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Lesson 7: Cryptocurrency investing

Now that you have learned the basics, it’s time to look at the exciting part – cryptocurrency investing.

This is the exciting part!

You’ve probably already heard the stories about how early Bitcoin and Ethereum investors basically became overnight millionaires. The chart below shows how exactly something like that can happen.

In a one-year time span from December 2016 to December 2017, the price of BTC went from $750 to more than $10,000! This means that anybody who invested $10,000 in December 2016, would have made $133,333 in exactly 365 days. In fact, the total market cap of cryptocurrencies went all the way up to an astounding $500 billion by the end of 2017.

Stories like that flooded the internet and more and more people joined the crypto hype to get a slice of that crypto pie.

However, as more and more speculators flooded the market, the inevitable happened.

The market took a huge dip.

With bitcoin taking a dip, all the other cryptocurrencies took a dip, and the stories changed from people making overnight millions to people losing overnight millions. The Fear of Missing Out (FOMO) quickly turned into Fear, Uncertainty, and Doubt (FUD). 

But, like we mentioned in lesson one, the cryptocurrency sector is a new and emerging industry (after all, Bitcoin is only 10 years old). As the market grows and matures it will stabilize. But before that, there is likely some more volatility in store. 

Eli Boufis, the private equity writer at Forbes, illustrates it perfectly:

One cryptocurrency security expert told me, “More than money, crypto is an industry. Imagine you invested in email in 1993 [before browsers provided the platform for mass adoption]; cryptocurrency might be the way to do that today.”

It’s a tantalizing thought for investors.

The cryptocurrency industry, say experts, hasn’t arrived at its “browser moment” yet. To go mainstream, they say, you would expect people to use a blockchain without knowing they’re using a blockchain—a kind of backdoor “Intel Inside” strategy. The application built on top of it would be simple to use. 

If you knew what you know today, wouldn’t you invest in Apple, Amazon, Google, and Netflix when they were just getting started? (We know your answer.)

It’s not too late to invest in cryptocurrencies and Abra makes it even easier for you.

Here’s how:
 

Invest in fractional amounts of cryptocurrencies

Most people have various questions when they are trying to understand the ability for fractional bitcoin investing: 

  • Can I buy a small fraction of bitcoin?
  • Do I need to buy the whole bitcoin?
  • Can I buy half of a bitcoin?

The short answer is yes.

One bitcoin can be divided into smaller fractions. One fraction of a bitcoin is known as a Satoshi.

The name of the fraction, a Satoshi, is derived from the creator of Bitcoin, Satoshi Nakamoto.

Here is a representation of a bitcoin in Satoshis:

  • 1 Satoshi = 0.00000001 ฿
  • 10 Satoshi = 0.0000001 ฿
  • 100 Satoshi = 0.000001 ฿
  • 1,000 Satoshi = 0.00001 ฿
  • 10,000 Satoshi = 0.0001 ฿
  • 100,000 Satoshi = 0.001 ฿
  • 1,000,000 Satoshi = 0.01 ฿
  • 10,000,000 Satoshi = 0.1 ฿
  • 100,000,000 Satoshi = 1 ฿

This means that a bitcoin can be divided into 100,000,000 fractions.

You can buy one Satoshi, 1,000 Satoshis, 1,000,000 Satoshis — as many as you want. Buying an entire bitcoin can be expensive, so it’s useful to know that you can buy fractions of bitcoin, and other cryptocurrencies as well...and unlike the stock market, the cryptocurrency market never closes.

 

Happy investing,

Team Abra
 


Upcoming Lesson: [Lesson 8] How to create your first crypto wallet and buy bitcoin

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