globally and in the U.S.
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The real value of cryptocurrencies lies on a new technology called the blockchain. It’s a disruptive technology that many argue is bigger than the advent of the Internet, and it’s the infrastructure that cryptocurrencies like Bitcoin are built on. The usage of blockchain doesn’t end with cryptocurrencies. Just like usage of the Internet doesn’t end with email. But as more people get their hands on cryptocurrencies, more sellers feel comfortable accepting them as a payment method, and that’s how the whole industry could flourish.
The unique thing about cryptocurrency investing and trading is that it’s a cross between an asset (like stocks) and a currency (like the U.S. dollar.) However, analyzing the fundamentals behind a cryptocurrency is very different than that of analyzing any other financial asset. The traditional ways of measuring value don’t work in the crypto industry, mainly because in many cases there is no central hub where the crypto data is stored. In fact, most cryptocurrencies and their underlying blockchain are decentralized, which means there is no central authority in charge. Instead, the power is distributed among the members of any given blockchain or crypto community.
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If you’re wondering how you can take your crypto investing to the next level, don’t forget to get your free copy of my new book, Cryptocurrency Investing For Dummies.
#1 Best Selling Author. Helping you accelerate your retirement with Triple Compounding™ Former engineer on a mission to help 1 million households take control of their finances. Founder & CEO of Invest Diva.
