One thing’s for certain: There’s certainly no shortage of them. Dramatic price swings or sensational headlines, that is.
Considering that market prices are currently so speculative that they’re almost completely a reflection of sentiment and emotions.. It makes sense there’s an abundance of both.
Although these sometimes misleading headlines and subsequent “news” articles, have led to many fundamental misunderstandings about both Bitcoin and cryptocurrency, in general, they’ve also drawn an absolutely enormous amount of attention to the young digital markets.
What hasn’t quite made it into those cleverly worded headlines yet is the fact that Bitcoin is just one of many dozens of new digital currencies, or cyptocrurrencies. In fact, there’s an entire global trading market quickly emerging from the depths of the interwebs. Check out this post if you’re interested in the origins of Bitcoin and crytpo.
In fact, many believe there is nothing less than a fundamental economic shift on the horizon – And that Bitcoin is simply the first cryptocurrency, and instead of it reigning alone as the singular digital currency, it simply paved the way for others to be introduced to the mainstream.
Of course, like most things in this largely undefined industry, this is completely up for debate as many people still believe that Bitcoin ultimately is going to be the single reigning force in the crypto-market.
Here at CoinTrader, we’ve always held the opinion that there’s enough room for more than one digital currency in this vast market, and that we’re not only witnessing the birth of Bitcoin, but also the birth of an entire digital, global, crypto-coin market.
Make no mistake, even if the final outcome is that Bitcoin leaves absolutely no rooms for any other alt coins – There’s still lots of money flowing around in these new digital markets, and the fact that you’re reading this before most people even know what crytpocurrency is, means that you may be in pretty advantageous position provided you choose to play.. and provided you play your cards right, of course.
If this is the first time you’re hearing those names.. Then they may sound a bit… a bit gimmicky to you.
Don’t worry, you’re not alone.
After all.. these are not only brand spanking new markets, but also new technologies. Things can seem somewhat “alien” to a newcomer who first delves into this online world of digital coins.
That said, some crypto-coins are widely considered to be pre-mined, over marketed, pump-n-dump schemes. We’d be inclined to agree.
Make no mistake about it though – despite the quirky names, and sometimes shady beginnings – there are serious amounts of money being poured into these exciting, and very volatile new coin markets. That’s not say that all of the thirty or so digital coins that have seemingly popped up out of nowhere in recent months are the real deal.. just that it’s currently one of the few places where you can watch millions of dollars swing around in sometimes triple digit percentage increments.
So, if you’re thinking about putting some of your “fiat” in these undeveloped young markets – Just know that it truly is the digital wild west out there. While there’s the potential for huge gains to be realized, there’s also ample opportunity for huge loss.
Just How Many Crypto-Coins are There?
That can be a difficult question to answer, with new alt coins popping up seemingly every day.
At the time of this writing, CoinMarketCap.com currently has no less than forty three listed with a total market capitalization in the tens of billions. Admittedly, the large majority of that money is in Bitcoin, but there’s at least one that’s gaining significant traction, and has garnered a respectable market cap - Litecoin.
The rest are significantly behind both Litecoin and Bitcoin, take a look for yourself – Here’s the top ten cryptocurrencies and their approximate corresponding market capitalizations:
- Bitcoin - 13 billion USD
- Litecoin - 1 billion USD
- Peercoin - 110k USD
- Quarkcoin - 64k USD
- Namecoin - 55k USD
- Worldcoin - 27k USD
- Megacoin - 26k USD
- Primecoin - 16k USD
- Feathercoin - 15k USD
- Zetacoin - 14k USD
As you can clearly see.. Bitcoin is currently the undisputed champ of the digital coin market. Also notice that Litecoin has reached the significant milestone of 1 billion market cap, and over the past few short weeks has gained some serious ground on Bitcoin – but still far behind, no doubt.
Also worth noting is just how small some of these market caps are.. It’s not often one gets to bear witness to the birth of an entire currencies market.. take note, and come back in a year to see the difference. If recent growth trends continue, the difference should be quite drastic indeed.
How To Invest in Cryptocurrency?
First of all… perhaps “invest” isn’t the best word to use.. perhaps “speculate” would be more fitting, seeing as how there really is no historical frame of reference from which to draw investment insights and strategies. E
Semantics, I know. Whatever you choose to call it, probably the best way to go about getting your foot in the crypto-coin market, for most, is by purchasing Bitcoin through Coinbase.com.
You see, in order to buy any of the other alt coins such as Litecoin, Peercoin, and Megacoin, you must purchase them with Bitcoin. In other words.. even if you have no interest in investing in Bitcoin, and only wish to buy Litecoin and Primecoin, you will still need to buy Bitcoin first.
There are other places to buy Bitcoin but in our experience Coinbase is by far the easiest entry point for a citizen of the U.S. Feel free to chime in below in the comments section if you think there are better entry points than Coinbase.
That’s the first thing you need to know – In order to buy any of the above digital coins, you must first convert your dollars into Bitcoin. Only then, can you transfer your BTC to one of the many exchanges and purchase any of the alt coins.
So.. if your BTC wallet is empty, check out our Coinbase review and how-to-guide for a more in-depth explanation on the best way to buy Bitcoin, at this time.
Okay – good.
Now all you have to do is transfer your BTC to an exchange where you can then use it to buy any of the dozens or so pump-n-dump schemes and legit alt coins – Choose wisely.
A few things to keep in mind are that Bitcoin serves as the sort of universal cash of the alt coin world. If that sounds complicated – don’t worry because it’s really not, and once you’ve made a few digital coin transactions you’ll see that’s the whole point – Digital cryptocurrencies are simple, they’re just new and therefore intimidating to some. Although, what can get a bit confusing are the different denominations of BTC, LTC and the others.
Combine that and the current high dollar value of Bitcoin – If you get in a rush and accidentally put a decimal place one space to the left of where you actually intended.. it can be a pretty pricey mistake. So gamble… errr, I mean invest with caution.
And never forget you’re playing in the digital wild west.. There’s nobody to call if you fat finger three thousand down the virtual drain pipe.
Besides that concern, the important thing is to get accustomed to and comfortable with are the interfaces (and lag!) of the various exchanges.
It’s also important to note that not all of the exchanges trade in all of the various digital coins.. so if you’re looking to buy into that obscure new digital coin that you read about somewhere.. you may have to hunt down the exchange that has that particular coin available to trade.
Also, depending on the particular exchange, BTC usually serves as the sort of universal exchange medium. For example: you could buy Worldcoin with Bitcoin, but then if all you had was Worldcoin.. You would have to first trade back into BTC before you purchased a different coin. You, for now, can’t use that Worldcoin to buy Quarkcoin.. only Bitcoin can be used for that. Not a huge deal, but certainly worth noting.
Useful Websites and Resources.
One of the cool things about Bitcoin and digital currency is that all transactions and accounts are recorded, and available for the public to see, in what is known as the block chain.
This allows for an abundance of information that can be used to gain insights into the crypto-markets. Fortunately, the collation of this valuable information has already begun, and crafty entrepreneurs and webmasters alike have created many useful and innovative websites and resources to keep track of this fast paced new digital currency market.
CoinMarketCap.com, whom we referenced above, is a great bookmark to have on your browser.. it gives you a quick, clean, birds eye view of all the important stats. By keeping an eye on this website, it’s easy to see if any of the newer, and smaller coins are rising up the rankings faster than normal. Daily jumps of 100% or more are common place… but so are drops. This site will help you keep track of both.
If you’re looking for Bitcoin charts, you need look no further than BitcoinCharts.com and BitcoinWisdom.com. These two sites have some of the best and accurate charts around. You may want to take note when you’re looking at charts that some have recently switched their BTC unit of measurement to mBTC. Which simply stands for “millibit”. MBTC is simply one thousandth of a Bitcoin. For example: if Bitcoin is at a market value of exactly $1000.00 then 1.0 mBTC would be worth $1.00. This switch isn’t yet widespread, but is growing, and therefore certainly worth noting.
No list of Crypto resources would be complete without BitCoinTalk.org and the Bitcoin sub reddit where you can learn what others think about this whole thing and get answers to any questions that you will undoubtedly have. After that, be sure to check out FiatLeak.com to see exactly where those bitcoins are headed.
All these websites will help you gain valuable insight, and guide your digital coin trading decisions.
Like we said before – This is still the virtual wild west, where the tentacles of regulations haven’t manage their way in yet. While this may sound like a great thing to some, and it mostly is, there’re down sides to a complete lack of regulatory oversight that you should at least familiarize yourself with if you plan on trusting any of the many exchanges with your precious BTC.
There have been many reports of exchanges that have suddenly shut down and disappeared with tens of millions of dollars worth of Bitcoins being lost by traders and those that use these sites simply as online wallets. Of course, the story is that the site has been “hacked”, and while it’s certainly possible – and maybe even the case – Considering the mostly anonymous nature of most cryptocurrency, they’re pretty easy to steal without leaving much of a paper trail behind.
Either way, the generally accepted rule of thumb is to only keep your coins on the exchanges long enough to make your trades, and then transfer them back to your normal storage method. Whether that be a cold wallet or online wallet, or any other various digital coin storage solutions.
Let’s do a brief overview of the top Bitcoin and cryptocurrency exchanges:
MtGox.com is one of the more well known BTC exchanges. They currently only offer Bitcoin trades, and while rumor has it that Litecoin will be added soon, it remains just that: a rumor.
Do a bit of Google digging and you’ll discover that many people are having issues with MtGox temporarily freezing their accounts directly after a deposit has been made. Apparently, with a locked account, you’re able to deposit Bitcoin, but not withdraw it during this period of account suspension.
In order to have your account unlocked, you have to send in quite a bit of personal information including a copy of your picture id. We’re not saying that you shouldn’t use MtGox, just that you should make sure account is fully verfied before you deposit any BTC or cash into your trading account.
We’re big fans of Coinbase.com here at CoinTrader. Also a “bitcoin only” exchange – With an easy to use interface combined with having a reputable team behind it, and unlike most other exchanges – Coinbase is based in the U.S. out of San Francisco – Trusting them with access to your credit card or bank account will be a lot easier knowing they’re under the jurisdiction of the same governing body as said bank account or credit card.
Btc-E.com is probably the most popular exchange currently, and it’s is a great place to transfer your first small bit of BTC to trade for a few Litecoins or Megacoins. While not offering the entire spectrum of cryptocurrencies, Btc-E has all of the top digital coins and more than enough to get started with. The site’s chat box is notoriously known as the “troll box”, and just as notorious for it’s entertainment value… but if at any time you find yourself making trade decisions based on something you read in the troll box – It’s time to slowly back away from your computer, hit the power button, and sleep on it a bit. You’ve been warned.
Bitfinex.com is a Bitcoin AND Litecoin exchange based out of Hong Kong that has built a solid reputation among many traders. The addition of Litecoin makes this trading platform especially attractive to those who’ve been patiently waiting for MtGox to add Litecoin. Bitfinex fills that demand with their choice to include LTC right alongside BTC. A choice that we’ll likely see many other Bitcoin only exchanges make in this coming calendar year.
Cryptsy.com is the exchange you go to when you can’t find a specific coin on any of the other digital currency exchanges. From Sexcoin to BBQcoin.. They’re all here. One of the drawbacks of Cryptsy is that the site seems to really struggle under heavy traffic load. Like many of these exchanges.. digital currency trading, fueled by Bitcoin, has risen faster than expected and their site infrastructures just can’t handle the increase in numbers. This becomes very apparent on Cryptsy when lag times become so slow that you’re literally watching the prices of coin rise and fall while you’re waiting for your trade to go through – frustrating to say the least. There have also been recent reports of users having their coins disappear while in Cryptsy.
That said.. If you want to be an early adopter of a specific coin.. it may just be a risk you have to take. Personally, none of the staff here at CoinTrader has ever had a problem with Cryptsy other than the aforementioned lag times.
At the time of this writing, it’s fairly slim pickings when it comes to trading software and bots engineered specifically for Bitcoin and other alt coin trading. Fortunately, the landscape isn’t completely barren in the crypto trading software space. There’re a couple of emerging trading platforms that look very promising – and while you can tell that the software’s interface isn’t completely polished.. they’re still leaps and bounds better than making trades directly on the exchanges.
Sign up to the top three or four trading exchanges.. Connect them all to a decent trading client designed to work with said exchanges.. and you’re already way ahead of the game. Currently, there are two solutions that seem to be worth your consideration:
CampBX - This is a web hosted software solution that has lots of people excited. With billions of dollars moving around in these young digital currency markets, there’s a real demand for a well executed Bitcoin trading platform. Not to mention, CampBX is an online platform rather than having to be downloaded. With a growing number of people accessing the web via mobile devices – CampBX is in great position to fill that market void.
Cryptoboss - For those who don’t need a cloud based trading platform, Cryptoboss is what you’re looking for. While currently still not as polished as CampBX, it does have a lot to offer in terms of giving you that extra edge. For instance, the software has bots built in that can be set to auto trade and sell. It also has beautiful charting if you’re big on technical analysis. To read more, be sure to check our Cryptoboss review.
Once In A Lifetime Investment Opportunity?
Easy now.. Let’s not go throwing little Susie’s college money into the extremely young and volatile digital currency markets. That said.. the youth and volatility are the very things that make Bitcoin, Litecoin, and the rest, such attractive and tempting investments. All of that big movement and steady, rapid growth is sheer excitement and can mean huge profit when your on the right side of the trend.
Of course, there’s always the buy and hold strategy. The standard advice from those that see the entire cryptocurrencies market as the next major long-term bull market. If that’s the case – then this is indeed the opportunity of a lifetime. History doesn’t often provide the opportunity to bear witness to the birth of an entirely new market. Much less, those with the potential scope and magnitude of a currency market.. an instantly transferable, global, digital currency market.
Or…. the entire crypto market could crash into a beautiful oblivion before you brush your teeth tomorrow morning.
So while it can’t really definitively be said that these markets are indeed a “once in a lifetime opportunity” – It’s becoming more and more obvious that anyone reading this has front row seats to what could be the emergence of one of the most disruptive technological innovations since the internet itself.
Truth is: no one really knows. Of course, we all have our predictions, opinions, and unsolicited rants… What’s yours?