Today I wanted to talk to you about Bitcoin and well all the other kinds of cryptocurrency out there.
Cryptocurrency is a digital currency, that works a lot like stocks than they do real money. You can collect it and spend it. Only unlike real money, the value of a cryptocurrency goes up and down just like stocks do.
The idea is to buy cryptocurrency when the value is low and hope that it goes up in value. So the $20 you spit on Bitcoin could be worth $40 later on. That’s pretty much how the stock market works. You buy “stocks” and the value of those stocks go up and down.
Cryptocurrency isn’t something you can hold in your hands like you can with a coin or a dollar bill. Cryptocurrency is all digital.
Years ago my uncle was teaching me about the stock market. I invested $100 and when I made my money back, I pulled out my original $100, and then everything I made from there on out, was “house money”. My uncle Frankie called this the slow and steady method. You put just a little in, so you don’t risk much, and eventually you’ll get that money back and more.
I decided to try this very same concept in the crypto market.
- First I had to set up a Coinbase account. This was fairly simple and only took a few minutes. This site is sort of like the Robinhood of cryptocurrency.
- Step 2. Buy BTC (Bitcoin). I purchase $100 worth of Bitcoin. The value of the bitcoin at the time I made my purchase was $31,622.38 per coin. This means that after fees, I owned 0.00306776 BTC.
- Step 3: Wait and watch. I waited and watched the market and when the value goes up and down. Eventually, it hit a huge spike, going up to $57,352.77. If you don’t want to actually watch the market yourself you can go to cryptocurrencyalerting.com, set up a free account, and have them text you when the price hits the number you specify. For example, I had them text me when the price of Bitcoin went higher than $45,000.
- Step 4: Sell. I sold all my BTC, and after fees, I was able to get back $175.94. Meaning after my initial $100 investment, I made an additional $64.95. Fees wise I was charged $2.99 to purchase the BTC meaning out of the $100 I spent I only actually got $97.01 worth of Bitcoin. When I sold I was charged $10.99.
|Purchased at||Purchased||Total Fees||BTC||Sell Value||Profit|
|$ 31,622.38||$ 97.01||$ 13.98||0.00306776||$ 57,352.77||$ 64.95|
Was I going to get rich doing this? No. But I made all my money back that I invested plus an additional $64.95. But that whole process took me a week.
I’m sure if I played with bigger numbers I would make way more, but it almost meant I was risking way more. The thing about the slow and steady method means less risk, but also much less chance at a bigger reward.
I only did this experiment to learn a little more about the cryptocurrency market. It really is a lot like the stock market. The values of the coin in question goes up and down just like stocks do.
You want to buy it when it’s low and sell it when it is high. Just like stocks, there are hundreds, probably thousands of different kinds of cryptocurrency but the most popular are …
- Ethereum (ETH)
- Bitcoin (BTC)
- Dogecoin (DOGE)
These are the three you hear the most about. The lost, Dogecoin is the one that you hear Elon Musk talking about all the time. It’s relevantly new on the market. When I bought Dogecoin it was trading at $0.08 per coin. Today the value is $.020 but it’s gone as high as $0.40. Bitcoin prices range usually from $31,000 to as high as $60,000 per coin. Ethereum trades right now for $2,6593.46 but I’ve seen it as high as $3,500 and as low as $1,500.
You don’t have to buy a whole “coin”. In fact, with an app like Coinbase, you can buy as little or as much as you want. I bought $100 worth of Bitcoin during my test. This means that I actually only had 0.00306776 of a BTC.
Like stocks, the prices of crypto go up and down. But unlike the stock market, the crypto market is open 24 hours a day. Right now ETH is up 9.07%. But the crypto market won’t close at 3:00 pm. So those prices will keep changing, every minute of every day.