Investing In Virtual Currencies

Virtual Currencies

You’ve heard around the world or read about the Bitcoin, one of the virtual currencies, which has been talked about since the beginning of 2014 and very recently since May 2017, following the meteoric rise of his value.

The BitCoin, its flight

If you have not heard of the BitCoin and its meteoric rise, here is a summary:

Launched in 2009, BitCoin reached parity with the dollar in February 2011 (1 BitCoin = 1 Dollard). In November 2013, we reached $ 1,250 for 1 BitCoin, then dropped back to around $ 250 at the beginning of 2014. Following the Brexit, BitCoin is gaining momentum as all the financial centers of the world fall like the CAC40 stock market. At the time of writing this article, its value is around $ 2,350 for 1 BitCoin.

The virtual currencies

These virtual currencies are also called crypto-currencies, even if they are virtual, their share in the current economy is real and strongly increasing. To date, there are more than 800 virtual currencies and their capitalization is well over 50 billion Euros. Investing in this type of virtual currency is therefore not easy for new people wishing to embark on this activity.

These different virtual currencies see their values ​​changed over the course of the day. All these currencies, certainly, will not know the success of the Bitcoin, some will disappear certainly. Some currencies will stand out and be noticed, with the passage of beautiful, successful stories for people who identified them early and invested in it.

How to identify a virtual currency with potential?

In this jungle of existing virtual currencies, the hardest thing is to be able to identify currencies likely to make you earn money, that is the nerve of war. In order to judge the seriousness of money, its future potential and its probability of gaining value, there are a few criteria to be taken into account such as:

  • Technology: Each currency offers a technology, many are copies of the BitCoin technology. It is necessary to take into account the type of validation of the block chain, is it proof-of-work, proof-of-stake or none? Virtual currencies that have a different BitCoin technology need to be closely monitored, as they may be interesting in specific markets.
  • The amount of units created: It is necessary to inquire to know if the virtual currency is limited in number of token / unit. For if it is not, its price may stagnate or diminish when there is new unit creation. Example of the BitCoin, the latter is limited to 21 million units. This is what makes it its rarity, for information, there are already more than 16 million BitCoins in circulation.
  • Price:  Price is an important factor in making real business. Buying 1 BitCoin today will be a risky and costly operation. It is therefore necessary to focus on promising currencies, the last of the virtual currencies to be talked about is the Ethereum which is March 2017 is fleeting to reach today 190 Euros around for 1 unit while this currency was still to 8-9 € per unit in January 2017. A friend had bought more than 10000 Ethereumen early 2015 for barely 600 Euros. I let you imagine his daily life today after reselling half of his stock of Ethereum.
  • The website: You must also look at the seriousness of the currency via its official website, if it has one, in order to have information about the company and the team in charge of this currency.
  • The developer team: In connection with the previous point, it is interesting to look if the developers are high-level to bring this currency to be well developed and grow in the years to come. One can also look at their community exchanges within platforms such as Slack or Reddit. Are they volunteering? Part time?
  • Developer financing: An interesting question as to whether developers are paid by an investment fund or by a company.

Monitor / Buy / Store / Sell virtual currencies

Now that you have the criteria to try to identify the virtual currencies that may be interesting, you will need the tools to allow you to follow these values, buy them, store them and sell them.

Monitor

The first step is therefore to monitor the virtual currencies in circulation in order to identify those on which you want to bet taking into account the parameters I have given you above. For this, the reference site will be CryptoCurrency Market Capitalizations

Buy

Once you have identified the currency you want to buy, you will have to find a site that sells that currency, you will most likely find your virtual currency on LiteBit ,virtual currency trading platform. I advise you to feed your account via a SEPA transfer to have “credits” on the site. Then when you want to buy a currency, you can pay via Credits and it will be instantaneous and you will not be subjected to the exchange rate.

Stock and Trader

To store your virtual currencies, I advise you to use an online portfolio (Online Wallet) such as Bittrex or Poloniex . So all your virtual currencies will be stored in the same place and you will have better tracking on them.

Sale

To exchange your virtual currencies for money, you are most likely going to exchange your currencies against BitCoins or Ethereum and then exchange them for a transfer in Euros on your account. At the moment, it is much easier to exchange BitCoins and Ethereum for Euros, that is why you will be advised to do this operation there.