Should you consider cryptocurrency as an investment? The crypto market has been on fire in the last few years. The first cryptocurrency ever invented, Bitcoin has grown from a market cap of just $18 million in 2014 to over $1 trillion. This explosive growth increased media coverage and investor interest in other cryptocurrencies.
The potential upsides of this new segment of the financial markets are exciting. Buy the right cryptocurrency at the right time. It can be a great way to build a portfolio insulated from inflation and stable even in a recession – something that no traditional investment offers today.
However, significant risks are also involved when investing in digital assets, not just Bitcoin. Newer coins like Tron and EOS have plunged almost 90% from their ATH after launching with little more than a white paper and some buzzword-filled websites to back them up.
Even if you believe blockchain technology will have widespread applications in the future, there’s no denying this is still a fledgling arena full of risk and volatility — especially for an inexperienced investor.
Investing in cryptocurrencies might not be for everyone, but it can be a lucrative venture if you know where to invest and which crypto assets are worth your while. In this post, we’ll discuss everything you need to know about investing in cryptocurrency and top cryptocurrency picks for 2022. Keep reading!
The Good, Bad and Ugly of Crypto Investment
When you invest in a stock or a bond, you buy a tiny sliver of ownership in a particular company or government entity. When you invest in gold, you’re purchasing a commodity that people have used as a store of value for thousands of years.
On the other hand, cryptocurrencies are mostly untethered to any underlying asset and only exist as computer code — a series of ones and zeroes stored on a blockchain network. Investors can buy or sell cryptocurrency from the crypto exchanges and maintain it in a digital wallet.
The good: Cryptocurrencies are digital or virtual tokens that use cryptography to secure their transactions and to control the creation of new units. This allows them to operate outside traditional financial systems without needing a central authority.
The bad: Cryptocurrencies are highly volatile and can be challenging to trade, leading to losses. They also have limited adoption, meaning a limited number of people can use them, and any government or institution does not back them.
The ugly: Cryptocurrencies are often used for illegal activities such as money laundering and fraud, which could lead to their demise.
Even though the market cap of all cryptocurrencies is $1.09 trillion in today’s time, many don’t consider Crypto a good investment.
You can’t store them in your bank account or physically hold them in your hand like gold bars.
Any government or central authority doesn’t back them.
You don’t even have any ownership rights to them. All you’re doing when you invest in cryptocurrencies is buying a piece of a particular network and hoping that other people use that network.
That’s what makes people think cryptocurrency is such a risky investment.
If you buy Bitcoin, you’re only buying a piece of a specific blockchain network. You’re hoping the network survives, thrives, and becomes widely adopted by others. There’s nothing wrong with that; it’s good to be optimistic! But you should be aware of the risk.
Deciding to Invest in Cryptocurrency
Investing in bitcoin, ether, and other popular altcoins belonging to such a volatile asset class might make you wonder if the investment is worth it.
Here are reasons why people stay and why they do. The first and most important question before you invest in cryptocurrency is: Do you believe in blockchain technology?
Blockchain is the underlying technology that powers all cryptocurrencies. It’s a decentralized ledger, meaning there’s no one central server where information is stored. It’s like a giant network of servers that collectively keeps track of everything happening.
Unlike a centralized system, if one computer (or server) goes out of commission, the rest of the network remains unaffected.
In theory, this makes blockchain technology extremely secure, tamper-proof, and transparent — all great traits for a valuable technology to store and transfer millions of people’s money around the globe!
If you find Cryptocurrency risky, You should probably avoid
If you want to invest in cryptocurrency, you can’t go wrong with Bitcoin. But, you might want to think again about the Risks associated with Bitcoin.
Bitcoin is an excellent investment in theory but comes with some significant risks. First, no one knows what the future holds for cryptocurrencies.
This technology is new, and the government can implement strict regulations around its usage. The implication of high taxation from the government can make it even harder for people with low investments.
As more people start using cryptocurrencies, it becomes harder for the government to regulate them. In other words, if you invest in Bitcoin and expect it to skyrocket in value, there’s always the risk that governments might crack down on cryptocurrencies.
Why invest in Cryptocurrency
- Speculative Investment
- Inflation hedge investment
- Decentralized banking
- Due to future technology and infrastructure
- Crypto to earn passive Income
- Low-cost and fast transactions
- Secure storage
- Limited supply
Uses of cryptocurrency
- Cryptocurrency can be used as a form of payment for goods and services.
- Cryptocurrency can be used to buy assets such as real estate, stocks, and bonds.
- Cryptocurrency can be used as a way to store value.
- Cryptocurrency can help reduce the risk of financial theft.
- With the existence of Cryptocurrency ATMs, converting fiat currency has become easier. You just need a private key to access your digital money.
4 Top Crypto Investments to consider in 2022
We have tried to see cryptocurrency from different angles to gauge if investing in digital currency can add value to your portfolio or if it can be worthless in no time.
However, big players in the cryptocurrency market are investing a lot of money, and it seems to rise in the coming years.
Always analyze the risk and your Investor profile before you put any money in digital currencies.
Here are the top 4 crypto investments to consider in 2022 that crypto giants are buying.
Market cap: 437.97 billion US dollars
Current price: 23,262 US dollars as of August 05 2022.
For obvious reasons, Bitcoin is the first choice of every crypto investor.
In addition to stocks and bonds, Bitcoin is frequently used as a diversification tool when investing in the U.S. You may also use it to make purchases.
Microsoft, PayPal, and Whole Foods are among the companies that accept Bitcoin. Using a service that allows you to link a debit card to your crypto account, you may use Bitcoin like a credit card.
This process generally involves a financial company instantly converting your Bitcoin into dollars. Using cryptocurrency in countries with less stable currencies is common.
Market cap: 32.76 billion U.S. dollars
Current price: 1,725 US dollars as of August 05 2022.
An application code, known as a smart contract, is securely executed and verified on the Ethereum peer-to-peer network. Without a central trusted authority, Ethereum allows participants to engage in transactions.
Because records are immutably verifiable and securely distributed across the network, participants are given complete ownership and visibility into transaction data.
Ethereum’s native Solidity scripting language and Ethereum Virtual Machine provide a very flexible platform for building decentralized applications. Due to the protocol’s maturity, developers using Ethereum can benefit from the rich developer toolkit and established standards.
Since Ethereum has a large user base, developers are encouraged to deploy their applications on the network, reinforcing Ethereum as the primary home for decentralized applications like DeFi and NFTs.
Market cap: 14.01 billion U.S. dollar
Current price: 40.44 US dollars as of August 05 2022.
Solana is an open-source project that builds on a layer-1 blockchain to deliver a permissionless and high-speed blockchain. Anatoly Yakovenko, a former executive at Qualcomm, conceived Solana in 2017.
Solana aims to make blockchains able to process more transactions at a lower cost than those currently in use.
The Solana cryptocurrency is named SOL. It is Solana’s native and utility token that provides security for the blockchain as well as a method of transferring value. SOL was created in March 2020 and aims to become one of the top 10 cryptocurrencies in the space with a total market capitalization.
4. IBAT (Battle Infinity):
Currency: IBAT token
Market cap: 850,000 US dollars based on BNB(appx)
Current price: On presale – The IBAT presale price is $0.0015 until early October 2022 – with a hard cap of 16,500 BNB.
Battle Infinity is the latest addition to the family of NFT (Non-Fungible Tokens) cryptocurrency games that seek to reinvent the type of mobile NFT games.
Battle Infinity is a blockchain game that provides users access to various virtual cricket, football, rugby, and basketball games.
In addition to being a platform, Battle Infinity has six products within its ecosystem that it plans to launch in the future, including Battle Swap, Battle Market, Battle Games, Battle Arena, Battle Stake, and IBAT Premier League.
On July 11, 2022, IBAT was opened for presale for $0.0015 per token. It may be an intelligent decision to invest in Battle Infinity if users believe the company has long-term growth potential.
Cryptocurrency is a precarious investment, but it can be gratifying if you do your research and choose the right coin.
However, the risk exists in every investment you make. The only thing is that people are more sceptical about cryptocurrency due to its lack of physical presence, which is purely virtual.
Also, most of us get intimidated by the technology the crypto is based on. But in my opinion, the world is inevitably ever-changing, and so is technology. We must be on top of it to grab the pie. Educating ourselves with time is the only key to being the game.
What do you think? Do let me know your thoughts in the comment box below.