Ever since Bitcoin and other cryptocurrencies became mainstream, they’ve always been controversial. The fans and enthusiasts hailed cryptocurrencies as market-disrupters and a worthy nemesis of fiat currencies. Hundreds and thousands of articles started appearing on how cryptocurrencies will change the global economy and make monetary transactions more private and fair.
Meanwhile, on the other side of the coin, financial analysts, veteran economists, and pundits demonized by cryptocurrencies as dangerous, and volatile creation have absolutely no monetary and intrinsic value like precious metals and fiat currencies. This is why Bitcoin and other cryptocurrencies have always made headlines and fodder for business talk shows.
But all that has changed.
On December 16, 2020, Bitcoin price hit a record of $20,000 for the first time. On January 3, 2021, its value rocketed above $34,000. Then on February 9, 2021, the price of one Bitcoin soared to a new record high of $48,000 after Elon Musk, the CEO and founder of electric-car maker Tesla, announced that it had Bitcoin worth $1.5 billion and will accept the cryptocurrency as payment for its vehicles.
On Sunday, February 21, the price of Bitcoin peaked to another record high at over $58,000. But, it was short-lived, and the price went south dramatically after two days to hovering over $44,000, which a loss of almost a quarter from Sunday’s rally. At the time of writing this article (March 9), the current price of Bitcoin stands at $54,396.
If you’re thinking of investing in Bitcoin or Ethereum but can find reliable and experienced traders—check out CEX.IO here. CEX.IO is one of the first cryptocurrency platforms to offer fiat-to-crypto transactions. And if you already invested in Bitcoin and searching for an online marketplace where buyers and sellers can exchange bitcoin, Paxful is an excellent choice.
So what’s behind Bitcoin’s meteoritic rise in a matter of few months? How are bitcoins made? Analysts’ pointed that the recent price fluctuations are because both institutional and private investors are investing in Bitcoin for hedging purposes that the coronavirus pandemic has sparked. Some experts also said the new US President Joe Biden’s administration’s $1.9 trillion stimulus package to counter COVID-19 could spur inflation in the US economy, which can exacerbate the looming recession.
Furthermore, Ethereum, the world’s second-most recognized and largest crypto by market value, also saw its price increase to record highs hovering above $1,838.26 at the time of writing (March 9).
Said that cryptocurrencies, including Bitcoin, are infamous for their volatility. Cryptocurrency investments have made some investors into millionaires very quickly, while some have suffered incredible losses. If you’re thinking of investing in Bitcoin and other cryptocurrencies, the question you should be asking is when the right time to do it.
See, if you purchased Bitcoin in December 2017, you’re most likely end up with a loss. But, if you’ve bought or started investing in January 2019, you’ve probably made or making considerable gains. So, when is the right time to purchase cryptocurrencies?
Which Are The Three Biggest Cryptocurrencies?
This is a no-brainer. Obviously, Bitcoin is still king and the best-known as well. The market capitalization of Bitcoin is worth $910 billion as of March 2. Taking second place is Ethereum, and the third spot belongs to Cardano. Ethereum and Cardano’s market capitalization stands at $179 billion and $39 billion, respectively, as of March 2.
Lesser known, smaller cryptocurrencies such as Litecoin, bitcoin cash, and EOS might appear tempting for investors, as with all digital currencies, these are volatile and speculative investments. Typically, smaller altcoins are more volatile than Bitcoin and Ethereum. If you’re still interested, invest around 5% or less of your money.
Speaking of Bitcoin, with a Bitcoin IRA, you get the chance to use your retirement savings to buy bitcoin. To know on how you can do it, check the full Bitcoin IRA review. And BlockFi has a good trading platform and exciting products that are available at very competitive rates. For more details, check BlockFi today!
Why Now Is the Best Time to Invest in Cryptocurrencies?
It’s been a decade that cryptocurrencies have been in circulation, yet people still doubt whether it is real money. Skipping that debate, let focus on the discussions about cryptos. Cryptocurrency advocates are speaking about how it will change the global economy as we know it. Cryptocurrencies have the potential of funding new global economies and eradicating poverty in the developing world by pushing their economies to 21st-century commerce. For instance, there are remote villages in Africa where there are no banks, but internet-enabled cell phones operate. Cryptocurrencies can become the medium for cash and loans to expanding businesses in those parts of Africa because you only need the internet to trade crypto.
Cryptocurrencies appeal is also high among those looking to circumvent the existing monetary-control systems. Unlike fiat currencies, regulators can’t closely monitor and control cryptocurrencies. You don’t have to deal with bureaucratic red tapes and fees while transferring funds across borders. Countries with weaker currencies will largely benefit from it. Let’s take, The Bahamas, for instance. The Caribbean island nation is testing its own digital currency, Sand Dollar. Sand Dollar is expected to provide people in remote areas with legit banking services and eradicate money laundering by overhauling its financial system.
That’s not all. Cryptocurrencies enthusiasts are going all in. Bitcoin is being used for down payments for homes, while others buy exotic cars and fine art with it. PayPal accepts Bitcoins now, and Fidelity’s Digital Assets is now offering cryptocurrency trading and other services to institutional investors.
How risky is investing in cryptocurrencies?
But there are several risks, and you should be aware of them.
First, cryptocurrency markets are infamously volatile and speculative. Bitcoin’s 70 percent market share may make it stable crypto for investing, but keep in mind that in 2019, the price of one Bitcoin tripled, soaring to almost $13,000 and eventually crashing down to about $7,000. Price fluctuations like that could bring investors and national economies as a whole to the verge of destruction.
Second, cryptocurrencies are widespread with scandals. In 2014, hackers stole crypto coins worth $450 million from Mt. Gox, a cryptocurrency exchange in Tokyo, Japan. Then there is this famous one. Gerald Cotten, the founder of QuadrigaCX. His unexpected death in 2018 results in the loss of the passwords for his clients’ assets, worth as much as $250 million. Add to that ordeal; Quadriga didn’t even maintain basic accounting records. To recover their assets, investors demand to exhume Cotten’s body to prove his demise.
And lastly, social media companies are jumping on the cryptocurrency bandwagon. Facebook CEO Mark Zuckerberg once proposed that the company will roll out a digital currency that Facebook would control. Allowing tech CEOs to control our money should raise hairs on our arms because they have talent, technology, networks, and knowledge to do so. Tech companies controlling our personal information is terrifying enough, and allowing them to become financial-service providers and having all our financial data is even more terrifying.
Bitcoin, Ethereum, and other cryptocurrencies are “high-risk” investments. Cryptocurrencies prices are volatile; some are scams, some can disappear without notice, while others can be quite resilient and increase value and bring gains to investors.
To get the latest news, updates, and broker reviews in the cryptocurrency space, visit BrokerChoices.com.