Investment returns: what to expect in cryptocurrency

Cryptocurrency, a digital or virtual currency that uses safety cryptography and is decentralized, has gained significant attention in recent years. As the value of cryptocurrencies such as Bitcoin, Ethereum and others continue to increase, investors seek answers about what to expect from these assets. In this article, we will explore the possible investment yields of the cryptocurrency, including its short and long term growth prospects.

What is cryptocurrency?

Cryptocurrency is a digital or virtual currency that uses safety cryptography and is decentralized, which means that it is not controlled by any financial government or institution. Transactions are recorded in a major book called Blockchain, which allows safe, transparent and manipulation proof transactions.

Types of cryptocurrencies

There are many types of cryptocurrencies, each with their unique characteristics and cases. Some of the best known cryptocurrencies include:

• Bitcoin (BTC) : The first and largest cryptocurrency, launched in 2009.

• Ethereum (ETH) : A decentralized platform that allows developers to create intelligent contracts and decentralized applications (DAPPS).

• Litecoin (LTC) : A cryptocurrency of equal to peer that is similar to Bitcoin but with faster transaction speeds.

• Bitcoin Cash (Bch) : A fork of the original bitcoin block chain, launched in 2017.

Investment returns

Cryptocurrency investment yields can be significant, but come with risks and uncertainties. The value of cryptocurrencies can quickly fluctuate, which makes it essential to do your research before investing.

• Short -term returns: cryptocurrencies such as Bitcoin have experienced significant prices changes in recent years. A 10% increase in the value for a short period, for example, can result in a potential yield of $ 100.

• Long -term returns: historically, the cryptocurrency market has been more volatile than traditional assets such as actions or bonds. However, some investors have reported long -term yields of 1,000% to 5,000% or more.

Factors that affect investment yields

Several factors can affect investment yields in cryptocurrencies, which include:

* Mercado feeling : The general feeling of the market and the confidence of investors can influence the price of a cryptocurrency.

* Regulatory changes : Changes in government regulations or laws may affect the value of cryptocurrencies.

* Technical problems

: Technical problems with the block chain or underlying technology can cause significant price drops.

* Scalability and adoption : Limited scalability and high transaction rates can reduce the attractiveness of certain cryptocurrencies.

INVESTMENT STRATEGIES

While investing in cryptocurrencies involves inherent risks, there are several strategies that may consider:

• Average cost in dollars

  : Invest a fixed amount of money at regular intervals, regardless of market conditions.

• Position dimensioning : Assign a specific percentage of its portfolio to each cryptocurrency based on its tolerance and risk investment objectives.

• Coverage : Use financial instruments such as futures contracts or options to protect against price fluctuations.

Conclusion

Investing in cryptocurrencies can be an opportunity for high risk and high reward. While there are no guarantees of yields, experienced investors must address these assets with corporation and exhaustive research. By understanding the factors that affect investment yields, you can make informed decisions about your cryptocurrency portfolio.

Additional resources

* Cryptocurrency market data : Websites such as CoinmarketCap, Cryptocompare and Coindesk provide real -time market data on cryptocurrencies.

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