One of the hottest trends in the blockchain universe is the application of decentralized finance (DeFi) solutions. Today we will impartially review for our readers the Silicon Finance project, a new DeFi initiative aiming to solve a series of industry issues. The project’s team aims to achieve an increase in the safety of DeFi, with obvious benefits for the whole blockchain community. Furthermore, the initiative will look into a way to introduce more democracy and equality on Initial Dex Offerings…
Like stocks, investing in crypto allows you to earn a high ROI. However, whether it’s a stock market investment or a crypto investment, a formula to win over the market does not exist. Nevertheless, the crypto market has started to attract all kinds of investors.
A thorough understanding of the crypto market has helped many investors earn incredibly high returns. In 2021, the crypto investment makes perfect sense. On top of significant gains, crypto investment offers valuable exposure to investors to understand different types of cryptocurrencies.
Whether it’s stock market or crypto investment, it comes down to understanding inherent risks. Investors, however, have started to realize the crypto and blockchain industry is on the verge of more growth and will become stronger.
The crypto landscape now has the potential to transform the traditional financial infrastructure. Plus, new and professional crypto investors have access to a variety of exciting digital tools. Investors can use these tools to manage and review their crypto investments quickly.
As more crypto markets establish, more companies want to reap the benefits of the cryptocurrency industry. There is a reason major financial players like PayPal and Square have made it easier to use crypto to buy or sell on their platforms. For instance, Tesla owns over $1.5 billion in Bitcoin, whereas Square has made millions of dollars in Bitcoin and similar digital currencies.
Crypto investors are also aware that many factors can increase the risk of a cryptocurrency. For starters, a high adoption rate is a good sign that a cryptocurrency is thriving and maturing. It is the main reason companies and independent investors prefer to gain more exposure in cryptocurrency and consider the safest investments to make significant returns.
Crypto as a Long-term Investment
Long-term investment objectives are easier to achieve, whether you want to invest in Bitcoin, Ethereum, Dogecoin, or another digital asset. The most successful cryptocurrency projects have a solid market presence and offer a sense of assurance to crypto investors that they won’t lose money on the investment. In addition, the more widespread adoption of crypto continues to help investors make long-term gains.
Considerations: How Investors Should Approach Crypto Investment
As mentioned earlier, most cryptocurrencies have no backing by any hard assets. But when it comes to top-tier cryptocurrencies like BTC and ETH, users can automatically send money through smart contracts and meet specific conditions.
Like the stock market, the crypto market often experiences falls and then bounces back. But unlike stock, crypto investment boils down to pure speculation. The trick is to pay close attention to price changes. Ideally, investors focus on crypto price patterns that may have a profitable future. Another perk crypto has over stock market investment is that the crypto marketplace is far more optimistic.
Apart from a sentiment-oriented investment approach, crypto investors should be aware of extreme market volatility. The crypto market is famous for falling or rising over 50% in a short period. Cryptocurrencies may be newer than traditional stock investments, but it has become a lucrative market that favors investors. In 2021, there is an endless speculative drive that continues to draw the attention of investors from all over the world.
Although crypto space has had its fair share of obstacles, it continues to deal with regulations in different countries. Still, it looks like there is a new dawn of crypto investment that hints at a broadminded approach and perception towards popular and new cryptocurrencies.
Time Factor in Crypto Investment
Time horizon is integral when you want to earn immediate gains from your investment. Unfortunately, when it comes to stocks, risky assets tend to have a long and stretched timeframe of as long as three years to navigate market volatility.
In crypto investments, the time horizon is short and depends on the digital asset’s market volatility rate. Nonetheless, most investors seek out short timeline crypto investments to make quick returns.
Investing in Cryptocurrency over Stocks
In the past decade, crypto rose to the center stage in the digital and tech world. But cryptocurrency paired with blockchain is more than just a phenomenon now. It helps investors garner high value. Whether you want to make short-term or long-term gains, there is a long list of cryptocurrencies that appeal to different types of investors.
According to Bloomberg, the total valuation of digital currencies amounts to over $2 trillion in 2020. For instance, Bitcoin is a perfect combination of a practical and popular cryptocurrency that accounts for $1 trillion on its own. CoinMarketCap.com analysis shows that investors now invest in cryptocurrencies with much more consistency and enthusiasm.
A Chance to be Part of the Digital Gold Rush
Today, crypto investment serves as the new digital gold rush, and investors want to make the most out of it. Whether you’re a new or an expert crypto investor, you could avail some gain over time. As rapid investments start to pour in cryptocurrencies, many investors prioritize crypto over stock market investments.
Some investors now question whether or not the stock market investment is as profitable as crypto investments. The main distinction between the two is that stocks refer to an interest in the company’s ownership that supports cash flow and organizational assets. Conversely, crypto doesn’t have any form of backing. So, on the surface, it might make crypto investments riskier than stock.
However, as long as investors know changing market dynamics, they can make profitable crypto investments. Still, if you plan to invest in cryptocurrencies, make sure to make a comparative analysis just like traditional stock investments and opt for long-term gains.