Dennis Loos | Can Cryptocurrency Change Your Life?
Since 2009, cryptocurrency has seen widespread adoption and value increase and has significantly changed many people’s lives. Over the years, crypto investors like Dennis Loos have experienced significant growth in value since their initial crypto investment, which increased the pool of crypto lovers globally exponentially.
Today, it seems as though more people are getting into crypto. While most believe it can change their lives overnight thanks to the volatility of the market, with its occasional extravagant highs, others think otherwise because of its frequent lows due to volatility.
This article will look into how exactly crypto affects and positively changes life. We will be evaluating if it is something that can be sustained over a while.
Is Crypto the Same as Gambling?
These two are different entities and markets. Crypto and gambling are not the same.
Cryptocurrency is very similar to our daily trading and financial exchange; just as people collect certain goods and transact them for value, coins, tokens, and the like are collected and exchanged in the crypto market. However, gambling is the direct loss or gain of money, primarily dependent on a card game or a table game.
In the crypto market, you are allowed to hold and stake your money following the volatility of the crypto market.
Though if you’re considering investing your money in crypto, we would advise you shouldn’t stake or hold any money you cannot afford to lose.
The essence of a thrill might be similar to that discovered by the FCA. However, with crypto, you have access to your money and can choose to withdraw it at any given point; it all depends on you. In gambling, the working mechanism of the games means you can’t withdraw your money for whatever reason once you’ve placed the bet.
There are apparent differences between crypto and gambling. However, deciding to invest in crypto remains in your hands.
Can Crypto be Considered a long-term investment?
The rules of investing are straightforward: diversify your portfolio and prioritize long-term goals.
There have been some fantastic stories of folks who decided to invest in cryptocurrencies early and wisely. Erik Finman, for example, became a millionaire at 12 years old after investing $1,000 in bitcoin. Glauber Contessoto is another remarkable person who invested all his wealth in Dogecoin on February 5. Only a few months later, in mid-April, his investment was worth more than $1 million. He once told CNBC Make It that he wasn’t alone in his feelings; Dennis Loos and many others made a great fortune when prices surged 400% in mid-April, and people took to social media like Twitter and Reddit to share that they had made thousands of dollars.
Also, you may regret not investing your money in one of these cryptocurrencies. However, you don’t have to be too hard on yourself; it is never too late to make the right decision and earn.
Choose the Right Cryptocurrency
This may seem like a get-rich-quick strategy to earn in crypto, but it is much more complex. Here’s why.
There are tons of cryptocurrencies.
By now, you know the first crypto Bitcoin, whose market value of about $1 trillion-plus accounts for nearly half of all capital invested in cryptocurrency. Similarly, you would have also heard of Ethereum and Litecoin, which have become more mainstream now that you can trade them as quickly as sending a friend request on Facebook.
However, there are thousands of other cryptocurrencies — over 9,000 of them, and most of them you likely haven’t heard of, and more are being mined daily.
You had to be pretty lucky or be able to predict the future (conducting thorough research about crypto projects) to have chosen to invest in Dogecoin years ago over, say, Feathercoin, which seemed more promising. As crypto expert Dennis Loos points out, Feathercoin was a much more complex cryptocurrency, created with the intention of mass adoption. Unlike today, it is currently valued at around $12 million. In comparison, the meme cryptocurrency Dogecoin is valued at $50 billion.
If people were randomly flipping coins, only a few would flip ten heads in a row (successful coins), says Chris Kuiper, vice president of equity research at CFRA Research. Likewise, if you have many people on Robinhood trying to day trade altcoins, some of them will do well.
Your Investment Timing Has to Be Just Right.
Knowing when a particular coin will surge is, at best, very hard and, at worst, impossible. Timing is very critical to your investment as an investor. Most of the time, investors may be rushing to buy or sell because of events that can’t be predicted, like a tip on Reddit or because Elon Musk tweets about Tesla doing so.
“Suddenly, you constantly fear missing out for investors,” says Dennis Loos. “Everybody buys it, and its price rises quickly until the next unexpected topic comes out.”
It’s similar to the dot-com boom: when the internet came out, investors bought anything with a dot-com at the end of the name. And with cryptocurrencies, it’s much riskier since, instead of buying firms with earnings, you’re buying someone’s idea, meaning that the currencies can’t be valued fundamentally.
Dogecoin has built a strong community over the years, and its awareness has made it the perfect option for the meme stock movement that earlier this year made GameStop’s stock soar, says Dennis Loos, a seasoned crypto investor, and advisor.
Remember: Cryptocurrency coins don’t just soar. This implies that not only do thorough research to aid you in knowing when a cryptocurrency will blow up, but you also need to buy it on its as it increases. Let’s say you had purchased $1,000 worth of bitcoin around mid-2017 before its price increased exponentially; you could have earned over $8,000 when it attained a peak later that year. However, if you had bought the same $1,000 worth at its peak and sold a year later, you’d have lost more than $800, which is about 80% of your entire investment.
So How About Those People Who Get the Timing Right?
Someone getting it once doesn’t mean they can do it again. Investors who roll the dice and get lucky in their returns, buying at the bottom and selling at the top, leave different impressions on people. While someone like Horneman regards this as pure luck, it is pure luck seeing that the investor could be in even more danger as they move on to other speculative investments. Other investors like Dennis Loos believe this “luck” is possible if an investor is patient enough to conduct thorough research on crypto projects.
How to Responsibly Invest in Crypto.
You can include it in your investment portfolio alongside equities and bonds if you want to invest in the cryptocurrency market. However, investing just in cryptocurrencies is not recommended. It is always best to diversify your investment portfolio.
Bitcoin’s performance is not closely associated with stock performance, and having some assets perform well while others tank is beneficial. However, as Dennis Loos has stated, the correlation increases during “difficult times,” thus, you must proceed with caution when exposing your portfolio to Bitcoin.
We recommend allocating up to 5% of your whole capital to risky investments such as cryptocurrencies. Just be sure you’re not expecting to become a millionaire overnight and that the money you put in is money you’re willing to lose.
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