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Cryptocurrency Newcomers Cope With Wild Swings

"We are not it in it to become bitcoin millionaires,"

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A Bitcoin logo is shown at a Bitcoin trading store, Dec. 21, 2017. VOA

After researching digital currencies for work last year, personal finance writer J.R.

Duren hopped on his own crypto-rollercoaster.

Duren bought $5 worth of litecoin in November, and eventually purchased $400 more, mostly with his credit card. In just a few months, he experienced a rally, a crash, and a recovery, with the adrenaline highs and lows that come along.

“At first, I was freaking out,” Duren said about watching his portfolio plunge 40 percent at one point. “The precipitous drop came as a shock.”

The 39-year-old Floridian is part of the new class of crypto-investors who do not necessarily think bitcoin will replace the U.S. dollar, or that blockchain will revolutionize modern finance or that dentists should have their own currency.

ALSO READ: Here is guide to start your own cryptocurrency

Cryptocurrency
Dubbed by longtime crypto-investors as “the noobs” — online lingo for “newbies” — they are ordinary investors hopping onto the latest trend, often with little understanding of how cryptocurrency work or why they exist. Pexels

“There has been a big shift in the type of investors we have seen in crypto over the past year,” said Angela Walch, a fellow at the UCL Centre for Blockchain Technologies. “It’s shifted from a small group of techies to average Joes. I overhear conversations about cryptocurrencies everywhere, in coffee shops and airports.”

Walch and other experts cited parallels to the late-1990s, when retail investors jumped into stocks like Pets.com, a short-lived online seller of pet supplies, only to watch their wealth evaporate when the dot-com bubble burst.

Bitcoin is the best-known virtual currency but there are now more than 1,500 to choose from, according to market data website CoinMarketCap, ranging from popular coins like ether and ripple to obscure coins like dentacoin, the one intended for dentists.

Exactly how many “noobs” bought into the craze last year is unclear because each transaction is pseudonymous, meaning it is linked to a unique digital address, and few exchanges collect or share detailed information about their users.

A variety of consumer-friendly websites have made investing much easier, and online forums are now filled with posts from ordinary retail investors who were rarely spotted on the cryptocurrency pages of social news hub Reddit before.

Cryptocurrency
Reuters interviewed eight people who recently made their first foray into digital currency investing. Many were motivated by a fear of missing out on profits during what seemed like a never-ending rally last year. Pexels

ALSO READ: Is investing in Bitcoin safe? Get the basics first!

One bitcoin was worth almost $20,000 in December, up around 1,900 percent from the start of 2017. As of Friday afternoon, it was worth about $10,000 after having fallen as much as 70 percent from its peak. Other coins made even bigger gains and experienced equally dizzying drops over that time frame.

“There was that two-month period last year where all the virtual currencies kept going and up and I had a couple of friends that had invested and they had made five-figure returns,” said Michael Brown, a research analyst in New Jersey, who said he bought around $1,000 worth of ether in December.

“I got swept by the media frenzy,” he said. “You never hear stories of people losing money.”

In the weeks after Brown invested, his holdings soared as much as 75 percent and tumbled as much as 59 percent.

Buy and ‘Hodl’

Investors who got into bitcoin before its 2013 crash like to refer to themselves as “OGs,” short for “original gangsters.”

They tend to shrug off the recent downturn, arguing that cryptocurrencies will be worth much more in the future.

“As crashes go, this is one of the biggest,” said Xavier Levenfiche, who first invested in cryptocurrencies in 2011.

“But, in the grand scheme of things, it’s a hiccup on the road to greatness.”

Spooked by the sudden fall but not willing to book a loss, many investors are embracing a mantra known as “HODL.” The term stems from a misspelled post on an online forum during the cryptocurrency crash in 2013, when a user wrote he was “hodling” his bitcoin, instead of “holding.”

Mike Gnitecki, for instance, bought one bitcoin at around $18,000 in December and was sitting on a 43 percent decline as of Friday, waiting for a recovery.

“I view it as having been a fun side investment similar to a gamble,” said Gnitecki, a paramedic from Texas. “Clearly I lost some money on this particular gamble.”

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Some retail investors who went big into cryptocurrencies for the first time during the rally last year remain positive. Pexels

ALSO READ: Status of Bitcoin in India

Duren, the personal finance writer, is also holding onto his litecoin for now, though he regrets having spent $33 on credit card and exchange fees for a $405 investment.

Didi Taihuttu announced in October that he and his family had sold everything they owned — including their business, home, cars, and toys — to move to a “digital nomad” camp in Thailand.

In an interview, Taihuttu said he has no regrets. The crypto-day-trader’s portfolio is in the black, and he predicts one bitcoin will be worth between $30,000 and $50,000 by year-end.

His backup plan is to write a book and perhaps make a movie about his family’s experience.

“We are not it in it to become bitcoin millionaires,” Taihuttu said. (VOA)

Next Story

The Best Litecoin Wallet this Year

As you can see an array of best Litecoin wallets in 2019 available for storing Litecoin which is a cryptocurrency that facilitates an instant transfer of funds

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Litecoins, cryptocurrencies
Cryptocurrency, Litecoin. Flickr

Cryptocurrencies are gaining robust popularity amongst the masses due to its decentralised approach. Since cryptocurrencies eliminate the intervention of institutions and Governments in its transactions, it is more transparent in its operations. People might be well aware of the popular crypto Bitcoin, but there are many other better performing coins like Litecoin, Bitcoin Cash, Ethereum and Ripple. If you intend to buy litecoin, then you should have a crypto wallet which can store the litecoins for you. A crypto wallet acts like a regular wallet to keep the money safe, but it does not actually hold any physical form of cryptos. 

Find below some of the Litecoin wallets to secure your LTC:

Ledger Nano S: It is a hardware wallet which can be easily plugged into your system like a USB device. Ledger nano s is considered safer than online wallets as they can be physically carried and plugged off the device thereby providing less space for any fraudulent activities. Ledger nano is equipped with private keys for better security and is the best choice if you have LTC in large numbers.

Litecoins, cryptocurrencies
As technology advances, you can see many more wallets pitching in with its own innovative ideas to store and safeguard cryptocurrencies. Flickr

Trezor wallets: Trezor was a child from the Satoshilabs and is the first hardware wallet meant for providing more security to the coins. Trezor renders its support to many coins like Dash, ZCash, Litecoin and Dogecoin. It provides a 9-digit pin code to store your Litecoins even offline. Trezor is one of the lightest and portable Litecoin wallets.

Also read: Microsoft Adds Digital Health; Feature On its Beta Android Launcher

Exodus: Exodus is a popular desktop wallet which provides space for storing many cryptocurrencies including Bitcoin, Litecoin, ZCash and Ripple. Exodus has an inbuilt connection with famous cryptocurrency exchange Shapeshift allowing easing access to LTC to BTC converter and BTC to LTC exchange.  Exodus is a multi-currency wallet and hence is a favourite for many crypto enthusiasts.

Jaxx: Jaxx wallet supports desktop and mobile applications. Jaxx provides a user-friendly experience for all the 13 cryptocurrencies it supports. One amongst them is Litecoin. Jaxx wallet can be used in IOS, Android, Windows and Linux devices. It has a tie-up with Shapeshift which is a leading crypto exchange thus allowing you to buy Bitcoin anonymously with credit card. 

Cryptocurrencies
A crypto wallet acts like a regular wallet to keep the money safe, but it does not actually hold any physical form of cryptos. Flickr

Electrum LTC: To get away with the slow speed of heavy Litecoin core wallets, you can shift to a lite wallet like Electrum LTC to store Litecoins. Electrum is a desktop wallet which works without downloading the entire Litecoin blockchain.  Electrum LYTC wallet is protected by a 12 digit seed key and is available for different types of desktops like MAC, Windows and Linux.

Conclusion

As you can see an array of best Litecoin wallets in 2019 available for storing Litecoin which is a cryptocurrency that facilitates an instant transfer of funds from one end to the other through a peer-to-peer network. Look at the pros and cons of different crypto wallets before choosing the one which suits your needs. As technology advances, you can see many more wallets pitching in with its own innovative ideas to store and safeguard cryptocurrencies.