How does one invest in cryptocurrencies? Would it be like investing in other stocks (say Google, Microsoft), or would the investor actually have to install the program on their computer and purchase the cryptocurrency.

Please clarify.

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    :%s/invest/speculate/g – Chris W. Rea Jan 6 '17 at 1:53
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    Agreed; this isn't investing. There is nothing inherently driving crypto currency values in any particular direction, and no guarantee that any particular version won't lose popularity and crash hard at any moment. – keshlam Jan 6 '17 at 2:43
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    Since this question was asked BTC has fallen ~20%. It's not for the faint of heart. – quid Jan 6 '17 at 21:56
  • Since this question was asked BTC as gained a 10x. I hope you invested :-) – Anthony Russell Feb 15 '18 at 17:56

The folks who got rich in the California gold rush were the ones who sold supplies to the prospectors. If you really believe cryptocurrencies have a significant future, the investment play would be in companies which supply the users.

  • I like your answer – Rhonda Jan 7 '17 at 23:32

How does one invest in cryptocurrencies?

It is not a settled principle that dealing in crypto currencies is investment.

Would it be like investing in other stocks (say Google, Microsoft),

No. This is not like regular stock trades.

would the investor actually have to install the program on their computer and purchase the cryptocurrency

Depending on crypto currency, you would need to have some kind of small software / vault installed to store the keys. There are different exchanges that allow you to buy or sell crypto currencies. These are all virtual market places, some reputed others not much ... there is very poor regulatory framework for these exchanges. In past such market places have gone down without much recourse.

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    If they work at all, cryptocurrencies would be like other currencies. You can't really invest in currencies. You can hope to find arbitrage opportunities, or hope their value relative to other things happens to move in a direction that lets you buy low and sell high, but since these produce no income themselves there is no inherent bias toward their value increasing, and no guarantee that their value doesn't crash next week. Gambling, not investing. An investment in this area would be to buy into a company which profits from this market. – keshlam Jan 6 '17 at 16:58
  • @keshlam fully agree. It is gambling to an extent. However every one remembers happy stories... Like record high price... But not the crash in price or bankruptcy of crypto exchanges – Dheer Jan 6 '17 at 17:25
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    Selective memory, right. The bane of many. – keshlam Jan 7 '17 at 0:18

Crypto currencies are more a speculative gamble then an investment. A traditional equities investment like Microsoft is marked by a longer history. It may be that in the future crypto currencies gain enough acceptance to be on par with other currencies like the British pound. The 'Forex' market is built around exchanging one currency for another.

There are a bunch of places where you can buy bitcoins. You can checkout Coinbase. Do not 'invest' any more than you can afford to lose! There have been multiple scandals where bitcoin holders lost the full amount.

I'm holding 1.5 bitcoins myself just to see what it does. It is more for fun than an investment.

  • After the crash, I am telling everyone it is for fun as well. :'( – Prodnegel Jan 6 '17 at 22:15
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    What crash, it's up ~300% this year... – quid Jan 6 '17 at 23:07

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