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The last couple of months of 2017 ushered in a new era of investment opportunity for people across the globe. The term ‘cryptocurrency’ came out of the dark corners of the Internet and into the mainstream vocabulary thanks to something called Bitcoin. In January 2017, one Bitcoin cost around $1,000. As of this writing, one Bitcoin costs around $16,000, offering an insane return on investment for those who were able to purchase Bitcoin at a low price. “Bitcoin mania” struck not only the United States but many other countries, especially Japan and South Korea. Suddenly, cryptocurrencies were brought into the mainstream ascending from relative obscurity.
Bitcoin is one of many cryptocurrencies available on the market. It is the most well-known and the most expensive. There are a slew of new ones like the Veridium Ecosystem or the Hive Project but these are eclipsed by Bitcoin. It has a market capitalization of $250 billion, meaning that much money is currently invested in Bitcoin. What makes Bitcoin so valuable is the fact that it’s the oldest, most established, and one of the rarest cryptocurrencies, with a maximum supply of 21 million coins. This may seem like a lot, but most other cryptocurrencies have a much higher supply. These aren’t physical coins like nickels and quarters. These are digital coins, and you can buy them on one of many exchanges. On a basic level, Bitcoin can be looked at as a commodity, such as a share of common stock. On a functional level, websites such as Overstock.com accept Bitcoin as a form of payment. Imagine if Amazon or Walmart accepted a cryptocurrency such as Litecoin? This would drive the price of the coin considerably higher.
As of this writing, the total market capitalization of all the cryptocurrencies available for purchase is $775 billion, according to coinmarketcap.com. That’s an astronomical number that will most certainly hit $1 trillion in the coming months. I am of the opinion that this period in time is a once in a generation investment opportunity for the average person who has a few thousand dollars of disposable income they want to invest. After Bitcoin, the rest of the top 10 cryptocurrencies in terms of market capitalization are Ripple, Ethereum, Bitcoin Cash, Cardano, NEM, Stellar, Litecoin, TRON, and IOTA. These rankings are subject to change on a daily basis depending on the amount of money flowing into and out of these currencies.
Investing in cryptocurrencies is extremely risky. There are many peaks and valleys and major swings in price. No one can possibly predict the future prices of these coins. For every person who says Bitcoin is a bubble and will burst is another person who says Bitcoin will hit a $50,000 price (if not higher) in 2018. Most Americans involved with cryptocurrencies are using the free app Coinbase. Through Coinbase, you can purchase Bitcoin, Bitcoin Cash, Litecoin, and Ethereum at the current market price. You can connect your bank account or pay with a credit card, and once the transaction is complete, the coins will be stored on the app. You’ll then be able to see your gains and losses on a daily basis. If you want to purchase any of the other cryptocurrencies, a popular exchange called Binance is the place to go. You’ll be able to purchase hundreds of other coins and tokens through Binance using Bitcoin or Ethereum that you purchased on Coinbase.
The future seems bright for cryptocurrencies as they finally enter into the mainstream. What’s even more exciting, according to sites like foam.space/ is the potential for blockchain technology, the technology that Bitcoin and other cryptos are built on, and how it can be integrated into our daily lives. I see the next couple of years as boom years for cryptocurrencies before leveling off at some point. I currently hold positions in several cryptos, and I’m excited to see what 2018 has in store for this highly speculative industry.