Investing in cryptocurrency

Remi Foult
Aug 26, 2017 · 3 min read

Often, friends, collaborators, or even my family members ask me the exact same questions:

  • Should I invest in cryptocurrency?
  • How should I invest?
  • Which one should I pick? Bitcoin? Ether? Others ? ICOs ?
  • Is it risky at all?

I won’t lie: investing in cryptocurrency is definitely risky.

It is a well-known fact in finance, the higher the return the higher the risk. If anyone tried to talk you into a very high return investment without any risk involved, it is most probably a scam.

Investment type

Should you invest?

Now that you know about the risks involved, I’d add that the price of cryptocurrencies is very volatile. In other words, fluctuations are usually like roller coasters. The price variations can reach up to 20% in a day, whether it’s up or down, and quite regularly.

The question is: is it still interesting to invest today knowing that Ether went from a $10 value at the start of the year to $300 to date and the bitcoin from $1000 to $4000 ?

I obviously do not have a straight answer, and, unless someone owns a crystal ball, no one can predict such things.

However, it is taking a chance on the future. Today, cryptocurrencies globally represent a capitalization of $110m, which is a lot, but still 200 times less than the total of gold on earth. Some even argue: “if the bitcoin becomes a sound investment enabling borderless exchanges across the globe, then it is worth way more; however, if it fails to do so, it is worth nothing”.

Exchanges

If you are determined to invest in cryptocurrencies, here are a few exchange platforms I would personally recommend:

  • Paymium : to buy Bitcoin in France (however, volumes are low)
  • Kraken : to buy a variety of crypto currencies — approximately 20 types (deposit with a bank transfer)
  • Lykke : Mobile App that allows you to buy ether and bitcoins easily by bank transfer. It is important to highlight that unlike all of the other centralized exchanges, Lykke is half decentralized, meaning that their security is much higher.
  • Bittrex : allows you to trade more or less 50 cryptocurrencies
  • Poloniex : crypto currency only exchanges, this marketplace offers the highest number of cryptocurrencies available for exchanges, with the bitcoin as the pivot currency

How to invest in an ICO

An ICO is a fundraising directly on the Blockchain. For example, the next decentralized Uber can fundraise ethers against tokens that will later on enable the investor to buy rides on their platforms.

Most of the ICOs are fundraised with ether or bitcoin. Therefore, you’ll need to buy ethers or bitcoins first on one of the platforms mentioned above before you can participate.

Then, you’ll need to find the reception address of the ICO on the company’s website and send your money to receive tokens in exchange.

Obviously, investing money in a company that wrote a white paper and created a website without prototype is highly risky.

However, people who invested in Ethereum’s ICO back in 2014 could get 2000 ethers for a bitcoin. The bitcoin was worth $600 at that point.

Today, these same 2000 ethers are worth $600,000, which represents a 100,000% gain.

Written by Rémi Foult in collaboration with Lena Pastor.

Donations

Bitcoin : 1K6YtQRnyCyAseXM2ruhhkxedSmpkEXLuo

Ether : 0xd26194bfde220560d544dba93654befb9b33425d

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Thanks to Léna PK

Remi Foult

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