Crypto industry might have plummeted below $1 trillion in 2022 from a colossal $3 trillion in 2021, but there is a bright silver lining beyond the gray clouds. Several experts have already predicted that the crypto market is poised to rise up by as much as 5x by 2030. The recent back-to-back crash might have been a major setback but crypto does hold a strong potential ahead. Even the IMF has embraced the mighty prospects of the new-age digital asset industry. There have been lengthy speculations about whether to invest in crypto and the best way to invest in cryptocurrency, especially after the crash. However, if we trust the majority of expert predictions, the crypto investment seems to be a sound decision. Check out more at Multibank.io.
The post below sheds light on the major reasons to consider investment in cryptocurrency, followed by a brief on the best way to invest in cryptocurrency.
Crypto will rise further
Crypto is no longer a thing for only wild traders and geek investors. Rather, it’s fast entering the mainstream to the extent that even the IMF is increasingly stressing on drafting a regulatory framework for crypto. Over the last few years, crypto has shown exponential growth- at a scale even higher than the internet boom. In fact, one of the leading banks had famously claimed that crypto will replace fiat money by the coming 10 years. And we have already mentioned that the crypto market is expected to grow by an inspiring 5x in the coming years. All these factors instill the confidence that crypto investment will reap in excellent returns in the coming few years.
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If you are a seasoned trader, you might have already invested in bonds and stocks. How about adding another asset class to your overall investment portfolio? It will help to add more diversity in your investment portfolio, thereby amplifying your investment returns. Also, an additional investment would serve as a backup when other investment vehicles would enter a bearish phase.
Higher returns than traditional market
Let’s take the example of Dogecoin here, the #1 meme coin and also one among the top 10 cryptocurrencies. DOGE investors who had invested around $1,000 in the coin last year was able to earn around $15,000 by the second quarter of May, i.e. in less than 6 months! Bitcoin is moving around $20,000 as of August 2022. But, several experts and analysts are confident that BTC holds the potential to scale up to $100,000 by the final quarter of 2022.
This is the beauty of cryptocurrency investment. All trading markets go through ups and down but the scale of fluctuation is always too radical when it comes to crypto. Thus, crypto investments can propel astronomically higher returns in comparison to traditional trading markets.
Multiple trading options
The crypto trading market conveniently emulates the traditional trading market, thereby providing investors and traders with a variety of trading experiences. Thus, you can choose from a wide range of trading strategies, based on your investment and trading goals.
If you are aspiring to buy and hold crypto for rocketing returns in near future, you can take to long position trading and HODLing. On the other hand, if you don’t want to wait for long and want to go for small but quick profits, you can invest in short position trading. There are other trading options to try out as well, such as spot trading, forward trading, and so on.
Now, this point might not apply to all kinds of cryptocurrencies but certainly to the most popular blue chip coins.
Most of the cryptocurrencies come with a capped supply. Once the entire supply has been minted out, no one else can mint or generate these cryptos. Unlike fiat money, no national government would be able to mint up a cryptocurrency unless they develop their own crypto. Limited supply coupled with increasing demand serves as a fantastic inflation hedge, making crypto a safe investment deal for investors.
Passive income opportunities
This is certainly one of the most amazing aspects of putting your money in cryptocurrencies.
Crypto investment, especially long-term crypto investment, extends a grand passive income window through the process of staking. PoS blockchains deploy the process of staking for verifying new blocks and generating new coins. The process asks for crypto deposits from crypto holders and also offers new coins as staking rewards to the holders after the staking period. Also, you will get back the staked coins once the staking process is completed. So, staking helps you to make an additional stream for earning from the same coins that have been sitting idle in your HODL account.
But, as you can get from the discussion here, you need to invest in PoS coins if you have plans for staking ventures.
Another way to make passive income from crypto is through offering your idle coins for lending on crypto lending platforms. In return, you will enjoy a handy rate of interest from the lending platforms.
Tips for investing in cryptocurrency
We will wrap up the discussion with a list of expert tips on the best way to invest in cryptocurrency.
Choose the right exchange
The best way to invest in cryptocurrency is to proceed with a reliable exchange. Your chosen exchange should be backed by cutting-edge safety features like 2FA, insurance for lost funds, and cold wallet storage facility. Moreover, the exchange must be backed by an excellent reputation.
Invest what you can afford
This is another best way to invest in cryptocurrency.
Do not put in an enormous amount of money in crypto investment. You will only put the amount that won’t hamper your daily life, major experiences, and main life goals if you lose it. If you are starting out, invest just 2% of your investment capital. You can exceed it to 5% over time, once you start getting seasoned about the market.
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You should always make sure to diversify your investment portfolio if you are looking for tips on the best way to invest in cryptocurrency. Invest in at least one legacy coin, one stablecoin, and one meme coin.