Is it worth investing in cryptocurrency?
The cryptocurrency market continues to expand, and more and more investors are asking which cryptocurrencies will be most profitable to buy in 2022. Experts specializing in digital currencies often talk about potentially good investment options. In this article, we find out if can you gain usdc 8 interest and more.
Top 14 promising cryptocurrencies in 2022
There are more and more digital currencies every year, but not every one of them has great prospects. We suggest taking a look at the coins that can bring good profits in 2022:
- IMPT – a massive ecosystem that allows early investors to make money through pre-sale token purchases.
- Dash 2 Trade, a crypto-analytics and social trading project of international stature, D2T’s token has already raised more than $3 million in its current presale.
- Tamadoge is a Dogecoin competitor with an elaborate game universe and a variety of earning opportunities.
- Battle Infinity – a project offering Fantasy Sports games
- Lucky Block – a cryptocurrency that allows you to participate in games with prize drawings.
- DeFi Coin – DeFi sector’s promising digital currency.
- Ethereum is a time-tested coin that can seriously compete with Bitcoin.
- Cardano is a cryptocurrency developed based on rigorous scientific research.
- Dogecoin is a meme coin that is not losing popularity and growing in value.
- Avalanche – a digital currency whose capitalization has skyrocketed in a short time.
- Polygon – DeFi crypto that solves the scalability problem of a decentralized network on the Ethereum blockchain.
- Cosmos is the currency of a platform that conducts transactions between different blockchain networks.
- Binance coin is the native token of a major cryptocurrency exchange.
- Bitcoin is the most liquid and popular crypto.
Is it worth investing in cryptocurrency?
First, you need to understand that you can invest only in free funds, not borrowed money. Second, to make an informed decision that is not based on the emotions and opinions of the crowd, an investor needs to think about both the strengths and weaknesses of cryptocurrency assets.
The pros of investing in crypto include:
- High returns. Despite the volatility, cryptocurrencies are fundamentally rising in value and allow you to multiply your start-up capital in time.
- Low costs. Due to its openness and decentralization, the cryptocurrency market does not have a cumbersome infrastructure of intermediaries. Therefore, commission costs are minimal compared to more traditional investment instruments, such as stocks or bonds.
- Ease of purchase. While an individual must purchase securities through a licensed intermediary, cryptocurrencies can be purchased in a variety of ways.
- Low inflation risk. If the national currency can be printed in huge quantities by the state at any time, the such trick does not work with digital money. The blockchain system reliably protects crypto from inflation.
- A low entry threshold. You don’t need a large sum of money to buy tokens. Even a few dollars will allow you to purchase altcoins.
- Elimination of counterfeiting. Digital currency, unlike fiat money, is impossible to counterfeit.
- The ability to remain anonymous. There is no need to disclose your data during transactions.
What risks should be considered when buying digital money?
Buying any financial asset involves risks. Cryptocurrency is no exception. The risks that are most common to digital money are:
- A possible ban on the circulation of digital currencies in a particular state. Some countries do tighten laws on digital currencies. However, the risk of banning crypto is unlikely. On the contrary, the possibility of amending the law to allow Russian citizens to officially pay with cryptocurrencies for digital services is now being discussed.
- Difficulties with taxation. Individuals are obliged to calculate and declare the tax received from the profit from the sale of crypto. If this is not done, there is a chance to fall under administrative responsibility and receive a hefty fine. However, so far, fiscal authorities are trying to monitor only transactions of especially large size, and transactions with small amounts of cryptocurrency are of no interest to tax authorities.
- Loss of confidence in digital assets. Cryptocurrencies are relatively new, and at first only enthusiasts invested in them. Now serious investors have come to the cryptocurrency market, but they remain there as long as traders in general have confidence in Bitcoin and altcoins. If users stop believing in the success of cryptocurrencies, the coins could plummet in value.
- Problems with digital security and malicious hackers. Trading platforms and service providers are regularly subjected to hacking attempts. True, most hacking attacks fail. But if attackers manage to get their hands-on coins, users lose serious money. And the losses affect all investors. For example, in 2016 there was a major theft of Bitcoins (they were stolen for more than $70 million). Immediately after the hack, BTC fell by more than 20%, followed by altcoins.
Basic investment methods
For newcomers, there are many options on how to invest in cryptocurrency. The most obvious method we’ve already mentioned is speculative trading on the price difference. The value of Bitcoin, Ethereum, Litecoin, and other cryptocurrencies changes every minute. Just like the value of fiat currencies, energy, securities, and other assets change. But cryptocurrencies are much more volatile because they are decentralized, they have no single regulating source, so any factor can affect the quotes.
Most often, cryptocurrencies are traded between themselves on exchanges. For example, Bitcoin to Ethereum (BTC/ETH) or Bitcoin to Teaser (BTC/USDT). But there are also pairs in which cryptocurrency and fiat are involved. Legitimately, the most popular such pair is Bitcoin to the U.S. dollar (BTC/USD). Here, the answer to the question of how to properly invest in cryptocurrency is conceptually simple. Because it is based on the same principles as when trading the normal currency on the exchange. That is, the trader uses methods of technical and fundamental analysis, to predict the market situation.
If you already have some amount of cryptocurrency, you can think about how to start investing passively. That is, make money not by trading the asset, but by investing it. One of the most popular options is staking. To put it simply, you provide your assets to the blockchain system to keep it running and in return, you get a fixed percentage of profit.
Going into detail, new blocks in the blockchain can be created not only by providing computing power (that’s classic mining). There is a method in which you don’t need computation to build new blocks, but rather coins you already have. It is called Proof of Stake (PoS). Based on it, the more coins you transfer, the greater will be your final reward.
CoinLoan is a reliable and simple ecosystem that contains several products and services: a cryptocurrency wallet, instant loans, an interesting account, and a crypto exchange. If you are looking for a reliable and secure service to store your assets. CoinLoan is exactly what you need.