Cryptocurrency Market: Future Investment Opportunities and Risks
Updated: Feb 17
What is Cryptocurrency?
Cryptocurrency is a digitally created cryptocurrency that is not overseen by a central authority. Bitcoin is the most popular type of cryptocurrency, but there are also many different types of cryptocurrencies such as Ethereum, Ripple, Litecoin. Cryptocurrencies are operated with blockchain technology and allow peer-to-peer transactions between users.
History of Cryptocurrency
The history of cryptocurrency begins with an article published in 2008 by an anonymous author, Satoshi Nakamoto. In the article, a crypto money system called Bitcoin is introduced. In 2009, the first Bitcoin software was released by Satoshi Nakamoto and the first Bitcoin transactions were made.
In 2010, the first Bitcoin wallets were released and Bitcoin miners agreed on transaction fees. In 2011, the first alternative cryptocurrencies Namecoin and Litecoin were launched. In 2013, Bitcoin price reached $1,000 for the first time.
In 2014, disclosures about cryptocurrencies by various governments and financial institutions increased, and in 2015, Ethereum, Ripple and many other alternative cryptocurrencies were launched. In 2016, the use and popularity of cryptocurrencies skyrocketed, and in 2017, the price of Bitcoin reached $20,000. In 2018, the prices of cryptocurrencies generally fell, but they are still followed with interest by many people and institutions.
Advantages of Cryptocurrencies
Cryptocurrencies have many advantages:
Decentralized: Cryptocurrencies are not regulated and managed by a central authority, so they are more secure and durable.
Anonymitet: Cryptocurrencies allow users to hide their true identities and therefore provide privacy and security.
Fast and Remote Transactions: Cryptocurrencies can perform faster and remote transactions than other currencies.
Low Fees: Cryptocurrencies pay very low fees and therefore you can trade at more affordable prices than other currencies.
Flexibility: Cryptocurrencies can be used anywhere and traded at any time, as they are non-physical currencies.
Internet access: Cryptocurrencies can be used anywhere with internet access.
Blockchain technology: Cryptocurrencies use blockchain technology, which is secure, transparent, and tamper-proof, to keep a record of all transactions.
How does crypto rise or fall?
The prices of cryptocurrencies rise or fall based on many factors:
Supply and demand: The prices of cryptocurrencies can change according to supply and demand. If supply is low and demand is high, the price will rise. Likewise, if supply is high and demand is low, the price will fall.
Current News: Cryptocurrency prices are also affected by current news and events. For example, statements made by governments about cryptocurrencies or news that large institutions invest in cryptocurrencies can affect prices.
Regulation: The prices of cryptocurrencies are also affected by the regulations made by the governments. For example, governments ban or regulation of cryptocurrencies can affect prices.
Technological Developments: The prices of cryptocurrencies are also affected by technological developments and features. For example, as the features of a cryptocurrency increase, its price may also increase.
Market Sentiment: The prices of cryptocurrencies are also affected by the general weather or market sentiment in the market. For example, if there is a positive opinion about cryptocurrencies in general, prices may rise.
Market manipulation: The prices of cryptocurrencies can affect the prices in case of manipulation in the market.
Crypto investment guide for beginners
You can follow the steps below to start investing in cryptocurrencies:
Research about cryptocurrencies: You should have a basic knowledge of cryptocurrencies and understand how different cryptocurrencies work, what technologies they use and their future potential.
Watch the price movements of cryptocurrencies: You can look at different sources to monitor the price movements of cryptocurrencies. For example, sites like Coinmarketcap are a good resource for viewing prices, volume, and other information.
Choose a reliable wallet: You should choose a reliable wallet to store your cryptocurrencies. Wallet types such as cold wallet or hardware wallet may be more secure.
Build a portfolio: Cryptocurrency prices are always fluctuating. Therefore, you should create a portfolio when investing. This allows you to invest in different cryptocurrencies and reduces your risk.
Invest long term: There is a lot of speculation about cryptocurrencies. Therefore, you should prefer to invest for the long term. You may be at higher risk when making short-term investments.
Accept the risks: When investing in cryptocurrencies, remember that you may lose your invested money. Therefore, you should act knowing the risk you accept when investing.
How To Buy Cryptocurrency And How To Keep It Safe?
You can learn how to buy cryptocurrencies and keep them safe by following these steps:
Register with a crypto exchange: To buy cryptocurrencies, you must first register with a crypto exchange. Exchanges such as Binance, Coinbase, Kraken are among the popular options.
Complete the KYC(Know Your Customer) process: Most cryptocurrency exchanges use the KYC process to verify their customers' identities. In this process, you will need to provide information such as your name, address, and identification information.
Make a deposit: After registering with the cryptocurrency exchange, you can make a deposit. This is usually done via bank transfer, credit card or other electronic payment method.
Buy cryptocurrencies: To buy cryptocurrencies, after depositing money on the stock market, you can trade in the buy tab of the cryptocurrency you want.
Keep your cryptocurrencies safe: To keep your cryptocurrencies safe, you can use secure wallet options such as cold wallet or hardware wallet. These wallets allow you to store your cryptocurrencies without an internet connection. You should also save and keep secure information such as private keys or seed phrases of the cryptocurrencies you invest in.
Does cryptocurrency investment make sense?
Investing in cryptocurrencies can offer potential gains for investors, but it also involves high risks. Because the prices of cryptocurrencies are so volatile, there is also a risk of loss for investors when investing to make a profit. To invest in cryptocurrencies, you must carefully consider the risks and potential gains you accept when investing.
Investing long term involves less risk but investing short term involves higher risk. We recommend that you have previous knowledge and experience to invest in cryptocurrencies.
Crypto investment strategies
There are several different strategies you can use when investing in cryptocurrencies:
Long-term investing: Investing long-term is a good option to evaluate the future potential of cryptocurrencies. This strategy is unaffected by volatility in the price of cryptocurrencies, and investors expect long-term appreciation of cryptocurrencies.
Short-term trading: Short-term trading is a strategy used to take advantage of the price movements of cryptocurrencies. This strategy waits for the price of cryptocurrencies to rise or fall in the short term and takes advantage of these movements.
Diversification: Diversification is a strategy used to reduce the risks of investors. This strategy suggests investors invest in different cryptocurrencies and diversify their portfolios.
Cost averaging: Cost averaging is a strategy where investors are not affected by the fluctuation of the price of cryptocurrencies. This strategy recommends that investors invest in cryptocurrencies at regular intervals and reduce the impact of price fluctuations. This strategy suggests that traders regularly invest a certain amount in cryptocurrencies and buy more when prices are low. In this way, the average price is lower and investors get longer-term profits.
Hold and Wait: The Hold and Wait strategy recommends that investors keep and hold cryptocurrencies long-term. This strategy is a viable option to anticipate the future value of cryptocurrencies and recommends investors to store and hold their cryptocurrencies long-term.
Each investor's risk tolerance and goals are different, so you should choose the investment strategy that suits you best. In addition, you should always follow the current news and developments about cryptocurrencies and support your investment decisions with this information.
Crypto investment companies
There are many cryptocurrency investment companies available for investors who want to invest in cryptocurrencies. These companies allow investors to invest or trade cryptocurrencies. Among them, the most popular are:
Binance: Binance is a popular worldwide cryptocurrency exchange. Binance allows investors to buy, sell and trade cryptocurrencies.
Coinbase: Coinbase is an easy and secure cryptocurrency investment platform for investors. Coinbase allows investors to buy, sell and trade cryptocurrencies.
These companies are just a few examples, there are more available. Also, each company has different factors such as services, fees, ease of use and reliability. Therefore, it is recommended that you carefully examine the license, reliability, customer service and other factors of the company you are using when deciding which company to use when investing.
In addition, another point you should pay attention to when investing is the security of the cryptocurrencies you invest. Therefore, instead of storing the crypto money you invest in your wallet, it is recommended to use wallets such as cold wallet or hardware wallet, which are known as secure wallets.
In conclusion, cryptocurrencies are an investment vehicle that offers potential gains for investors but also involves high risks. When investing in cryptocurrencies, you should consider the risk of losing your invested money. Also, there are many different strategies you can use when investing.
Each investor's risk tolerance and goals are different, so you should choose the investment strategy that suits you best. Also, you should be careful about the security of the cryptocurrencies you invest in.