How To Get into Crypto (While Prices Are Low)

2017 was a wild road for crypto, and people are wondering what the future of blockchain technology could be. After all, since we’re past the gold rush, we’ve been picking up the pieces on what we should and shouldn’t gravitate towards. And if you’ve been thinking about getting into crypto while prices are low, then this could be an excellent time to do so. Here’s how:

The Basics

This past year saw the meteoric rise and fall for crypto. The three major coins of Bitcoin, Litecoin, and Ethereum all took hits, with things slowly coming back to normalization. While it sparked an initial interest in blockchain and cryptocurrencies, the actual results saw a huge interest by main street investors, only to tank after a lot of power players stepped out. However, despite the fluctuations, crypto is well on its way back up.

An excellent example of crypto’s trajectory is with the price of Ethereum. According to CoinMarketCap, at the start of 2018, the price of Ethereum was at $762, which is now down to $222, a 71 percent decrease. However, that’s not to say the number of transactions has slowed, because as noted by Consensys, over 240,000,0000 transactions have been conducted on the Ethereum network since its inception, which no matter the fluctuation in price, proves that there’s still a utility to currencies like ETH. This is the case because ETH is the foundation of many crypto applications.

Although Bitcoin and Litecoin have stored value as a token (similar to how gold or silver works), Ethereum is the only coin out of the three most prominent to have blockchain applications built on top of it. Think of it similar to how you need an iPhone to buy apps from the App Store, Ethereum has apps built on top of its network that use ETH either internally or to convert for what’s called altcoins (note: altcoins can exist independently from Ethereum; however, a lot of the most popular are built on top of ETH). These blockchain applications have ranged from public ledgers for real estate assets to food production, with most still in their infancy. And with so many different types of altcoins out there, it can be somewhat overwhelming to know what’s best, which is why you should get some good sources of intel.

Who To Listen To

A big part of being smart with your crypto investments is not only knowing how to hedge your bets but additionally where to look in who’s right about their predictions. Although blockchain has a lot of great minds in it, you need to be careful over who might be trying to push information for personal gain versus giving a genuine perspective on the markets. The best place to start? With those who understand how blockchain could impact their prospective industry.

An excellent example is with the real estate industry, which as noted in a survey by Deloitte, 36 percent of commercial real estate think blockchain could help immediately in the industry. As the blockchain can keep track of not only property records but additionally provide access for multiple parties to invest in a single property or asset, the potential opportunity seems tremendous, but that doesn’t necessarily mean everyone’s right on their predictions. Instead, it’s best to check out people who already have worked in the industry, such as Thomas Zaccagnino, whose firm Muirfield Investment Partners specifically focuses on blockchain real estate. As an investor, it’s important to take the time to do your due diligence, because while this is a great industry to invest in, that also comes with its nuisances amongst certain sectors.

What Industries To Watch

As you start to dive into the potential sectors impacted by the blockchain, there are a lot of opportunities that on paper sound nice but aren’t always what they’re cracked up to be. Quite simply, there are a lot of people who are claiming to be putting Uber or Amazon on the blockchain, only without a real foundation to why those applications need blockchain in the first place. Remember, a big part of blockchain technology is to introduce decentralization to a lot of industries, and with a lot of companies out there playing the role of a central authority figure, it’s not only counterintuitive but also lends itself to just investing in essentially what’s a sophisticated penny stock. That’s why being patient is a wise choice.

One suggestion as you work through which blockchain solutions to invest in is to follow venture capital as much as the ICO; because as noted by CB Insights, 2017 may have seen over $2 billion invested into ICOs, $830 million was still put into blockchain companies by traditional VC. With the recent downturn of main street investment into crypto, a lot of companies have been foregoing ICOs in favor of venture capital, with the public token sale coming later on. These are generally going to be safer bets as a large amount of capital is already behind them.

Overall, crypto is about betting on what applications you believe the blockchain has the potential to impact. With that being said, it’s okay to sometimes go against the safe bet and instead go with your gut. Who knows? Your speculation could be what takes you to the moon.

What excites you about getting into crypto? Comment with your insights below!

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