High risk, high reward with Bitcoin investments

Blake Rutenberg, Staff Writer

Bitcoin is a relatively newer currency as it was founded in the year 2009 by an unknown user using the alias Satoshi Nakamoto. Bitcoin and other cryptocurrencies are different from traditional currencies as no central bank or middle man is required to make trades.

There are 21 million bitcoins in existence today, and unlike paper currencies, bitcoins can’t be created or destroyed, hence inflation or deflation does not exist. This is one of the bigger attractions that originally got investors interested in bitcoin.

One of the main attractions of Bitcoin is the ability to make anonymous transactions. Some stores have begun to adopt bitcoin and allow consumers to purchase goods using their bitcoin wallet. Bitcoin is becoming more and more practical, and with intensive media coverage beginning in 2013, Bitcoin has attracted millions of users.

A popular app Coinbase allows users to purchase cryptocurrencies, such as Bitcoin as well as other currencies, using their bank account. Coinbase has grown to 13,300,000 users since it was founded in 2010. Over the last year, Coinbase has almost doubled their users.

In 2013, Bitcoin was being traded at a range of $10 to $15, but today bitcoin is being traded between $11,000 and $20,000. Bitcoin can be very profitable if you invest at the right time, at the same time, it can also wipe out a large portion of your bank account in the span of a couple hours.

I strongly believe cryptocurrencies are a bad investment due to the incredibly large amount of fluctuation. Over the course of a day, your bank account can double or be completely wiped out. Although long term predictions prove my theory of long run trading to be inaccurate, I have seen friends lose thousands of dollars keeping their money in these markets. Ever since the start of the 2018 year, Bitcoin and other cryptocurrencies have essentially tanked. In a single month, Bitcoin hit a record high coming close to reaching $20,000 and then dropped to right around $10,000. If you are looking to make money off of Bitcoin and other currencies I suggest day trading. Unlike the stock market you can make a significant amount of money in a span of a couple hours. I personally have been able to turn over hundreds of dollars off day trading a cryptocurrency by the name of Litecoin.

There are a couple of lessons I have learned trading cryptocurrencies. Initially, don’t throw money into these markets and hope they’re going to give you a good return because the majority of time they won’t. Additionally, conduct some research, figure out exactly what you’re putting your money into. The techniques one uses to trade via the stock market are essentially useless in the cryptocurrency world. Plan your trades, look for times where the markets hit severe low points, try to calculate and predict market fluctuations because a lot of the changes follow trends. Finally, keep watching your investment. You can go from a lot to a little in an hour; on the other hand, there are certain times to take your money out and leave it in.