Cryptocurrencies Have Skyrocketed in Value in 2021
Interest and involvement in cryptocurrency investment has grown rapidly this year, capturing the attention of mainstream media. We seem to see them in all kinds of news, whether it’s due to fraud or Bitcoin hitting all-time highs. The volatility included an all-time high in mid-April, only for its value to plunge to around $30,000 in mid-July, before reaching a new all-time high in November at $68,000 before again dropping again to under $50,000. As a result of the popular metaverse and NFT concepts coming to the fore, an increasing number of people are beginning to invest in cryptocurrency for the first time. Thanks to BigONE’s access to data from the crypto sector we’ve analyzed the performance in 2021 of the top 300 cryptocurrencies ranked by market capitalization, and the results are surprising!
Sixty-seven of the top 300 cryptocurrencies by market capitalization were only launched this year, and 85% of them will have more than doubled in value by 2021. In addition, there are 114 cryptocurrencies which have increased in value by more than 500%, and a further 74 crypto tokens which have increased in value by more than 1,000%; with a staggering 15 cryptos which have rocketed in value by more than 5,000% this year.
Volatile cryptocurrency
BigONE’s accessible content makes it easy for people to believe that cryptocurrency is a simple way to make money, but the reality is that investing, whether in cryptocurrency or stocks, is not that simple. Because cryptocurrency investment is inherently volatile and speculative, investors must not only understand cryptocurrency, but also understand the proper timing for investment.
Consider this year’s market: if the investment took place between April and early November this year, if in other words you buy cryptocurrencies at a high price, there is no guarantee their value will rise in a short period of time. By their volatile nature, if the price of cryptocurrency rises, it will fall again at some point. When we look at the top 300 cryptocurrencies by market value, we can see that cryptocurrencies that performed well in the past have failed to re-enter the top 300 for a variety of reasons. There are also some cryptocurrencies whose value has plummeted dramatically.
To confirm the impact of cryptocurrency market fluctuations on cryptocurrency prices, BigONE compared the market capitalization rankings at the start of this year with the current market capitalization rankings and discovered that 136 of the top 300 cryptocurrencies at the start of the year had dropped off the list. To put it another way just over half, only 164 cryptocurrencies remain in the top 300. As a result, there is no completely risk-free investment, particularly in cryptocurrency. Volatility comes with the territory so while this should not put you off crypto investing, it’s worth putting in the time and effort up front before investing.
Uncertainty in the crypto market always exists
Although cryptocurrency will continue to advance by leaps and bounds in the year ahead, the future development of the cryptocurrency field still has a long way to go due to the influence of several factors such as crypto industry regulatory policies. Some analysts believe that this is good news for the cryptocurrency industry because the intervention of industry regulatory policies means that cryptocurrency’s future development will soon be supported by national policies, resulting in a sustainable industry for the longer term. Regulation also serves to weed out bad actors while also improving the reputation of the industry.
If 2022 follows the same pattern as 2021, inevitably some cryptocurrencies may be removed from the top 300 list by this time next year. This will be even more difficult for investors looking for long-term investment opportunities in cryptocurrencies. If you intend to begin investing in cryptocurrency in 2022 with the expectation that the value of the cryptocurrency you invest in will significantly increase during the year, it will be critical to weigh the risks and returns before investing. Also bear in mind the critical difference between trading and investing. Investors typically purchase cryptocurrencies and hold them for an extended period hoping that their value will rise over time, resulting in a profit. While crypto traders typically prefer to take advantage of cryptocurrencies’ rising and falling opportunities to buy and sell in a shorter period. Although traders make less money than investors, they often make money.
With around 15,000 cryptocurrencies in the industry currently, BigONE advises investors to be patient when selecting investment projects and to take the time to understand each cryptocurrency they are interested in. Take a close look at the people behind the cryptocurrency you’re interested in, read the whitepaper, and consider its core strengths and potential risks for its future success.
Don’t invest more than you can afford to lose
One way to reduce risk is to use a reputable cryptocurrency exchange, such as BigONE. Another essential strategy is to never invest more money than you can afford to lose. Although investing in cryptocurrency can result in unexpectedly high returns, it can also result in losses. By taking a sensible planned approach with your investing strategy you can ensure that even if you invest in a failed cryptocurrency, you will not suffer a significant financial setback.
