Bitcoin Rejoining: How to Get Back on Track and Start Making Money

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It’s been two years since Bitcoin reigned as the dominant cryptocurrency, with its meteoric rise from $200 to more than $20,000 in value. That’s a lot of money for a little piece of digital cash—and it’s made Bitcoin one of the most valuable cryptocurrencies in existence. But as the rest of the market has matured, so has its parent organization: Bitcoin is no longer the only decentralized digital currency available. As a result, it’s worth exploring whether it could be used for illicit activities again. Cryptocurrencies like Bitcoin have their uses, and crypto-fund managers that invest in these currencies understand that they have staying power. But some countries are starting to recognize this—and some of those same regulators are looking toward centralized digital currencies such as bitcoin and another type of cryptocurrency called ether (Ethereum) as potential channels for contraband money to flow across international borders. Bitcoin Rejoin: How to Get Back on Track and Start Making Money

What is Bitcoin Rejoining?
The term “re-joining” describes the process by which blockchain startups and firms integrate with a company’s existing business model. In the past, most companies would integrate their blockchain efforts into the company’s existing infrastructure. But as more blockchain firms establish themselves, they’re also looking to re-join the fabric of various industries. For example, a blockchain firm could partner with a financial services firm to offer regulation-free access to a new class of financial products. Or, a blockchain firm could partner with a media firm to offer transparent, immutable, and immutable data to newspapers and other media outlets.

What is the Federal Reserve System?
The Federal Reserve System is a unique governmental organization that maintains control over the nation’s monetary system. The central bank of the United States prints money and regulates the amount that banks are allowed to publish between each other in their daily exchange rates. The Federal Reserve is also responsible for keeping about one-third of the world’s gold supply on hand as a store of value. It does this by purchasing coins from the government and turning them into bars. The physical gold bars are stored at the Federal Reserve Bank in Philadelphia.

How Bitcoin and Other Cryptocurrencies Work
The first thing to know about cryptocurrencies is that they’re not banks. A cryptocurrency is a form of digital cash. That means it can be used to make online purchases, store value, and (if you’re really tech-savvy) send money without a third party holding your funds. But unlike banks, which are regulated and require licenses to operate, cryptocurrencies aren’t regulated by any government body. That means if you choose to use a cryptocurrency in violation of the law, you can still face serious consequences. On the other hand, banks are expected to follow certain regulations to make sure the money you loan them stays safe. That means you have to keep track of your cryptocurrency investments, including keeping a digital wallet for each exchange. That wallet could easily hold several different cryptocurrencies, including one that you choose to break out and sell to finance your lifestyle.

Why Investing in Cryptocurrencies Is a Bad Idea
Investors need to be aware that investing in cryptocurrencies is a high-risk strategy. A favorable market climate and increased regulatory scrutiny could easily cause cryptocurrencies to lose a majority of their value. In addition, many of the profits you could make from investing in cryptocurrencies are sent overseas through a complicated process called “off-setting.” That means those profits are first deposited in an account controlled by a private foundation and later distributed among investors in that foundation’s portfolio. If a profit is large enough, the foundation will pay out some of the money to the investors in the form of a grant. That’s a far cry from the kind of returns investors should expect from a financial investment in cryptocurrencies. If anything, investing in cryptocurrencies is a very high-risk, low-reward strategy.

Bottom Line
Ultimately, investing in cryptocurrencies is a high-risk strategy that’s likely to bring very little investment reward. If the price of Bitcoin and other cryptocurrencies falls, someone will definitely buy them at a lower price and then sell at a higher price, profiting from the sale. That’s not a good investment strategy, and it’s something that investment firms that invest in cryptocurrencies should be aware of. Because of this, it’s a good idea to closely examine any investment fund that’s investing in cryptocurrencies. As a final thought, if you’re interested in investing in cryptocurrencies but aren’t quite ready to buy in on the buy-and-sell-and-dump cycle, you could always try investing in shares of established blockchain startups. You never know when a new cryptocurrency will emerge as the next big thing, and entering the fray early can give you a head start in the investment race. That way, if the market turns against cryptocurrencies, you still have some financial security in the form of shares of a growth company.

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