Why invest in cryptocurrencies?
2017 has seen the rise of other many new Cryptocurrencies with different attributes. Previously, Bitcoin has been the only big player on the market, but alternative coins such as Ethereum, Litecoin, Ripple and others now make up more than 50% of the total market. This opens up the opportunity for trading these different currencies on a market where the traditional giants, investment banks and venture capital firms have not yet reached. Almost every currency has a subforum on reddit where you can gather more news and information, as well as reading the white paper and material that the developers of the currency have released.
Because this market is so young and booming, you can gain a bigger edge trading on the cryptocurrency market than the regular forex or stock-market if you play your cards right. In addition to trading the specific currencies, you can also by so called Tokens. Tokens work like stocks of a company, but for decentralized applications (Dapps) built on Blockchain technology. The vast majority of those Dapps are programmed and released on the Ethereum network in so called ICOs (Initial Coin Offerings). If you believe in the technology or product that a certain group of developers are releasing through their IPO, you can use your cryptocurrencies in order to buy Tokens (parts) of these applications.
Right now there are multiple ICOs happening every week and they have been generating a lot of interest. Some of the most notable ones that have been launched on the Ethereum network are Golem (GNT), Basic Attention Token (BAT) and Gnosis (GNO). In order to use these different decentralized applications, you will have to buy tokens and use those tokens as a mean of payment for the service that the certain Dapp provides.
So if I am investing in different companies anyway, why should I just not put my money in the stockmarket?
In todays stockmarket it is very difficult to beat the index return consistantly, and even if you are one of the best traders you will only beat it by a few % in the long run. This is because there are big investment banks with tons of resources that will analyze information and predict the future value of companies. This means a single investor will have a very hard time competing with those huge firms.
However, only very few investment firms has invested in cryptocurrencies yet. That opens the door for smaller investor to find and gain edges on the market, since you are not competing against billion-dollar firms with unlimited amounts of resources. Instead you are competing against a majority of other single investors, which is a lot easier to beat if you have enough information and know how to apply it to your investment strategies.
In addition to this, as any investor knows it is important to diversify your portfolio of investments. Tradtionally people have chosen to invest in real estate, gold and other natural resources in order to not expose themselves too much to the stockmarket. Cryptocurrencies is now another great way to diversify as you are investing in something decentralized which will not be as strongly affected by the actions of one single entity, for instance decisions made by a government or another crash in the banking industry.