Can Crypto Really Make You Rich?
This article discusses the current cryptocurrency market trends, shedding light into the risks and gains of investing in crypto wallets. Later, the article explains some basic strategies for a potential crypto investor offering choices and tips to choose whether to invest or not.
Someone keeping track of the cryptocurrency markets will agree that however volatile the coins seem, it is an excellent long term investment to build a crypto wallet. No doubt the cryptocurrency market, especially Bitcoins and Ethereum, have attracted major investors and analysts, but is it a good idea to bank on the digital currency even when it is being freshly banned in most of the parts of the world? The answer cannot be expressed as right or wrong. Like the two faces of a coin, cryptocurrencies also have a similar tendency, and one needs knowledge, strategy and patience to invest in the booming crypto market.
The current cryptocurrency market trends
Bitcoins had been ruling the arena for a long time when Ethereum took over, registering a whopping all-time high at $4,357. Owing to investors’ optimism regarding proof-of-stake transition, the increase in layer-two scaling solutions for its network and rising usage patterns of Defi, Ethereum had appreciated by 895 per cent in 2020 and 210 per cent by June 30, 2021. The total trading volume of ETH was $1.4 trillion by June 30, 2021, with a tremendous growth and an upward trend of 1,461% in comparison to $92 billion during the first six months of 2020.
In comparison, the largest cryptocurrency, Bitcoin, witnessed a trading of 38.8 per cent, which is down from its groundbreaking $65,899 in the month of April. The figures might appear scary, but the insights gained through crypto trading proves that the virtual currency is definitely worth the investment. What the figures also tell us is that investing in cryptocurrencies sounds potentially very lucrative – especially when you know the proper timings to trade, i.e., when the global markets are in a rush hour, which is past midnight in the Eastern Hemisphere. Had you invested $1,000 in Bitcoins a decade back, you’d become a millionaire this year with a total of $15 million in your crypto wallet this year. So who actually knows what to invest, when to invest, and is it really possible that every cryptocurrency investor can become a millionaire? And which crypto will make you rich? Let us find out in the next section.
The concept of risk and reward
Once you start investing in the cryptocurrency market, chances are you will get caught up in its monumental profits. Let’s see a market scenario – the largest cryptocurrency, Bitcoin, has surged about 372 per cent, the second largest Ethereum is up by 1500 per cent, followed closely by Dogecoin at 19,000 per cent. So the gains paint a rosy picture, and any layman would simply conclude that it is hard not to get rich once you start crypto trading. However, as experts put it – past returns don’t always mean future profits. Also, with pending legalizations and outright bans in several parts of the world, cryptocurrencies remain a high-risk investment.
On the one hand, crypto prices can keep soaring, whereas, on the other, they could plummet just as quickly. Ethereum’s trading volume superseding the Bitcoin market is the latest example of just how volatile cryptocurrencies can be. So what’s the solution?
Nothing but knowledge, strategy and patience.
Many tout cryptocurrency as a turbulent market environment making it a speculative choice, while experts say it is really unthinkable what the future holds for cryptocurrency. While an ongoing crackdown on crypto traders in China, countries like Kazakhstan are already launching pilot projects to assess the possibilities of a cryptocurrency enabled economy. Similarly, the metaverse is attracting substantial corporate interest. If the project succeeds, one could become a billionaire in 5 years, and if the market crashes, you could lose everything. So who knows what tomorrow holds?
To invest or not to?
Whatever the market figures and facts suggest, it is hard to ignore the allure of cryptocurrency. It’s a relatively new thing but has massive potential to replace the traditional fiat currency. Otherwise, why would Amazon announce a job listing of “Digital Currency and Blockchain Product Lead”, clarifying that the e-commerce giant is expanding operations to explore digital wallets and how these “could look like for customers shopping on Amazon.”
With 9000 crypto coins currently available in the crypto-verse, it is predicted that cryptocurrency prices will continue in an upward trajectory, and one must invest in it. However, before investing in the crypto market, you must understand these things:
- Understand crypto’s global trading timings
- Know where you are investing your money on
- Develop a considerable level of high-risk tolerance
- Build extreme patience
- Invest the amount that you can afford losing
Finally, before you step into the crypto-verse, it is vital that your finances are in great shape and your portfolio is diversified so that in the event of an unexpected failure, you have enough savings to fall back upon.