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Investing in cryptocurrencies – the road to stability

Recent years have seen a huge shift in our views on wealth. While some have felt the loss of jobs and pay cuts, we have paradoxically started to save more – partly due to blockages and restrictions on movement, but also due to the impulse to cut back on spending and store money for a rainy day. But how can we invest the extra money to achieve stability in the near future?

Investing for Everyone…

It’s not hard to see that there has been a recent surge in young people starting to save more to enable them to retire early.  Many have recognized that investing wisely can help not only build wealth but also improve long-term financial stability.

But why are we choosing to invest now? It’s all thanks to inflation. Inflation is the general rise in prices that occurs every year and causes the purchasing power of money to fall. The rate of inflation can vary widely, but recently many countries have seen rapid increases.

People who are hoarding money to use for later needs to make it work for itself. Leaving money idle will cause its value to decline. Conversely, the more you invest, the sooner you can benefit from the power of compound interest.

Conscious actions

There are many strategies for investing, but most can be boiled down to buy cheap, sell expensive. This is often referred to as “buy the dips”.

This basic investment technique refers to buying more assets as the price drops and during a correction. Although it sounds simple, the investor puts a lot of time into analyzing charts, short-term and long-term moving averages, and historical trends. It is also referred to as “buying big dips” (big dips) or “small dips”. (small dips). The former refers to when the price falls below the average, while the latter refers to when the price falls from where it was last placed. Investors who buy with this strategy can choose to sell quickly for profit or hold the asset to build a long-term position.

Buying an asset when its price is falling is a good strategy, but it has several drawbacks. First of all, it’s hard to say what the value of the asset will look like in the next hour or the next day. So there is another way to invest: buying when the price is lower than the historical average. This is where the concept of a moving average, which illustrates the best possible points to enter and exit the market, comes in handy.

Future assets

Cryptocurrencies are one of the booming investment areas in the current time. They have proven to be the most popular asset of recent, and what’s more, many experts believe that cryptocurrencies could overtake traditional financial instruments.

However, apart from cryptocurrencies, there are other investment opportunities that are holding up well. The top stock recommendations for the coming year are State Bank of India (SBI) PSU, GAIL, HDFC Bank, TCS and ONGC. Real estate, on the other hand, is one of the most popular investment options in general. Recent years have had a big impact on commercial real estate, setting prices at record lows. So experts believe that it is a good idea to buy a commercial property and convert it into a coworking space. Since the demand for coworking spaces is on the rise, this could be an opportunity for steady, regular profits.

Investing in cryptocurrencies – is it worth it?

Cryptocurrencies are a special type of asset. They are distinguished primarily by their volatility, technological potential and a very wide choice of potential coins for investment.

During the year from December 2016 to the end of 2017, the value of Bitcoin increased from $750 to $10,000. This means that anyone who invested $10,000 in December 2016 would have gained a staggering $133,333 in exactly 365 days. In fact, the total market capitalization of cryptocurrencies reached as high as an astounding $500 billion. However, as more and more speculators joined the bubble, it inevitably had to burst. As the price of Bitcoin fell, the prices of all other cryptocurrencies collapsed. However, many investors profited from the speculative bubble. That’s the effect of volatility – the asset’s propensity to generate big losses but also big gains.

Technological potential, on the other hand, makes investing in cryptocurrencies have a lot to do with dealing with technological solutions, such as investing in startups. Here, one considers first and foremost the purpose for which the cryptocurrency was created. It could be a universal means of payment, or a way to create apps or smart contracts – and many other uses. All have implications for potential future value.

The wide selection differentiates cryptocurrencies from most traditional assets. There are over 6,000 different coins that are not related in any consistent way. When it comes to securities, there are also many types, but they are clearly grouped together. Shares of major companies can be found on the biggest and most famous exchanges, various local exchanges sell shares of local companies, and so on. In the case of cryptocurrencies, any dependencies disappear, exchanges offer those cryptocurrencies that they happen to find popular among investors. This means that they are mainly guided by market capitalization rather than actual potential.

Cryptocurrencies of the future

Many people believe that the era of Bitcoin is over. However, there are alternatives. The first is Ethereum, a decentralized software platform that enables the creation and launch of smart contracts and decentralized applications (DApps) without any delay, possibility of fraud, control or third-party interference. Applications on Ethereum are run on platform-specific cryptographic tokens, Ether. Ether is used to navigate the Ethereum platform and is desired primarily by developers who want to create and run applications on Ethereum, or by investors who want to make purchases of other digital currencies using Ether.  Ether, launched in 2015, is currently the second largest digital currency in terms of market capitalization after Bitcoin.

Litecoin, launched in 2011, was one of the first cryptocurrencies to follow in Bitcoin’s footsteps. It was created by Charlie Lee, an MIT graduate and former Google engineer. Litecoin is based on an open-source global payment network that is not controlled by any central authority and uses proof of work that can be decoded by consumer processors. While Litecoin is similar to Bitcoin in many ways, it has a faster block generation rate and thus offers a faster transaction confirmation time.

However, Stellar is considered to be one of the most forward-thinking E-currencies. Stellar is both a currency and a payment platform. It is a payment technology that aims to connect financial institutions and reduce the cost and time required for cross-border transfers as much as possible. It is also a very popular asset among investors, who can purchase it through the Stellar Packet, for example.

As of this moment, Stellar operates a network of decentralized servers with a distributed ledger that is updated every 2 to 5 seconds across all nodes. The most visible factor that differentiates Stellar from popular coins, including Bitcoin, is the consensus protocol. It does not rely on an entire network of miners to validate transactions, but instead uses the Federated Byzantine Agreement (FBA) algorithm for faster processing. There are also many plans for improving the currency’s efficiency and further development.

Investing, then, seems like a proven way to achieve financial stability. However, you should be aware of the risks you are taking and always choose assets that look good for the future.

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