Trading, Investing, and Mining Cryptocurrencies in 2018? Read First!

What to Do with Bitcoin/Crypto 2018 and Beyond Speculations

There is a fundamental difference between investing n bitcoin and trading the bitcoin. Over the last couple of years, there’s been developed many different ways how to utilize and profit from the Cryptocurrencies such as Bitcoin, Ethereum, Litecoin, Bitcoin Cash, Bitcoin Gold, and over 1200 of others.

The number of various Cryptocurrencies is fluctuating because new ones are being introduced every month and the number of weak or fake cryptocurrencies are disappearing every month.

Therefore it is strongly advised to not blindly buy any Cryptos that didn’t pass the test-proof period, and just because it looks like it’s the greatest deal of the century it doesn’t mean that it actually gonna happen in the future.

If you look into the past at the facts what happened with Bitcoin, it’s very obvious that it’s unpredictable and no one can with 100% clarity tell what exactly will happen. It’s all just speculations, and speculators are those who tell you what and when to buy, sell, or invest.

If we could predict such a thing, then everybody would buy Bitcoin when it traded around $100 per Bitcoin which around the end of December 2017 and beginning of 2018 in January would result in 200 times its value, meaning that from each $100 you’d end up with around $16 000. Mind-boggling right?

This way anyone with a small capital could invest in Bitcoin and become a millionaire 3 – 5 years after. But how many actually did?

Investing

When it comes to investing in Bitcoin or another cryptocurrency, it’s nothing too complicated. You buy when it’s cheap, and sell when the value is at the peak.

Here is the thing. You don’t invest the amounts that you can’t lose, because if so, you will do some stupid mistake like getting out of the market early or in the worst time like many people who attempt investing do.

If you are in the market, meaning that you hold onto the Bitcoin or stocks, you didn’t lose anything because you are still in the game. But when you sell out of scarcity caused by public media and uneducated people, it’s bad.

Remember what Warren Buffet said when they asked him what is his secret to successful investing, “I buy when everyone’s selling, and I sell when everyone’s buying.”

That’s it, secret mystery solved.

Well now might be not the best time to buy Bitcoins, though, but I am not an adviser or anything like that all my suggestions are just opinions and shouldn’t be taken seriously.

Trading

But trading is something different and it requires certain tools and strong nerves. What happened with the Cryptocurrencies is that it’s not really an investment anymore when you buy today, but rather trading. You can buy the Crypto today that seems like a super deal, and next month could be all gone.

So, carefully evaluate before you buy, and most importantly never trade with money that you cannot lose, and never trust anyone who is talking about 100% sure deal. Even the best Crypto experts did not predict what happened at the end of 2017 with Bitcoin, they speculated. At the beginning of 2017, I remember hearing from experts that Bitcoin could go up to $5000 per 1 Bitcoin, which in reality did almost 4 x that, and by the time of writing this article the current Bitcoin value is around $8650.

Cryptocurrency Mining

Mining is a very popular way of obtaining Cryptocurrencies, but with the time the mining is getting more difficult and requires more expensive hardware often called the Mining Rig, which is the computer with strong and high capacity processors (GPU, NVIDIA), that solves the difficult equations.

The mined cryptocurrencies are then being stored on those machines, servers, either online or offline. Crypto Mining could get quite expensive since the mining rig consumes a substantial amount of electricity in order to run it, and it has to be on 24/7.

But there is one big opportunity thanks to Crypto-mining, which is actually more like an investment. With more and more people and companies getting involved with Crypto-mining, the more processors (GPUs, NVIDIA, AMD) have to be made.

If we invested a couple of years ago and bought stock shares of NVIDIA, we could see very nice returns. It’s hard to say how fast it’s going to go from now, but it’s very likely that it’s not going to fall anytime soon, so there is still a plenty of money to be made.

Some investors recommend to buy NVIDIA stocks and others AMD, so the final decision is up to each individual.

This is an interesting article on this topic:

We then get another helpful hint, in the form of a chart (again taken from Stansberry) that shows the relative performance of the “master key” and the various big-name cryptocurrencies like bitcoin and ethereum, and the master key beat them all handily… from early February 2016 through early March of 2017.

That’s true, and it proves that we’re right about which stock he’s teasing, because we get that exact price chart match… but it is, of course, also highly misleading now that the crypto bubble has progressed for another nine months and changed the nature of that market entirely… over the past nine months, I expect that no stocks have come close to matching the performance of bitcoin.

So what’s the stock? Thinkolator confirms that this is, of course, NVIDIA (NVDA), by far the most-cited blockchain superstar stock among mainstream investors… though also one that probably won’t get much direct growth from blockchain mania in the years to come, as new blockchain-focused chipsets and competition enter the mining market.

NVIDIA did get a nice boost from the ethereum miners this year, as miners increasingly turned to using graphic processing chips (GPU’s, often as part of high end “graphics cards” aimed primarily at gaming PCs) and both AMD and NVDA, who between them essentially own the high-end GPU market, enjoyed a surprise sales jolt.

Many folks think that is coming to an end now, including Mizuho’s analyst who opined last month that cryptos will be much less meaningful for AMD and NVDA in 2018 — NVDA had a decline in sales to the miners last quarter, though that number is very volatile and clearly the stock is getting lots of attention because of cryptocurrencies.

We should check the context, though — even if you think GPU demand from miners will fall off a cliff, it’s still not a huge part of NVDA’s business. If you annualize the results of the past two quarters (that’s a fancy way for saying “double the half-year numbers to guess at a full year number”), sales of chips for cryptocurrency mining would make up about 5% of NVIDIA’s revenue.

That’s partly why NVDA is doing so well — it’s largely a win-win situation as their products surf a bunch of hot tech trends. If crypto-mania continues and lots of new coins come out, with more demand for GPUs to mine them, then they get a boost… if not, then a smallish part of their revenue dries up, and other major areas of the business are growing fast — both their traditional gaming business, which continues to be the primary driver, and the chips for next-generation data centers and artificial intelligence processing that are flying off the shelves and being used by most application developers in AI, to say nothing of the chips that power decisionmaking in self-driving cars.

That’s the strength for NVDA, and the reason it has seen such an exceptional stock price performance — it’s got good underlying growth (explosive growth, even), but, equally importantly, it’s got a meaningful presence in so many “hot” sectors and trends that investors always have room for optimism… data centers, artificial intelligence, self-driving cars, virtual reality, competitive video gaming, and, yes, cryptocurrencies. And I may be forgetting something.

That introduces some risk, as well — NVDA was a sleepy little chip stock for decades, milking the gaming business and trying to get built into laptops and desktops while lower-end GPUs were being commoditized, and investors didn’t start paying much attention until higher-end GPUs got to be popular as they fueled popular and super-demanding PC video games a couple years ago, and then self-driving cars as their chips were built into Tesla’s “autopilot” systems… and then the stories kept building from there because the analysts were too skeptical of that breakthrough growth and had to play catch-up as NVDA kept clobbering their estimates over the past couple years, becoming by far the best stock in the S&P 500 over the past three years (it’s up 900% in that time).

I’ve dabbled in NVDA shares a few times during this run, and ended up putting on an equity position by exercising some of my call options early this year, so it has grown to be a meaningful part of my portfolio… but not an investment that I would consider to be either an income generator or a “earn a few cents for each cryptocurrency transaction” investment.

I suppose you can make the case that’s true in some conceptual way — if miners in the future continue to find that GPUs are the best chips for mining, and mining is essentially the act of verifying transactions as part of the global network and being paid in the cryptocurrency for doing that verification, and miners use the money they make to buy more GPU chips, then I guess you can say they get a share of every bitcoin made in an extremely indirect way… kind of like the way a company who sells vegetable oil is indirectly getting a small share of every french fry McDonald’s sells.

I don’t know what the future holds, I’m afraid — the rapid rise of cryptocurrencies has turned “mining” into an industrial enterprise, with people developing and customizing chips and data centers specifically for mining particular blockchain “tokens”, and there has now been so much money thrown into the sector that it’s hard to see any rational economic decisions being made by any of the actors in the near future.

Source and full article: https://www.stockgumshoe.com/reviews/blue-chip-growth/whats-navelliers-crytpocurrency-master-key-is-it-the-holy-grail-of-cryptocurrency-investing/

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