The investment world is changing before everyone’s eyes, as the young investor might choose investing routes such as cryptocurrencies or nonfungible tokens (NFT) instead of other investments such stocks or an IRA.
Throughout the last few years, technology slowly has taken control of the investment world, mostly through an online ledger called the block chain. The block chain is a record which shows when someone sent or received cryptocurrency or NFTs. The block chain is a security blanket for investors because all transactions are verified by the block chain which is controlled by computers.
Block chains allow secure payments which are reported to be more secure than debit or credit cards because personal information is not required for transaction. Investors almost never have to give out sensitive information to make a crypto payment, according to Coinbase.
Block chains are in a sense like a bank. When making a debit transaction the payment goes to the bank and out of the buyers account. Crypto goes from the block chain and out of the investors crypto account.
Cryptocurrencies have existed since 2009, but most recently they have been one of the most popular new ways for investors to make money. Bitcoin was the first cryptocurrency developed and the creator still is unknown to this day. Bitcoin also is the most expensive of the cryptocurrency — one bitcoin costs $38,864.82 as of press time Friday.
Although Bitcoin pricing is expensive, some investors prefer to go all in on a smaller coin which could result in more money in the long run. Tether is a smaller coin and is worth about a dollar as of press time Friday. If an investor purchases Tether they are investing in a chance for the coin to go up in price. If an investor were to purchase $1,000 worth of Tether, they would own 1,000 Tether coins. If the price of a Tether coin were to go up to $5 per coin, the investor could sell their 1,000 Tether coins for $5,000 and they would make a $4,000 profit. But just as fast coins can grow, they can drop price very quickly which makes crypto investments very risky because they are not tied to tangible assets.
In early 2011 Bitcoin was worth a dollar. If an investor purchased 1,000 bitcoin in 2011 and sold it today, the investor would have made $42,209,630.
Weatherford resident and local investor Pate Gossen has been involved in Roth IRA investments and cryptocurrencies.
“I started off watching YouTube videos. I don’t own any bitcoin. I did at one point in 2018, I sold it when it was worth $4,000 thinking the price would come down and after that in 2021 it went all the way up to $65,000,” Gossen said. There is no explanation for why bitcoin, Tether or any
There is no explanation for why bitcoin, Tether or any cryptocurrencies go up or down. Some reasons are due to how many high stakes investors bought into a certain coin. It is rumored the owner of Tesla, Inc., Elon Musk, owns more than 50,000 bitcoin. If Musk were to sell all of his bitcoin, the market likely would drop due to many bitcoin being available at the time. The more bitcoin available means it’s less rare and less expensive. The rarer something is, the higher the value increases. There currently are 18,925,137 bitcoin in existence and Bitcoin has a hard cap of 21 million coins. Bitcoin is predicted to hit its hard cap in 2040.
In July 2021, China owned two-thirds of Bitcoin, but the country banned all contributions to Bitcoin which led to a market drop from about $60,000 per coin to $30,000 per coin. Since, the market crash Bitcoin has slowly worked its way back up.
“In a Roth IRA you are investing in several companies which are put together by a financial advisor. A lot of cryptocurrencies aren’t safe. I feel like there could be a bi bubble bust like the .com era. A lot of companies which competed with Google and Amazon busted and people lost a lot of money,” Gossen said.
Coinbase has started a partnership with Visa which allows investors to use a debit card loaded with cash or cryptocurrency, in exchange investors receive up to 4 percent back in any cryptocurrency provided on the debit card.
“I actually have a Coinbase debit card and I get 4 perce back on any purchase I make. I can load up my card with any type of coin available go to Wal-Mart buy groceries and get cryptocurrency back which then can be exchange for money by selling it or to make money by letting the currency grow in price,” Gossen said.
Crypto.com also provides a Visa card which comes wit many interesting rewards.
“They partner with Visa just like Coinbase. Investors ge 3 percent back on any purchase plus 12 percent back Ata Pension Yojana (APY) on the amount the investor staked Twelve percent APY is unheard of. The interesting part i they also will reimburse investors through Netflix, Spotif and other applications,” Gossen said.
For investors to receive a crypto.com debit card, a high stake has to be made for more crypto rewards. If investor choose the card with zero stakes they get 1 percent back i crypto rewards. If a $400,000 stake is made investors get percent back in rewards.
A newer installment to the investment industry is a new wave of creative investing which can be installed into the block chain through NFTs.
As confusing as that sounds NFTs are art, videos or practically anything digital which can be invested in and sold through the block chain. NFTs are created into a token which authenticates the ownership of the NFT. NFTs and cryptocurrencies are similar in a sense which both are digital currencies which cannot be held in hand. NFTs are like a certificate of authentication and ownership. They are used to purchase a huge range of virtual collectibles like trading cards, music and video clips. NFTs can be set up so the original artist continues t earn a percentage of all subsequent sales through the bloc chain.
Purchasing an NFT is a very risky business, but also ca be very rewarding especially for the creator of the NFT. In February, 2021 a 10-second video by an artist named Beeple sold online for $6.6 million. Beeple also sold the fourth most expensive art piece in the world through the block chain which totaled to $69,346,250.
The benefits for artists and creators of NFTs mainly are the ownership of their own full copyright. In most licensing agreements this is very uncommon.
For NFT investors it allows them to financially support artists they are interested in.
Another interesting NFT fact is the definition of NFT itself is owned by an investor known as AOI, according t www.merriam-webster.com
Some NFTs can be purchased through a cryptocurrency known as Ethereum which originated in 2015. Ethereum currently is worth $3,218.75 per coin as of press time Friday.
Many investors purchase NFTs for bragging rights and some purchase them to re-sell them.
Cryptocurrencies and NFTs no doubt are money makin investments and are the investments of the future.