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'Cryptocurrency to the moon' is a phrase that is being kept on hold recently. Yes, after hitting a record high of US$68,500 in October, Bitcoin, along with other cryptocurrencies, is keeping a low profile. Since 2021 was a big year for cryptocurrency investors, they hope for further breakthroughs in 2022. Unfortunately, things didn't unfold the way they wanted. Cryptocurrency in 2022 feels gloomy with familiar names like Bitcoin and Ethereum undergoing a slump. Despite its volatility, experts say that digital tokens are long-term investments so these price falls are purely for a brief period.
The cryptocurrency investors expected Bitcoin to reach US$100,000 before the end of 2021. However, cryptocurrency in 2022 has brought major disappointments to enthusiasts as the whole market is on a downward trend. But there is far more than just Bitcoin to the digital tokens sphere. We have its direct rival, Ethereum, which has been doing well so far. Although ETH mostly follows the BTC's trend, it has outperformed the top cryptocurrency in 2021 on growth rate. On the other hand, we also have memecoins that get the help of famous people like Elon Musk and Mark Cuban. With the public figures' help, Dogecoin and Shiba Inu went on an impressive price rally for a short time. While these are a compilation of events that has happened in a span of one year, how are the cryptocurrencies performing in the long run? Can they manage to help investors get good profits from their initial investment? We explore.
Although cryptocurrency is indicated to be a volatile form of investment, people still opt for it. It is not entirely safe but crypto currencies are here to stay for a longer period, which makes them a 'worth the try' kind of investment.
However, in many instances, crypto currencies have proved to be risky. For example, an increasing number of hacks and attacks are happening on cryptocurrency exchanges, which is putting the investor's digital assets at risk. Although famous exchanges like Coinbase and Etheruem offer amazing facilities to store investors' digital assets, people are afraid of putting their tokens at risk. Therefore, some even opt for cold storage options.
Besides, there is growing competition in the cryptocurrency market. Currently, there are over 13,000 cryptocurrencies in circulation. Only 10 to 20 out of them are familiar among investors. There is no assurance that The crypto currencies you invest in might actually turn out to be profitable. A good number of cryptocurrency projects have disappeared in thin air so far, disappointing potential investors.
Since cryptocurrencies have no central authority or an institution to moderate the swings, their value is not pegged to or depends upon anything specific. However, the adoption and market capitalization are the only factors driving them. Therefore, critics have always slammed crypto currencies for keeping many things in the shadow.
Fortunately, over the past few years, cryptocurrency investors have started seeing the potential of virtual assets. They realized that even without a central authority, cryptocurrencies can hold up their value for a long period. More than being a digital asset, crypto currencies are also bringing an 'internet' kind of revolution to the world. Today, blockchain technology is hailed across many industry verticals. Building cryptocurrencies on the blockchain network and extending its features constantly and powering the underlying technology is a good way to keep both the token and the disruption afloat.
Experts always advise investors to keep just 5% of their whole asset folio in cryptocurrency. Since crypto currencies are extremely volatile, there are high chances to lose your money. Therefore, they also suggest investors have a solid financial plan that includes emergency savings and solid retirement plans even if they have invested in cryptocurrency.
When you have a backup plan in hand for any unprecedented situations, cryptocurrency investment for a long period seems feasible. However, it still comes with simple rules that investors need to follow. You shouldn't get obsessed or make emotional decisions while investing in digital tokens. Selling the assets just because it is on the downswing is a foolish act. If you are planning for profit through digital assets, hold on to them for a longer period.
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Disclaimer: Analytics Insight does not provide financial advice or guidance. Also note that the cryptocurrencies mentioned/listed on the website could potentially be scams, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. You are responsible for conducting your own research (DYOR) before making any investments. Read more here.
