A man in New York City made $2 million when he invested just $20 in an obscure cryptocurrency two years ago, according to reports. His investment was 20 Bitcoins, which were worth almost nothing at the time, but are now worth nearly $500,000. As the value of his investment increased, he spent the money on things like vacations and luxury goods while waiting for the value to go up even more, before selling it all earlier this month.
Man Invests $20 in Obscure Cryptocurrency
How to Invest in Cryptocurrencies
Many people want to invest in cryptocurrencies but don’t know-how. This guide will show you exactly how to get started with as little hassle as possible. First of all, you need a good exchange; Coinbase is one of my favorites. After that, it’s just a matter of downloading their app and signing up for an account (which takes about 30 seconds).
Once you have a place to buy and sell cryptocurrency like bitcoin, litecoin, or Ethereum, it’s time to make your first purchase—it’s kind of like picking up that first slice of pizza when you come home from college! It might be intimidating if it’s your first time buying cryptocurrency, but don’t worry: I’m here to help. Here are some simple tips for making your first trade.
Before we start, there are two things you should do to prepare yourself for investing in cryptocurrencies.
1) Set up two-factor authentication on your exchanges and other important accounts — having 2FA enabled makes hacking much harder since passwords alone can’t give hackers access to any funds stored on these websites.
2) Move most of your coins into a cold storage wallet — if you plan on holding onto cryptocurrencies long term, moving them offline makes them much less vulnerable to hacking attacks. You’ll find more information about protecting yourself from hacks later in our series How Hackers Steal Your Money. Now that we’ve covered some basic stuff let’s move on…
Where to Buy
Stocks are an investment vehicle available to anyone with a brokerage account. However, stocks trade on exchanges such as Nasdaq and have high fees and minimums associated with them.
Instead of trading stocks, invest in cryptocurrencies. They’re more speculative than traditional equities, but they can also be more profitable if you pick them right. Stocks are available to everyone, but cryptocurrencies may not be around forever so it’s important to act quickly before they become too expensive or obsolete.
You don’t need a lot of money to invest in crypto – just $20 will do. These five cryptocurrencies cost less than 1/10th of 1% per coin: Dogecoin (DOGE), Reddcoin (RDD), BlackCoin (BLK), GridCoin (GRC), and Dashcoin (DSH). Each has its own strengths, weaknesses, and unique community – pick any two and your coins could double by tomorrow. So choose wisely!
What If It Goes Up?
In late 2010, while working as a software engineer, I bought 5,000 bitcoins for $5. The price immediately dropped to 1/10th of a cent per bitcoin—if I hadn’t had access to my bank account (via PayPal), I wouldn’t have been able to buy anything. A couple of months later, it went up to about 40 cents on eBay; I snagged about 75 more.
Then it shot up into four digits before getting pulled back down into single digits when MtGox imploded. These days I just keep an eye on #bitcoin-assets and remind myself that sometimes things go well and sometimes they don’t… but over time, so far at least, they tend to go up again.
If you don’t believe me, maybe someone else will: there is people who own millions of dollars worth of bitcoins but can no longer remember how they got them or even why.
I used to think that someday my wallet would be discovered by some enterprising young archaeologist with dreams of being a currency trader himself one day… now I just wait for some investment banker to notice and sweep away all doubt in a matter-of-fact Wall Street Journal op-ed declaring Bitcoin real.
Why Did He Choose This One?
Had he invested $1,000 in each, he’d have a much different story to tell. Instead, he chose a small number of obscure coins to gamble on—and one of them paid off by giving him more than 1,000 times his initial investment.
As it turns out, in late 2013 one of these anonymous cryptos gained traction and gradually started to increase its value—going from only a few cents per coin to over 40 cents within eight months (that’s an increase of about 4x). By March 2014 it was sitting at about 80 cents per coin.
On May 22nd it hit an all-time high of over 2 dollars per coin. That’s a better than 1000x return on his initial investment…in just six months. The day before he bought his first coins, it traded for less than a penny. Now that one is worth almost $4! So is crypto dead? Far from it! There are still plenty of ways to invest with plenty of upsides left if you choose wisely.
It’s unlikely that any single altcoin will gain 100x or even 1000x value again (though stranger things have happened) but that doesn’t mean there aren’t good opportunities elsewhere. Investing in undervalued cryptocurrencies today could make your next ‘big score’ tomorrow!
What If It Doesn’t Go Up?
It’s important to keep in mind that cryptocurrencies aren’t as easy to buy and sell as other investments. You can’t simply head over to your online broker and call up a bitcoin investment account. Instead, if you want to invest, you’ll need to open an account with an exchange like Coinbase, open a bitcoin wallet and fund it with fiat currency or cryptocurrency from another source (like another exchange).
And before buying any bitcoin, remember that prices fluctuate constantly—some days you might be down two percent, and some days you might be up to six. So it’s important not to make assumptions about what will happen if you decide to purchase crypto tokens or use them for transactions. As always, do plenty of research before deciding whether investing is right for you.
If you’re really set on investing in a particular cryptocurrency, here are three things to consider: how much money are you putting into it? Are there whales involved (people who hold massive amounts of a particular token)? What kinds of regulations exist around that token? Many cryptocurrencies have been subject to regulations by their local governments; these rules can change depending on where they are based.
Before making an investment, make sure you fully understand all potential risks involved. And if possible, stick with more widely known coins than fringe or emerging ones.
If your heart tells you one thing but logic says otherwise, go with logic – at least until things settle down again and go through regulatory approval processes which could lead to further clarity and regulation around some of these tokens/currencies/etc.
How to Start Your Cryptocurrency investment Click Here
Long story short, he quadrupled his money. While there are still big questions about blockchain technology and its viability for mainstream use, it’s clear that cryptocurrencies like bitcoin have staying power.
If you don’t want to be left behind, now might be a good time to invest $20 (or a bit more) in some newfangled digital cash. Who knows? Your returns could end up being better than Barrowman’s. It probably won’t—but stranger things have happened. Like they say: The truth is out there. And buried somewhere deep inside it is a cryptocurrency that’s poised to explode into mainstream consciousness at any moment.