Cryptocurrency is a digital payment system. It exists as entries which are recorded in an online database. Your cryptos are always saved in your digital wallet. Cryptocurrency enables us to send and receive payments.
This currency is called crypto as it uses encryption to verify the transactions. Advanced level of coding is required as these currencies are being stored and transmitted from digital wallets to the public ledger.
4 REASONS TO INVEST/TRADE IN CRYPTOCURRENCY 1.Control over your assets:
There is no involvement of any third party as we can own and store these currencies as our own assets. Maximum profits can be received from the prevailing exchange rates as there is no middlemen which gives liberty to the traders.
2.Deflationary assets:
There are many coins like bitcoin which have limited supply when compared to the demand for the same. These types of assets are called deflationary assets. Each cryptocurrency has its own algorithm that puts a cap on their total supply
3. Good choice for long term investment:
Extreme volatility and fluctuations are seen in the crypto world. Investment in crypto is seen to be profitable. Example: The Bitcoin, which is priced at $68000, was available at $120 a few years back. It can be a good choice to diversify the portfolio.
4. Flexible and Independent trading
Crypto Market remains open 24x7 which makes trading very flexible for traders and it also makes it easy to organize their trading during any part of the day. Besides Bitcoin, Ethereum, Dogecoin, Ripple and there are many such coins which can help traders to diversify their portfolios.
1 RISKS INVOLVED WITH CRYPTOCURRENCY
1) High Volatility: The cryptocurrency market has very high volatility and any unexpected changes or news can lead to sharp movements in the price of cryptos. But if there is risk then only someone gets a reward.
2) They are unregulated: Cryptocurrency is not being regulated by the government or central bank. It is still not clear whether cryptos should be included as a commodity or currency.
3) Other Risks: Ownership of cryptocurrency is not enforceable in court, so the investors do not get any recourse if their cryptos are stolen from their wallet.
IS 2021, RIGHT TIME TO ENTER CRYPTO WORLD?
The crypto market has more potential to grow. Stock Market capitalization is about $100 Trillion, and the crypto market is still valued less than 2 percent today. So, entering any day in this market will be good enough for the investors.
Top 3 Cryptocurrencies according to their market cap 1. Bitcoin (BTC)
Market cap: Over $821 billion
It was created in 2009 by Satoshi Nakamoto. As all other cryptocurrencies
How does Bitcoin earn?
It relies on peer-to-peer software and cryptography. All bitcoin transactions and copies are recorded on a public ledger.
History
Bitcoin’s price has skyrocketed as it has become a household name. Five years ago, one could buy Bitcoin for about $500. As of October,2021, the price of a single Bitcoin was over $64000.
2. Ethereum (ETH)
Market cap: Over $353 billion
Ethereum is a cryptocurrency as well as blockchain platform. How does Ethereum earn?
Developers have to pay a fee to the Ethereum network to create new tokens or decentralized apps on the network
History
Ethereum has also experienced tremendous growth. In just five years, its price went from about $11 to almost $3,000, increasing more than 27,000% and now it is at $4600.
3.Tether (USDT)
Market cap: Over $68 billion
Unlike some other forms of cryptocurrency, Tether is a stable-coin, meaning it’s backed by fiat currencies like U.S. dollars and the Euro and hypothetically keeps a value equal to one of those denominations.
Tether’s value is supposed to be more consistent than other cryptocurrencies. Tether is often used as a parking place for high-frequency traders,
How does Tether earn?
The USDT is managed by using collateral. Tether Limited claims that for every 1 USDT that exists, there is 1 USD worth of currency kept at the reserve. In order for the price of 1 USDT to equal 1 USD.
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