Cryptocurrency is dominating talks in financial circles. Long-term critics seem to be having their way thanks to the ongoing bear market run. Optimists, on the other hand, are playing this down as just a temporary setback in a long journey ahead. It is all confusing especially if you are debating whether or not to invest in cryptocurrency.
This article will put your mind at ease by explaining just how well investing in cryptocurrencies at this moment would work for you in the near future.
Cryptocurrencies are here to stay
Cryptocurrencies have grown from a simple concept to a whole market worth billions of dollars. Whole companies have been founded on cryptocurrency, and many of them are doing fairly well. Merchants all over the world are also accepting transactions from certain cryptocurrencies as payments.
The first cryptocurrency, Bitcoin, was formulated as an alternative to fiat currencies. Cryptocurrencies are decentralized, which means that governments and financial institutions have limited control over them. Most cryptocurrencies are also beyond manipulation thanks to blockchain technology air-tight security. In fact, cryptocurrencies have already been adopted for main-stream use especially in underdeveloped regions – some countries such as Venezuela are viewing the cryptocurrency market as the solution to the ongoing financial crisis.
As such, you can be sure that your investment in cryptocurrency will be secure – the money in your wallet will not just vanish into thin air. The worst that can happen is that your money will be tied up for a time, but you will likely get good ROI in the foreseeable future.
Logic calls for it – buy low, sell high
When Bitcoin came out in 2009 critics brushed it off as nothing but just an empty promise, partly because it was so cheap. It sold for cents back then, but its price soared to over $19,000 in just 9 years. Expectedly, those critics were punching themselves for not investing in the crypto coin back then.
Optimistic investors are not making the same mistake twice – to them, the ongoing bear market is the perfect opportunity to invest in cryptocurrency. Prices are low enough, for now, to be affordable compared to several months ago. What’s more, there are more people willing to sell lucrative cryptocurrency even at prices below market value.
Buying cryptocurrency at this time would increase your margin of profit supposing that prices rebound to their earlier levels – and this is a very likely possibility for strong cryptocurrencies such as Bitcoin and Ethereum.
Optimists are right – it’s a temporary setback
The fact that cryptocurrencies are here to stay has been established. Now the question on everyone’s minds is whether the crypto markets will recover. The answer is affirmative: they will recover and prices will rebound. The only uncertain thing is when this will happen.
There are over 2,000 cryptocurrencies and tokens today, but Bitcoin still remains as the market’s overall symbol and pacesetter. To this end, it is Bitcoin that triggered the current bear market. The trigger may have been a long time coming, but it was also influenced by unforeseen factors. Fear among investors led to a large-scale sell-off, and this spread to other cryptocurrencies. Bitcoin’s prices are still falling but there are sufficient fail-safes in place to ensure that they eventually rebound.
Additionally, other cryptocurrencies are also carving out markets for themselves and will soon be free of the influence of Bitcoin. When this happens, when other cryptocurrencies find their footing, there will be greater independence in the markets and this will create more investment opportunities. You could also find that some cryptocurrencies and tokens, in particular, are more convenient than just as investment securities and digital currencies are taking over digital platforms’ payment systems.
Fiat currencies are not as stable as they may seem
Fiat currencies qualify as a convenient medium of exchange, but they are built on paper. Their value is what the government says it is unlike gold and other securities whose values are determined by natural market forces. To this end, governments can inflate and devalue their currencies at will. This is the case with France and the reason behind the ongoing “Yellow Vest” protests – the government has not only been increasing taxes but also printing more money and consequently eroding people’s savings.
Fiat currencies have crashed in the past, and they will do so again and again. Venezuela and Zimbabwe are perfect examples of just how unstable fiat currencies are. Major currencies such as the U.S. dollar and euro are more resilient, but even they are facing uncertainty amidst the ongoing political tensions and economic uncertainties.
It will help to have an alternative form of currency when fiat currencies eventually crash. Gold is the first thing that comes to mind, but it is expensive and inconvenient for exchange. Cryptocurrencies, however, are an ideal option as they have already carved out a place for themselves and proven that they can be used in real-life – many merchants, including major global brands, are accepting Bitcoin as a form of payment and considering embracing other major cryptocurrencies.
Interestingly, some people taking place in the Yellow Vest protests are calling on the public to switch to Bitcoin. What’s more, tobacco shops across Paris and much of France are making plans to become Bitcoin outlets come 2019.
Cryptocurrencies will only get better
Agreed: cryptocurrencies have their shortcomings in spite of their amazing benefits. For instance, most cryptocurrencies in the market are not viable investment vehicles. What’s more, some cryptocurrencies and tokens are outright frauds as con artists are taking advantage of the highly lucrative Initial Coin Offerings (ICOs).
Cryptocurrencies should stay decentralized – that is what sets them apart from the fiat currencies. However, there needs to be some order in the markets or else they will lose their credibility. Interested parties realize this and plans are already in place to weed out frauds through peer-to-peer strategies. Governments are also taking note albeit with mixed responses – some countries such as Switzerland and Singapore are passing friendly regulations designed to embrace cryptocurrency while other are banning them altogether, unfortunately.
To this end, cryptocurrencies are expected to become much more stable and less volatile as they settle in and dig out their course. This will make them favorable investment vehicles, and you will stand to profit the most if you invest in the crypto markets while it is still early.
As mentioned, there are over 2,000 cryptocurrencies in the market today. All of them market themselves as unique and promising, but the reality is that only a few of them are. To this end, it pays to choose the cryptocurrency you invest in wisely.
If your goal is purely profit-making, then you should consider going for reputable security tokens such as Bitcoin as their value is guaranteed (or most likely) to rise over time. That, however, doesn’t mean that only security tokens are viable investment vehicles. Private tokens, as well as certain utility tokens, will also give you great value for your investment one way or another. As such, conduct comprehensive research before committing your money or else you will join the list of investors who were lured into the markets while at their peak with the promise of quick cash.
If you do decide to invest, do not expect quick returns unless you are willing to settle for the minimum – the ongoing volatility is still creating profitable opportunities. Analysts project that the current bear market may last till 2020, but two years is not a long time to wait considering how profitable the crypto markets are.