Bill Patalon has a full 2022 crypto outlook - the best cryptocurrencies to buy and hold this coming year.
What is the Best Cryptocurrency to Invest In?
Investing in cryptocurrency is similar in many ways to trading stocks online or through apps. If you’re ready to dive in, read this article and our top crypto predictions listed below, to help set you on the right path today.
Investing in cryptocurrency has become increasingly common among both individual and institutional investors. This is largely due to two main factors: investors who play the crypto market correctly can see enormous returns on investment; and it has become much easier to purchase cryptocurrency in recent years.
For almost the entire first decade after the launch of Bitcoin in 2009, it took more than a bit of tech-savvy to purchase, store, and use all types of cryptocurrency. However, now anyone with internet access can easily invest in many of the top cryptocurrencies using common investing apps (more on that later).
Cryptocurrency investment has proven to be very lucrative for some investors, and many believe there are still plenty of fortunes to be made. For instance, Bitcoin was practically worthless when people started trading it (about $0.0008 per coin). It took the coin a few years to even reach $0.08!
Yet, at times Bitcoin has since soared well above the $40,000 mark, allowing early or timely investors to see massive ROI. It certainly isn’t too late to jump on the Bitcoin bandwagon, with at least one Bitcoin price prediction for 2025 as high as $1 million.
Of course, there are numerous other cryptocurrency options available—many even for the price of Bitcoin back in 2009. Before you jump into the world of cryptocurrency investment, there are few things you should know.
Is Investing in Cryptocurrency Right for Me?
Many investors wonder if choosing cryptocurrency is right for them, and we argue that just about any investor can benefit from adding cryptocurrency to their portfolios. While cryptocurrencies are often more volatile and riskier than stocks, owning just a small amount can expose you to high upside potential. Allocating just 3% of your portfolio to Bitcoin can offer huge growth potential.
And if you have money set aside for speculating on markets, trading cryptocurrencies can be a lucrative avenue as well.
The “Big Money” Boosting Bitcoin
When Wall Street firms and funds (together known as institutional investors) and public companies buy up Bitcoin, they buy it up big, in purchases worth millions or billions of dollars. Their cash influx won’t prevent the price from falling again, but it will keep the price from falling too low. It’ll also encourage others to invest and push Bitcoin to new highs. Here are some of the recent notable “big money” Bitcoin investments that helped push the price over $50,000:
|Company/Fund||No. of Bitcoin||Approximate Value on March 1|
|Grayscale Investments (OTCMKTS: GBTC)||656,166||$31.2 billion|
|MicroStrategy Inc. (NASDAQ: MSTR)||90,859||$4.5 billion|
|CoinShares Group||69,730||$3.49 billion|
|Tesla Inc. (NASDAQ: TSLA)||Est. 40,500 – 52,000||$2-$2.6 billion|
|Ruffer Investment Company||45,000||$2.3 billion|
|3iQ Bitcoin Fund||22,590||$1.13 billion|
|Galaxy Digital Holdings (OTCMKTS: BRPHF)||16,402||$820 million|
Source: Decrypt.co; Yahoo Finance
How to Choose the Best Cryptocurrency to Invest In
When choosing the best cryptocurrency to buy, consider that a coin's value is ultimately decided by five main factors:
- Investor confidence - Do other investors and analysts believe in the coin as much as you do? Does the coin have prominent backers known for their ability to pick winners?
- Competition - How does the coin compare to other cryptocurrencies? Just being labeled a "cryptocurrency" or "altcoin" isn't enough. It needs to offer something better, such as increased security, faster transactions, anonymity, ease of use, or low transaction fees. Or it needs to offer an altogether new feature.
- Developers - What are the credentials of the team building the coin? How often is the project upgraded? What does the coin's roadmap look like?
- Value in financial markets - Financial institutions are increasingly showing interest in cryptocurrency. Many have already started integrating crypto into their businesses. Learn which coins these banks and financial companies are working with, and which ones they're looking to adopt in the future.
- Public interest - Is the coin something the public at large will find useful? Retail adoption adds value through the network effect. The more people using a coin, the more valuable it becomes. Be wary of fads, though. A coin needs to be more than hype and gimmicks (though a sharp crypto trader can make quick profits on "pumps" of trendy-for-the-moment coins).
How Do I Get Started Investing in Cryptocurrency?
Although cryptocurrency is a relatively new investment, getting started is a lot simpler than most people might think.
Choose an Exchange
The first thing you should do is sign up for a cryptocurrency exchange. These exchanges will allow you to buy, sell, and hold cryptocurrency. Some common cryptocurrency exchanges include Coinbase, Kraken, Gemini, Binance, and more. When choosing a cryptocurrency exchange, compare the features of each. For example, you may want to choose an exchange that lets you withdraw your crypto to your own personal wallet for safer keeping.
Set Up Your Bank Account
Next, you’ll connect your cryptocurrency exchange to your bank account. To do this, you will need to provide personal documents such as your driver’s license, social security number, and bank account information. This will be how you transfer funds from your cryptocurrency wallet to your bank account.
Place an Order
Now, you’re ready to place a cryptocurrency order. Cryptocurrency exchanges offer many of the same features as traditional stock brokerage options. You can pay, sell, and trade cryptocurrency investments quickly and easily.
How to Play Bitcoin with Stocks
You don’t have to buy Bitcoin to profit from its gain. You can also buy stocks that are correlated to Bitcoin or companies that are investing in BTC, like these five we have our eyes on now:
|STOCK||PRICE ON 8/5/21||YTD GAIN on 8/5/21|
|Riot Blockchain Inc. (NASDAQ: RIOT)||$33.57||104%|
|Grayscale Bitcoin Trust (OTCMKTS: GBTC)||$33.74||-3%|
|Overstock.com Inc. (NASDAQ: OSTK)||$68.28||38%|
|MicroStrategy Inc. (NASDAQ: MSTR)||$717.66||68%|
|Snap Inc. (NYSE: SNAP)||$77.11||55%|
|Silvergate Capital Corp (NYSE: SI)||$114.96||71%|
|Coinbase Global Inc. (NASDAQ: COIN)||$260.74||-20%|
Other Ways to Buy Bitcoin
In addition to using an exchange, you can also buy Bitcoin using apps like Robinhood, Cash App, and even PayPal. You can also buy Bitcoin at a Bitcoin ATM, although the fees can be high (as high as 10%).
Lastly, you can buy Bitcoin through a P2P (peer-to-peer) network. These networks consist of individuals selling Bitcoin themselves. Bitcoin.com has its own P2P trading platform
Want to learn more about getting started with Bitcoin? Check out our guide How to Buy Bitcoin. Luckily, you don’t have to understand all the technical ins and outs of cryptocurrency. All you need to know is how to buy, sell, and trade this potentially valuable investment.
- 2022 Crypto Outlook: The Best Cryptocurrencies to Buy and Hold (and Some “Lotto-Ticket” Plays)
- 2022 Crypto Price Predictions
- Why I’ll Buy Crypto Over Stocks Any Day of the Week
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- Yes, Cathie Wood's $700,000 Bitcoin Price Prediction Is Legit
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- Gala Price Prediction: 621% Growth Potential
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- How Much Bitcoin Should I Own? - Here’s the Answer
- The Six Best Crypto Starter Coins to Buy
- How to Find the Best Microcurrencies to Buy
- Why Microcurrency Trading Is Crypto's Best Kept Secret
- Three Bitcoin Stocks Better Than MicroStrategy
- Coinbase Stock Price Prediction: Buy This Crypto Trading Platform Today
- Mana Coin Price Prediction: Is 400% Just the Beginning?
- Bitcoin ETF: Should You Buy or Pass?
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