Blockchain stocks - from a gathering of geeks to the international market.
Today the word "blockchain" has a magical meaning. One example of this is the renaming of the British IT company On-line in On-line Blockchain. This little trick allowed the stock price to go up by 394%. The main paradigm of the work has not changed but the "Blockchain" prefix worked and attracted capital. This little story is necessary to understand the main point - the choice of really effective stocks of companies associated with the blockchain technology as well as the secrets of disclosing the true potential of crypto investments.
How to invest in blockchain stock
There is a common way - to purchase stocks of a company or a corporation with its affiliated enterprises. Such a method allows you to get profit from the one asset's movement in the stock market.
Step 1. Study the company's activities
It is necessary to make sure that the blockchain technology is really the main activity of the company and not just a facade. Next, you need to check the following points:
- effectiveness of the blockchain use;
- legal component;
- actual position in the market;
- management system in the company.
The blockchain technology seems the most promising in logistics, procurement and other areas closely related to the processing and tracking large amounts of data. Contrary to common sense, many companies that do not need this change for a variety of reasons also switch to blockchain in an attempt to catch popularity. Based on this, it is necessary to determine whether this technology is really a necessary element. The popularity of the company is a matter of secondary importance.
Since the blockchain and crypto projects are in the phase of active regulatory measures now, it is necessary to independently study the current state of the company's jurisdiction. In addition, it is necessary to carefully examine all the submitted documentation as well as agreements on the stock acquisition (what rights the shareholder gets, the possible terms of the contract).
Step 2. Gathering information about competitors and forecast for the future
This step requires a certain degree of awareness in the situation on the crypto market. The analysis of prospects should be made up of the current situation and the development of related technologies. Pay attention to competitors and their products. Preference should be given to unique projects whose work on improving their own indicators and progress is clear since they started.
What is portfolio investment in stocks?
The possibility of portfolio investment for the blockchain projects is the key to hedging volatility risks. Stocks should be selected so that each share of one company balances the share of another company. Portfolio offers are of two types:
Ready-made portfolios already contain stocks, which can give a profit. Such a method is wrongly regarded as the destiny for newcomers. A correct stock portfolio is a matter of experience - not every investor who previously had experience can create an ideal balance the first time.
Open portfolios imply the independent formation of stocks. This method is beneficial for professionals who understand all the nuances.
Stock or primary asset?
The choice between acquiring stocks and investing in primary assets is a matter of taste. To determine the most suitable option, you need to carefully study each offer since the opportunities for profitable investment can vary significantly. Generally, the stocks are purchased for long-term use. Primary assets, in most cases bearing a lower cost, are more affordable. As a consequence, they acquired great popularity as a speculative instrument.
The benefits of investing in blockchain technology
While the popularity of blockchain allows companies to develop and the interested parties have wide opportunities. There are several principles for successful investing (in crypto stockor a primary asset):
Investing after a recession. To identify the appropriate entry point to the market, you need technical analysis. It will allow you to see the basic levels formed by the price as well as the possibilities of the further progress.
Investing at the moment of demand for the goods or services. As an example, consider the Eastman Kodak Company (KODK). After a prolonged stagnation, the company decided to issue its own crypto currency. The reaction of the market was visible. Even despite the correction, those who managed to catch the first news wave got an excellent opportunity to make the quick profit. This example is also an illustration of the fact that effective work can be carried out with the news support. Accordingly, the acquisition of stocks or investment in a primary asset is a task that includes monitoring and learning the news background.
Next, you need to consider some signals on the charts, which can become the basis for making a decision about an asset.
- The flat zone is the waiting area (asset storage);
- In most cases, the price direction the gets a continuation after leaving the flat (if the price went up, it is a signal to buy and vice versa);
- According to the laws of the market, correction comes after any active growth;
- It is necessary to work with stable levels (which the price has repeatedly bounced of) since they are additional resistance/support for the price.
The logic of creating portfolio consists in the stock selection of those companies that count on crypto currency technologies in one way or another. Along with the growth the blockchain in the economy, stock prices of selected players will take this into account, which private investors will be able to earn on.