Hello dear visitors of the investment exchange portal Investlb.com. Today we have a special guest who will share his experience in a new type of investment – about investing in bitcoins. Many investors are accustomed to the classical types of investments: stocks, currencies, treasury securities, etc., but gradually growing influence has a cryptocurrency. For example, only in the last 2 months the rate of bitcoin has increased more than two times, experts suggest that this is not the limit. However, if someone prefers mining (emissions of cryptocurrency), then there is another option — investing in bitcoin for a short period. How it all works, Yuri Litoshik who has experience with cryptocurrency almost from the very beginning of their appearance will tell us.
Investing in bitcoins: is it possible to make money on cryptocurrencies?
Good day, Yuri. Tell me, how did you get into this interesting field of trade?
Since childhood I had an interest in numbers. Stock markets seemed to me a kind of platform where there is the dominance of numbers: they are constantly changing, correlated with each other, but, unlike gambling, there are rules of behavior, laws. In the stock market, the intelligence of one person is opposed to the intelligence of the other. It’s like chess, but more active.
I noticed that you are one of the few of our guests, who has no economic education. And yet you came to the economy?
In fact the exchange is only 50% of the economy, everything else is endurance, the ability to analyze, to understand figures. I have a mathematical-cybernetic education, and it always helps. Being a student, I went on a course of Forex (there are a lot of them now, and free), but even at the courses no one was able to explain what is the technical analysis. Then I began to look for different approaches to the principles of trade.
Can you tell more about technical analysis?
Technical analysis is the attempt to find any patterns based on historical data. But the market is fickle. I would argue that technical analysis does not work, and so far nobody has proved me the opposite. However, if it worked, it would be possible to easily predict the market behavior.
What formed your first profit?
Investing in bitcoin was not the first, we started with futures on world indexes (S&P 500, FTSE, DAX). We were not interested in Russian market. Someone is always trying to look in price action some complicated patterns, but what is the sense? We have expanded our trading opportunities, coming to the US market. However, it is heavily regulated — work without a broker on the American markets is practically impossible. By the way, we even came under investigation by the SEC, but nothing happened, even the penalty is not imposed. But the situation was difficult, but we had to understand the legal intricacies of different countries.
Why have you decided that investing in bitcoin is promising?
I’m a programmer by education. I watched the cryptocurrency from 2009, when it increased from 1.06 to $ 30. But after it collapsed and survived, we realized that investing in bitcoin can be promising, then a bitcoin fund was created. Any investor could participate in it. But here we encountered some legal obstacles. Bitcoin could not be put on the balance – for auditor it was difficult to explain where we send real currency, if we get nothing in return. In principle, the problem was solved in an individual order.
Notice that in Russia we don’t work with bitcoin because there are far more pleasant jurisdiction. In Russia, the attitude towards bitcoin has two ways: someone is trying to work with it (for example, Kiwi or Sberbank), and someone is trying to ban it, considering that it is a means of financing terrorism.
How do you see the future of cryptocurrency?
For now, the cryptocurrency is interesting for the institutional investor. Individuals are accustomed to “feel” the cash, to have guarantees, for example, a credit card issuer, which can block the payment. Investing in bitcoin is an electronic cash, where the risks are borne by the investor.
The advantage of bitcoin is the blockchain (the database containing all the information about the transactions and operations made by the participants of the system). Thanks to the blockchain from bitcoin, there is no single issuer, which reduces the dependence on the polar counterparties, as the EU and the USA. In other words, if USA and EU prohibit Russia to place, the debt securities in Europe, in cyberspace there ane no sanctions.
Someone says that the advent of bitcoin jeopardizes the existence of banks. Not at all. On the contrary, the world bank is already actively conducting research, studying the technology of the blockchain, and that means new and high-tech services. So investing in bitcoin can be interesting for this reason.
And yet, if you move away from high technology, where would you suggest to invest? If we talk about classic markets?
All the instruments associated with interest rates. Interest rates have a huge impact on the stock market. Example: now investors are watching, not for what company made a profit, not a new product it launched, but will the fed raise the bid or not. By the way, after the referendum in the UK, the probability of raising rates is very small. Even before the referendum it was necessary to open short positions on the fall of the pound against the dollar (it would have happened anyway), would have been interesting strategy that includes a drop in bonds of Italy and Spain.
For private investors with small capital I would recommend Express markets: futures on LIBOR, the rate on the bonds of Europe.
Thank you, Yuri. We are sure that our readers probably have questions about investing in bitcoin that you can set at the bottom after the article. We remind our readers that in the section “Interviews with traders” we publish independent opinions, and you can always engage in debate or express your thoughts.