Digital currency investing 1.0 Ideas and pointers.
We received a lot of questions at multiple bitcoin and crypto conferences and meet ups: “how to get the maximum out of Crypto” an “what is the best investment”. Is it investing in Crypto companies, day trading or buying collectibles and/or antiques on the fairly new auction houses that have sprung up? We will provide some pointers. All suggestions have merit but all have some problems attached to them.
- Investing your digital currency in Crypto companies or start-ups.
We start with this topic because if you are considering investing in Bitcoin companies you will make a difference to the digital currency world in general. First it is a great way to help the Crypto community because you are helping getting a company to launch or are helping said company gain the necessary funds it needs to grow. There are such great ideas out that that, with some good funding, will turn out spectacular. If you consider investing than there can be several options open to you to get your investment back plus extra profit.
First of all there can be dividends that will be paid out on a weekly/monthly/6 monthly/ yearly basis. Some Crypto companies do not follow the path of giving out dividends and will compensate their investors in another way.
The second possibility to “compensate” investors is by giving them some of their products when they are created. For example a company that is trying to create instant coffee that has alcohol flavour could send out some of their products to their investors. Nevertheless this option only used when companies receive small contributions. It all depends on the company and their standpoint. This can be with crowd funding or with services like Swarm.
Most of the time though, there is a combination of both policies. Every investor gets some dividends, how much is determined on the level of contribution, and some of the company’s products to try out.
Here your investment is fairly safe, provided that you did your research. Remember jumping in feet first is jumping in brains last. We suggest striking up a conversation with the company. 99.999999% of the companies will be interested in having a conversation with you and answering your questions. Plus it’s a win-win for both parties. The potential investor gets his or her information and for the company that needs some cash, or in this case Crypto, injection in their company.
If the company is unwilling or isn’t forthcoming with information this can be an indicator that even they do not know which direction they are going to take. If this happens be extra careful. We will not say “do this” or “you shouldn’t do this”; it’s all up to you and it is your Crypto.
- Day trading on exchanges.
Everyone can do this but, in order to be successful, you need a couple things in your toolbox (and even then it is still a gamble). This is not an “investment” per se, but we received some questions about it. A certain Crypto enthusiast asked us if day trading with a small portion of his/her Crypto was a good idea.
Well it is a good Idea but you have to have an entrepreneurial mind-set. This means that you have to: analyse, read statistics, know the Crypto, the Crypto news and much more before you will be successful. Don’t get us wrong, there are people that are naturals at day trading and make or are making huge amounts of Crypto per day/week and have huge backers that loan them said amount of dollars/euro/whatever to day trade on the Bitcoin market.
Let’s be frank if you see someone buying BTC with the 100’s you know this is just pump and dump, pump and dump. Mostly these guys have the financial real world currency capacity and are coming from a day trading or financial institution where they are currently employed or have been employed.
How to increase your chances at being a successful day trader in Crypto? If you have day traded on the stock market, like the NASDAQ or NYSE, you will have an easier time understanding and figuring out how day trading Crypto works. It goes without saying that research will play a pivotal role in the life of a day trader.
If you do not have any experience day trading or haven’t figured out how stock and day trading works you are a novice and have a lot of research and work ahead of you, provided you want to be a successful day trader. Looking at the risk involved, the necessary research, etc. we feel that day trading is more for the Crypto enthusiast with some experience under his or her belt.
We do not want to discourage the potential novices. We are of the belief that providing people with all the information, including the risks, is the best policy so that the novices know what they are getting into.
Pay attention to people in the day trading communities that are “trying to teach you the ropes” so to speak. These are mostly helping themselves. They prey on the unsuspecting novices that will follow them. If they have enough “followers” they will target a certain coin and begin pumping and dumping that coin. People who follow the advice and “pointers” of these unscrupulous individuals will get burned and lose a lot of Crypto in the end.
The Crypto fora are full of these stories so people be careful when day trading and do your own research. You know what is best for your Crypto and investments, not some random he/she.
- Buying and investing in collectibles and/or antiques.
Another great way to invest your hard earned Crypto is buying collectibles or antiques. There is much less risk doing this than with day trading. First let’s determine what we view as collectible and antique because they are not the same thing.
Collectible: Something people collect that can be limited produced but doesn’t have to be. The age range of the items will vary from new to 99 years of age. For example: the statues of DC bombshells that are limited (to around the 5200 statues) are collectible. So it goes for toys ( like teddy bears, Gi Joe, Transformers, lego, etc) or everyday appliances ( cola cola dispensers from the 50’s, ice cream vending machines, jukebox, trading card (baseball, magic the gathering, ..) etc.).
Antiques: Is everything that is older than 100 years. For example: tables, books, coins, garden ornaments, cabinets, chairs, gold & silver objects, etc.
It can be a bit confusing, maybe more so for our American readers. When we went on a cultural holiday through the west coast states we saw shops that called themselves “antique shop” but they did not sell items that were 100 years or older. This trend of labelling every item that is more than 10 years old as “antique” is also penetrating the auction houses, like ebay, in both the digital as the real world. Some sellers wrongly think that calling something “antique” will increase its value. Which one will get me the best investment; collectible or antiques? It all depends what you want to collect. Another contributing factor is the storage space. For example: If you are buying antique books and storing them in the garage where its wet and damp is not the best way to protect your investment. Again you need to do research before committing to something.
We collect a lot of items that can be labelled as collectibles and antiques. If you want the best possible investment you could go for the precious metal items. This can be golden coins, Silverware etc. Generally speaking every precious metal item does have a small sign on them that tells the buyer/seller what it is. Is it gold, silver, the grade of the silver and gold used in the item, where it was created, etc. If you want more turn of the century jewellery it will be engraved in the item, even if it’s a delicate ring. For more information about coins we refer you to our previous articles.
The name “antique” doesn’t mean that it is always valuable. Collectibles can be extremely profitable. For example: we picked up two star wars statues (2x Princess Leia & R2D2, limited to 2500 pieces) for 100€/each. This is about 136 dollars per statue. 3 months later that same statue was 1059 pounds, which is 1328€ or 1798 dollars and we sold one of the two. As you can see the price fluctuates and is currently at 750 dollars ( or 510 pounds). Add to that: a hefty shipping costs and import tax and you are looking at a 150+ price tag on top of your statue.
There can be potential of generating excellent returns on your investment regardless what investment path you want to take. However with nearly everything in life you need to be careful. Being careful means doing research if you do not want to get swindled, robbed blind or fooled by some crafty crook.
As such we will give some links to books that might point you into the right direction and educate you if you are considering investing in antiques and collectibles. For additional questions you can always contact us.