Cryptocurrency: a new and powerful investment vehicle
This article is written specifically for a person with the following characteristics:
- a solid background in traditional investment and trading (stocks, real estate, precious metals, etc)
- a person who knows the difference between currency and money (i.e. the US Dollar is currency but it is not money – gold and silver are money)
- a person who knows little or nothing about digital money (yes money, not currency) but is open to seeing the potential earnings possible through digital money
First, digital money is commonly known as cryptocurrency and the most widely known cryptocurrency is Bitcoin. What makes Bitcoin and other cryptocurrencies attractive?
Manyfold more leverage than penny stocks
The small division of the US dollar is a penny, which is 1/100th of a dollar. The smallest unit of a bitcoin is a hundred-millionth of a dollar. In other words, the cheapest penny stock could cost $0.01 while the cheapest cryptocurrency could cost 0.00000001 and if that same cryptocurrency’s price moved to 0.01, you would be looking at a MILLION-FOLD gain value.
Yes, I know that is hard to believe. But it has already happened many, many times in the short history of cryptocurrency. The most famous cause is when a person bought a pizza for 10,000 Bitcoins, which at the time cost $41.00. In other words, at that time a single bitcoin cost $0.0041 – not even a penny per bitcoin. But the price of Bitcoin as I write this article is $400 per bitcoin. So something that once cost less than a penny now costs $400.00 each. That means a $41 dollar investment is now worth 4 million dollars in less than 10 years.
So unprecedented leverage is the first advantage of cryptocurrencies. Take a look at the 24-hour gains of the cryptocurrencies with the largest market cap and you will see single-day double-digit gains every day somewhere in the top 20… this will show you the power of cryptocurrencies to earn healthy gains quickly.
With most common forms of money such as gold or silver, you can only access your wealth when you physically hold it. If you are in Switzerland and your gold is in Brazil, then you must somehow get access to the actual gold in Brazil before you can use it as a medium of exchange.
Cryptocurrency wealth can be placed in “cold storage” just like gold or silver, but it is also possible to place some or all of your earnings in web-based wallets that you can access anywhere that you have an internet connection.
In other words, cryptocurrencies have all the properties of traditional real money, with the added advantage of portability. Video 3 on my Wealth Builder’s site does a good job of covering this.