In recent years, there has been a significant increase in the hype surrounding digital currencies. Everyone is talking about cryptocurrency, and those who don’t know what it is or haven’t invested in some type of crypto feel left out. However, analysts at Paper Writing Pro advise against being caught up in the hype because cryptocurrency is still very much unpredictable and volatile.
Before delving into the intricate parts, let us briefly examine what cryptocurrency is.
What Is Cryptocurrency?
Cryptocurrencies are digital currencies that take the form of virtual tokens or coins which people use for online purchases and investments. Cryptocurrency involves advanced coding. Each coin is a unique line of code that hackers can’t copy, making it easy to track and identify. Crypto markets are decentralized; they are not issued or backed by a central authority such as the government.
With all the buzz cryptocurrencies have been getting, you may feel pressured to invest in them. It’s not a bad idea to do so. This article will be helping you with things you need to know about the cryptocurrency market.
What You Need to Know
There are intricate details about cryptocurrencies you need to be aware of before investments. Some of them are:
- Do not invest what you cannot afford to lose. Even suckers for cryptocurrency have given this advice. In the space of April and July, Bitcoin’s price has fallen from $60,000 to less than $30,000 and then risen again to something around $50,000. Its volatility is unsettling and is why various experts have expressed themselves and given advice to those interested in investing in digital currencies.
Recently, Jamie Dimon, the CEO of JP Morgan, one of the largest investment banks, tagged bitcoin as a fraud. He went on to say that he would fire any of his employees trading Bitcoin for being stupid. Harsh, right? That is the extent of his mistrust.
Experts at help to write an essay online have also advised that if one is going to invest in cryptocurrency, one should not invest more than 2% of their liquid portfolio. Invest an amount that won’t be traumatic if you lose it. There are others who think that investing directly in cryptocurrency is too risky. They advise that getting indirect exposure through obtaining bitcoin-related stocks, investments in other digital payment companies such as PayPal is about the right dose when it comes to cryptocurrency.
There are no clear rules as regards cryptocurrency, and the ones that exist are at their infancy stages. The Chairman of the Security and Exchange Commission(SEC) commented that crypto transactions are characterized by fraud, scams, and abuse because there isn’t enough investor protection. He also said that investors are “likely to get hurt” if stricter regulations aren’t introduced.
However, legislators in Washington D.C and across the world are trying to figure out how to establish laws and guidelines to make cryptocurrency safer and less vulnerable to cybercrimes. China declared that all crypto transactions are illegal, putting an end to their use in China. The stance of the US is quite vague. Not having a clear regulation is a huge roadblock in the growth of cryptocurrency.
It is speculative
Cryptocurrency is relatively new, and a lot of things are riding on conjectures. There is no history to base predictions. Investors at RushEssay say that the right mindset to investing in cryptocurrency is one where you know there is the possibility of losing your entire investment. Cryptocurrency is in its infancy, so it is difficult to predict where it’s headed long-term.
Some experts like Billie Noble have had positive projections of cryptocurrency. Billie Noble, who is a technical analyst at TokenMetrics, a cryptocurrency analytics platform, thinks that the price of Bitcoin will only increase throughout the year. Regardless, cryptocurrency could flame out or have a meteoric rise. No one can say for sure. So, you should invest wisely.
Acceptance of Cryptocurrency
There is a huge possibility of a more general acceptance of cryptocurrency. Cryptocurrency is already a legal tender in El Salvador. Again, prominent companies across various industries have taken an interest in cryptocurrency. This could mean a lot for the crypto market as more acceptance equals more credibility, which would affect the value of cryptocurrency effectively in the long run.
Fintech companies such as Pay Pal allow users to buy cryptocurrency on their platforms. AMC Entertainment, the world’s largest movie theater operator, is working towards accepting Bitcoin payment by the end of 2021. Tesla’s current stand as regards crypto is ambiguous because of its back and forth with crypto. However, it holds billions of crypto assets.
When it comes to buying cryptocurrency, timing can save you from a lot of tears and heartbreak. Buying into a hot new currency before it becomes major may feel like the right thing to do, but it is good to sit back and monitor it for a while as these things follow a price pattern.
The purpose of this article is not to discourage you from investing in cryptocurrency. It is to provide an insight into the current happenings in the crypto market to influence you into making wise investments.