In the first days of cryptocurrencies, when Bitcoin was the only option, early users bought it because it looked like something fun to do. Because it was a brand-new innovative thing that had the potential of becoming huge, or simply because it allowed them to make transactions without a bank getting involved. Now that the dust has settled, the reasons for getting into cryptocurrency are much more diverse. There are more than 5,000 cryptocurrencies, and the market for crypto buyers isn’t made up of young tech people anymore. Investors have started to include cryptocurrencies in their portfolios for diversification, and even institutions are entering the game by offering crypto custody services. Especially after the pandemic hit and Bitcoin recovered faster than fiat currencies, people understood that crypto is here to stay, and ignoring it would be a huge mistake.
If you’re one of the people who recently invested in crypto, you may be wondering what happens next. You took the first step, now what do you have to do to enjoy its potential and be a part of the crypto revolution? Well, in 2020, you definitely have more options compared to the first days of Bitcoin. There isn’t just one big, universally acclaimed way of using crypto; it all depends on your goals and skills.
You can hold onto it
In September 2016, the price of one Bitcoin was somewhere around $600. Now, its value is close to reaching $11,000. There are lots of cautionary tales of early crypto adopters who didn’t believe in its long-term potential and used it all once or misplaced their hard drives, losing the equivalent of what is now millions of dollars. Experts estimate that Bitcoin’s value will increase even more in the future, which is why they recommend people to hold onto it and reap the benefits later.
People who prefer this strategy are called HODLers – investors who buy and hold their positions no matter the price. And there are a lot of HODLers in the crypto community. In fact, a recent poll revealed that up to 72% of crypto investors would hold onto Bitcoin even if the price reached zero. Bitcoin’s credibility has increased exponentially in the past few years, and it’s incredible how many people are willing to hold on to it and even buy more when the price drops. It might sound like a crazy strategy for traditional investors, but when you’re dealing with an asset as volatile as Bitcoin, it makes sense. Still, even if you swear by HODLing, it’s a good idea to rebalance your portfolio from time to time (sell high, buy low), to prevent Bitcoin from taking up the largest part of your investment portfolio.
One crucial thing to remember when holding on to your crypto investment is that security is key. Well, security is important all the time, but when you have the equivalent of $100,000 in your eWallet, you need to be extra careful when storing your password.
You can trade it
If you’re a Forex trader who has recently taken an interest in cryptocurrency, we have some good news: more and more Forex brokers accept crypto in addition to fiat currencies. So, if you couldn’t make up your mind on one of them, you can now trade both. The principle is roughly the same as with traditional Forex trading, but instead of using fiat currency pairs (e.g., USD/EUR), you use pairs between a cryptocurrency and a fiat one (e.g., BTC/USD, ETH/USD). Forex brokers accept different currency pairs, so always check what options are available and the best Forex trading systems to follow before opening an account.
Crypto Forex trading is starting to gain more followers thanks to benefits such as:
• Decentralization. Since cryptocurrencies aren’t tied to a central bank, they aren’t under the influence of inflation or interest rates.
• Low deposit limits. Some brokers have limits as low as $30, which, coupled with existing promotions and bonuses, makes trading profitable for beginners.
• Low fees. Crypto Forex trading is still new, so brokers have low fees to attract as many new traders as possible.
• More freedom to trade. You can trade with crypto no matter where you are based, as long as Forex is legal in your country or region.
• High leverage. If you’re an experienced trader and you’re comfortable with the higher risk, this option could unlock many opportunities for you.
As always, don’t forget that trading will only involve a certain degree of risk, and crypto Forex trading is no exception, especially considering how volatile Bitcoin is, so always start by establishing the risk you’re comfortable with.
You can use it to buy products and services
There’s a lot of talk about the potential of cryptocurrency as an investment, but what if you’re not an investor and you want to use Bitcoins the same as regular currencies, which is to pay for stuff? A few years ago, you didn’t have too many options, but now more and more merchants have realized that they can’t afford to ignore the most up-and-coming payment option.
Granted, we’re still several years away from using Bitcoin to buy a can of Coke from the shop down the street, but things are clearly evolving. Online retailers were among the first to accept crypto payments, so you can use it to buy products and services on websites like Microsoft, Namecheap, or CoinCards. You can also use crypto to purchase plane tickets, basketball tickets, hotel reservations, or even use third-party services such as Speedn to buy Whole Foods groceries.
As far as physical locations go, it pretty much depends on your location. The US has a lot of restaurants and cafes that accept Bitcoin, but it’s worth double-checking in advance to avoid surprises. The good news is that major chains are starting to like the idea too. For example, KFC Canada has been accepting Bitcoin payments for a while now, and Starbucks has been rumored to start accepting them sometime in 2020.