Cryptocurrency; bitcoin, dogecoin and stocks: make money?

Cryptocurrency

Cryptocurrency; bitcoin, dogecoin and stocks: how to make money from home?  

By Junaid Valli, Halal Incorp

Bitcoin (BTC) is a form of cryptocurrency; also referred to as a digital currency. Bitcoin originally created by the notorious Satoshi Nakamoto in 2008; real identity is currently unknown. Cryptocurrency is a form of payment that can be exchanged online for goods and services; companies that accept crypto as a form of payment are currently scarce, however Elon Musk; CEO of Tesla inc has announced plans to accept bitcoin as a form of payment for the products. According to CoinLore there are more than 5,000 types of cryptocurrency in circulation. Supporters of cryptocurrency see the currency as the future of global finance, thus racing to buy them now before it becomes more expensive. Currency speculators, who are often involved in short term investment, see cryptocurrency as a quick way to make a profit.

Dogecoin

For those unfamiliar with Dogecoin, this form of cryptocurrency was originally created as a meme, however in the past year it has become a relatively popular investment with speculation that the currency will rise to $1 per Dogecoin by the end of the year. This cryptocurrency is viewed as a higher risk than most investments.  For those looking at high-risk, high reward investments you may want to consider buying shares in Roku, the value of this stock is backed by more than speculation with regulation in place to ensure transparency. Currently Dogecoin can only be purchased via a handful of cypto focused ‘brokers’ although as demand increases Dogecoin may soon be traded on more trading platforms.

Why is cryptocurrency viewed negatively?

Cryptocurrency especially in its earliest form was often viewed negatively, this was due to its association with illegal activities, the nature of cryptocurrency allows for transactions to be relatively secure, tracing the origan of crypto currency is relatively difficult/ near impossible. This has caused global concerns with many governments calling for cryptocurrency being regulated.  

How to get involved with cryptocurrency?

Currently there are two methods of getting involved with cryptocurrency.

  1. Mining
  2. Purchasing cryptocurrency

N.B Both methods require some form of digital wallet to securely store the currency.

Mining requires a high level of technical ability; if you have no coding ability or are uncomfortable mining crypto then purchasing crypto is the best option. This article will focus on how to buy crypto currencies such as ethereum, bitcoin and dogecoin rather than the mining aspect of it. Purchasing cryptocurrency can be relatively simple, however like most investments it comes at high risk, often with high reward.

If you are interested in investing in cryptocurrency there are many apps and sites which would allow you to do so. The most common apps such as binance, revolut (which also operates as a virtual bank) and Coinbase all operate within the law and will ask for users to verify the identity, allowing transactions to be tracked. These common apps not only operate as a marketplace to buy and sell, but they also act as cyrpto-walletts which is a necessity when dealing with cryptocurrency.

The current prices of major cryptocurrencies:

As of the 25th  February the current price of bitcoin, ethereum, XRP, Litecoin and dogecoin are:

1 bitcoin (BTC) = $50,451.26

1 ethereum (ETH) = $1,616.51

1 XRP (XRP) = $0.4736

1 Dogecoin (DOGE) = $0.05414

Note: bitcoin in 2011 had a starting price of $0.30 per bitcoin

For The Latest Rates See Source: CoinMarketcap.com

How the blockchain is changing money and business | Don Tapscott

Investing in stocks

The stock market often represents the global financial market; allowing individuals to buy and sell shares in a company. The stock market in comparison to cryptocurrency is often well regulated; the government regulates actions of brokers to ensure fairness. Regulations often cover anti-fraud monitoring, strict sale of securities rulings and ethical practice rulings.  However, like cryptocurrency stocks and shares are often high risk with high reward.

How to invest in stocks?

The cheapest way to invest is through a platform, majority of platforms may charge a small fee for any investments made through their app or website, this fee may include a service fee. Platforms vary in the price they charge but they may also vary in the stocks that they offer, for example the online banking app revolut as of January 2021 only have 800 stocks listed meanwhile the popular app trading 212 have over 10,000 stocks and EFTs. Popular platforms include: Trading 212, Freetrade and Etoro.

Investment funds

Investment funds is where investors pool their money together to invest in multiple shares, money is collected by a broker or a specialist who will pool investments together and buy shares in different companies.

Investment ISAs

in the UK individuals over the age of 18 has a £20,000 ISA allowance, essentially this means you do not need to pay tax on any market gains, ISAs may be provided by your bank or specialist platforms such as bricklane, AJ bell and Nutmeg. Please note ISAs may require a minimum investment, in addition when looking at different ISA platforms it is best to research which platform suits your individuals needs.

Popular stocks at the time of writing include:

Tesla, trading at $703.92.

Amazon, trading at $3,094.72.

GameStop, trading at $170.65.

Viacom, trading at $63.08.

N.B financial advisors are advising to take extra caution if you are planning to invest in GameStop.

Traditional investments

You may have heard the saying that physical commodities such as gold or silver are relatively safer investments than shares and cryptocurrency. Gold is often seen as a long-term investment rather than a short term one, if you are looking to make money fast Gold and Silver are not the best option, shares are not the best option of making money quick although you can see quicker returns with some stocks. History shows that Gold prices are often more stable than stock and crypto prices however there is an argument that Gold has become outdated with no real modern day use for the metal. Physical commoditise such as Gold or silver are not seen as high risk therefore the rewards are also often low; one reason why Gold is often viewed as safe.  If you choose to invest in Gold or Silver, you must understand that they will not produce high returns on investment and that there still exist an element of risk.

Conclusion

Investments do not guarantee a return, investments in shares and cryptocurrency both have elements of speculation; trading history may provide some data relevant to the financial decision holder although financial history of a stock or business should not be the only data used when making the decision to invest. Other factors that should be considered is the market in which the business operates in, i.e., a countries economic policy may have a dramatic impact on a stocks demand. Demand plays a vital role in the cost of shares although demand only shows one aspect of the stock’s success/ failure.

Cryptocurrency is a riskier investment, driven by demand. Cryptocurrency is an investment of the future and will continue to grow, those interested in investing may consider the more affordable cryptocurrencies such as Stellar (XLM), XRP and Tezos.  Please note that you should never invest more than you can afford to lose.  Before investing you should always do your research.

Disclaimer: The article represents the view of the author and should not be regarded as financial advice, any investments made are done so at one’s own risk, the author and Halal Incorp do not hold any liability for the risk in any investments in the mentioned stocks, cryptocurrencies and commodities mentioned.

JOIN OUR NEWSLETTER
I agree to have my personal information transfered to MailChimp ( more information )
Join numerous visitors who are receiving our newsletter and learn about all the latest news in the Islamic economy and Halal sector worldwide. .
Subscribe today and receive a Free eBook