The excitement around the cryptocurrency subsided a bit. Regular depreciations, despite the subsequent recovery, discourage cryptoinvestors. Many believe that the golden time of cryptocurrency has passed and that the market begins to fall. Is this opinion justified? Is investment in cryptocurrency justified today? We will describe in this article!
Investing in cryptocurrency today: doubts and risks
The situation on the crypto-market is determined by a number of certain factors. In moments of recession, the influence of negative factors is often overestimated, and the influence of growth factors is underestimated according to the principle “it is better to be prepared for the worst.”
This principle is useful, but ignoring the positive aspects affects investment strategies is almost as badly as ignoring the negative ones. If negative ones are viewed by everyone closely, then much less attention is paid to positive ones.
The year 2017 showed an unprecedented growth in the crypto market. By the end of the year, Bitcoin surpassed all expectations and pulled the rest of the cryptocurrencies. Investors, who invested in the most dubious coins, received income, although all criteria had to suffer losses.
Soon the decline began. Experienced investors expected this, because they knew that the growth of any asset could not continue for a long time at a rate of 50% per week.
The less experienced, the majority of whom turned out, were at least disappointed in the investment, which began to behave more naturally on the market, as much as possible – they lost money by buying cryptocurrencies in the process of their growth and selling when they fell.
Against the background of long and rapid growth, the fall in assets psychologically seems an unlikely event. It becomes even more unexpected for investors and the more frightening they are.
The contrast between rapid growth and a sharp fall keeps cryptoinvestors from investing today. People do not exclude that the situation will recur and that if they invest in cryptocurrency now, they will suffer losses in the future due to another fall, which no one expected.
Investing in cryptocurrency today: market growth factors
But almost every factor that can provoke a depreciation of an asset selected by an investor is contrasted with a factor that can cause a rise in value. Today, such factors are sufficient inside the cryptoindustry and outside.
As soon as the number of active crypto users increases, cryptocurrency will receive support in the form of those goods and services, for the purchase and order.
Subsequently, their course will not only grow in accordance with the value, but will also stabilize due to the fact that this value will be more or less defined. The population is ready to use money that does not go through banks and has a number of other advantages.
An increase in the number of sites that simplify the purchase, exchange and storage of cryptocurrencies, or rather, increase their reliability and efficiency. Many of the existing ones are far from ideal and repel users, returning them to more reliable fiat resources.
The development in this direction is obvious. Bitcoin accepts more and more companies, in any way with unrelated cryptocurrencies. Cryptocurrency resources bring tangible profits to owners, so the emergence of more reliable ones can also be calculated in the cryptosphere – the main need of users, and taking into account demand there will be supply.
The problem of transaction efficiency is also not neglected, and since some solutions already exist, we can expect that cryptocurrencies will soon overcome this obstacle, and they will grow.
A gradual increase in the number of companies working with cryptocurrencies is more likely, the same gradual increase in the number of crypto sites, so the growth of cryptocurrencies under their influence is likely to be gradual.
But if a revolutionary solution appears in the field of the same transactions or in another – any solution that significantly simplifies the use of cryptocurrencies, then you can count on a sharp influx of users and investors, and behind them – at least a sharp rise in the rate.
Cryptocurrencies appeared as an alternative to fiat money for a reason, and because of the imperfection of them. If people were completely satisfied with the current economic system, the world community would not reflect so actively on the issue of its replacement.
The more the current system demonstrates its imperfection, the more strongly the alternative system is valued, and the shortcomings of the current one are factors that increase the value and popularity of the alternative.
For example, the growth of cryptocurrency in individual states is provoked by the devaluation of national currencies. At the global level, the spread and growth of alternative money leads to a decline in the rate of global or simply popular currencies – the dollar, euro, yuan and others.
Forerunners of the economic crisis in one or another part of the economy inevitably provoke a surge of interest in cryptocurrency. Economic measures undertaken by individual states that are unpopular with the population, such as tightening control by the tax authorities and others, may also affect the growth of the cryptocurrency rate.
The world economy is now in need of constant construction of props. So far, they have been proven traditional methods over the years. But it is possible that, over time, both individual sectors of the economy and entire states will turn to cryptocurrencies not only as alternative money, but also as an alternative method of strengthening fiat money.
There is no doubt that every attempt to solve economic problems with the help of cryptocurrency will be accompanied by an increase in their rate, and the more successful the solution is and the larger the sector on which cryptocurrency is used, the stronger they will grow.
In recent years, digital technologies have been developing at an astronomical speed. Humanity after them is rapidly moving into the virtual space. Sooner or later, all services that can be provided via the Internet will be provided via the Internet.
In the conditions of such a development of the sphere, digital money cannot but spread and begin to be seriously valued, if only because it was initially sharpened for use in the virtual space – unlike fiat money.
Given that cryptocurrency is introducing more and more trading platforms, and various state devices mainly in advanced countries see them as a means of simplifying financial interaction with the population, cryptocurrency growth due to their introduction into the global digital services sector is very likely, if not today, then for the coming year for sure.
Despite regular market downturns, the cryptosphere as such is developing more actively than many others. Today it has many potentially promising areas with which programmers are enthusiasts of sports interest and professionals who know that their product will be in demand due to quality regardless of the current rate of cryptocurrency.
This is the creation of new cryptocurrencies, and ensuring the performance of existing ones, and the development of support systems that are universal for certain algorithms or even for cryptocurrencies as a whole.
On the one hand, mining of cryptocurrencies can be simplified; on the other hand, new protocols are being created, with the third one, the ICO procedure is being optimized at the technological level, and so on.
More than half of the news that positively influences the cryptocurrency rate today are reports of new developments. There is no reason to suppose that this news will end.
More effective development provokes sharp and strong jumps in the course. Full-time high-quality optimization is able to reverse the trend of the emergence of new currencies simply supports the market in moments of recession and pushes it in moments of growth.
The development of any area is the most important factor in its support and distribution among users, and the cryptosphere is no exception. Therefore, as long as interested developers are concerned, the market will periodically experience periods of growth, and it’s not worth waiting for its complete collapse.
Investing in cryptocurrency today: emerging market prospects
All of the above leads to the conclusion that conclusions about the imminent end of the cryptocurrency market are premature. First of all, it has not yet completely formed. The current course jumps are a consequence of its dampness and undefined status.
There are more than enough resources and developers from around the world who are actively working on cryptocurrencies and politicians trying to use cryptocurrencies for the benefit of their country’s economy and financial figures who theorize about modernizing the world economy with cryptocurrencies, and theorizing not without result.
Resource of cryptoindustry – ordinary users interested in a simple and convenient means of payment, that will allow you to enjoy the benefits of ubiquitous globalization and virtualization. All of the above provides a sense of the development of the crypto industry and the development of the crypto market.
At this stage, it can be expected that the market will fluctuate greatly for some time. Perhaps there are some more significant jumps waiting for him, at the peak of which new investors will come, and significant drops, during which newcomers will be disappointed again, spreading doubts.
Probably, they will listen to doubts, because risks will be cited as arguments that are more prevalent in the emerging market than in the established one. Probably, a lot of water will leak before the society realizes that such a situation is absolutely normal, that there are risks in any market and that all currently existing markets were formed in this way.
Today, all that remains for investors is to take advantage of the emerging market — it is time to determine which of the factors for its growth and, ultimately, development has a chance to work in the near future and how strong.
And, of course, we should not forget that the emerging market, apart from growth, is also characteristic of declines and that any event in the process of stabilization of assets can be turned into a benefit if one understands what happens to the market in time.