Why Right Now Is a Good Time To Buy Cryptocurrencies
The cryptocurrency market has had a rough start to the year, with tightening economic policies causing investors to avoid riskier investments, including stocks and cryptocurrencies. As a new type of investment product, the current total market value of cryptocurrencies has fallen by more than 40% from the peak of nearly $3 trillion in November last year, further exacerbating the downward trend. There are deep seated concerns that the current downturn is just the beginning, and that the overall cryptocurrency market will experience a prolonged period of decline.
At the same time, more bullish investors and traders believe that the recent market drop is at a six-month low, and an excellent opportunity to buy cryptocurrencies. In BigONE’s view, this largely depends on whether investors have confidence in the longer-term price trend for cryptocurrencies. If you firmly believe that cryptocurrencies can make our future better, then starting to buy cryptocurrencies now will be a good decision. And if you are planning to buy your first cryptocurrency, BigONE believes that you should first stop and ask yourself some questions that will help you invest in the cryptocurrency market.
How much do you know about the cryptocurrency you want to buy?
Research and learning are a crucial part of any investment, especially when it comes to risky assets like stocks and cryptocurrencies. Before you start investing, you need to know what the cryptocurrency you’re buying is designed to do, and how likely it is to perform well in the future.
The following set of points can help you understand the cryptocurrency you want to buy:
· What problems does it solve, and how will it achieve its goals?
· How large is its potential user base likely to be in the future?
· Who are its current competitors and in the future?
· Who is its founding team, and what are their previous successes in crypto?
· What is its current market capitalization, and what factors might cause it to increase or decrease?
Finally, how will it issue new tokens, the total issuance, and how will they be distributed?
As an investor, you don’t have to be an expert in blockchain technology, but you do need to have a basic understanding of blockchain and how it works. This understanding can help you avoid being scammed and help you make more profitable investment decisions.
Are you ready for risk and volatility?
Investing in cryptocurrencies is risky; it can pay you great returns or cost you all your money. And it’s a relatively new industry full of unknowns. For example, the cryptocurrency you buy may encounter unexpected technical issues or security breaches or be replaced by tokens that use new technologies. These are the risks you will face when investing in cryptocurrency. The cryptocurrency market is volatile, and its price may rise or fall sharply in a short period. So, for new investors, this will be a tough time to be ready for a roller coaster ride. If you are put off by the volatile market, then it is recommended that you choose a safer investment method.
Although the short-term investment strategy of buying low and selling high is not recommended, when currency prices fall sharply, investors will have the opportunity to purchase cryptocurrencies at low prices. When you pay attention to some cryptocurrencies that you believe will perform well in the future, you can buy in large quantities when the currency’s price falls. Of course, the prerequisite for this type of purchasing is to avoid falling into the trap of panic buying but based on a long-term strategy for growing your portfolio. In the words of crypto influencer @APompliano on Twitter: “Good rule in investing: Don’t FOMO in after large price increases and don’t panic sell after large price decreases.”
Is your planned investment budget allow for losses?
Many investors are easily lured by news of big gains and want to put all their available funds into the cryptocurrency market. But the best way to protect yourself from risk is to invest only what you can afford to lose. This advantage is that you won’t face a financial crisis if the market drops significantly. And critically, if the market falls for a long time, you will also have sufficient funds and time to wait for the market to recover.
If the above questions help you start investing in cryptocurrencies, the next step is to decide how much money you want to invest and which cryptocurrencies you want to buy. A good approach is to buy more established cryptocurrencies like Bitcoin and Ethereum whenever possible. While Ethereum is the second-most valuable cryptocurrency after Bitcoin in terms of market capitalization, its blockchain technology underpins a wide range of decentralized finance (DeFi) enterprises. It is the first decentralized network to implement smart contracts, which are short pieces of self-executing code stored on the blockchain. It is also a tool used by developers to create apps for the Ethereum network. While these well-established cryptocurrencies may not have the means to earn eye-popping returns in the short term, but due to their fundamentals they have the advantage of being less risky, and these well-established cryptocurrencies will be a good starting point for novice investors.
When using a cryptocurrency exchange, you may encounter several issues. Still, good cryptocurrency exchanges provide new users with educational content to help them understand how to best use the platform. If you’re unfamiliar with cryptocurrency exchanges, I recommend checking out the BigONE platform and the resources available on the BigONEpedia e-learning platform. There you find a helpful video guide to deposit and withdrawal, with further support on the BigONE FAQ pages, starting with an account overview.
You can also get the latest market news and insights with our Crypto Daily News Daily Recap on YouTube, with co-hosts Vibin and the Crypto Beast. With additional coverage on subjects ranging from NFTs in football to expert discussion connect with Stuart.
