Cryptocurrencies are gradually rising the rank in financial markets, and enthusiasts—retail and institutional— are investing huge sums while still on the lookout for more crypto assets they can trust their money with. As with every investment, making a profit depends largely on timing, and it’s a good thing to wonder if buying crypto right now is too late. This short piece explains why that couldn’t be further from the truth.
Cryptocurrencies came into the limelight after Satoshi Nakamoto’s timely solution to the double-spend problem, opening traditional finance to a new form of digital money. This idea essentially birthed Bitcoin and thousands of other cryptocurrencies at the time, with many developers claiming to improve on the code-base and introducing more utility. Now, the crypto space is taking giant leaps not only in terms of adoption, but we are also now seeing more utility thanks to the underpinning tech. Cryptocurrencies have come a long way from an array of decentralized financial services to a new form of digital ownership.
Bitcoin hitting a trillion-dollar market capitalization might have created that mental limit in the minds of many investors, considering that very few traditional assets have ever attained the $1 trillion milestones. Here are three reasons to let go of those assumptions.
1. Deflationary Model
Most cryptocurrencies have a capped supply. High demand for fixed limit products causes prices to shoot up. Bitcoin, for example, has a total supply of 21 million units, and considering that 20% of that is inaccessible, it is clear that we’re in a race against a scarce asset. Surprisingly, those with seemingly unlimited supply have started incorporating ways to make their tokens deflationary. One of such ways is to permanently remove some tokens from circulation to create scarcity, a term known as burning.
2. Huge Institutional buy-in
The crypto market has been booming, and several institutions have been grateful participants. The past year has witnessed big companies like PayPal, Square, Tesla investing heavily in cryptocurrencies. As the market evolves, other big institutions will find ways to incorporate crypto in their dealings.
3. Cryptocurrency Regulations
The lingering conversations about regulations in the crypto space will likely yield some positive results soon. Although the market prides itself on being decentralized, the current unregulated structure has riddled the space with lots of scams, making it very appealing to cybercriminals. Lawmakers worldwide are now exploring ways to possibly establish guidelines in the market to protect investors as much as possible.
Among the thousands of cryptocurrencies available in the market, here are some that are worth looking at:
Bitcoin has established itself as a viable asset class and a worthwhile store of value for the long term. Despite short-term price fluxes, Bitcoin has seen a consistent rise over the years, and it’s worth considering.
Ethereum is the second biggest cryptocurrency by market capitalization, and it’s not hard to see why. Founded by Vitalik just over six years ago, Ethereum introduced more utility to the crypto space, opening users to a world of decentralized finance (DeFi).
Not many blockchains have been able to make a compelling case against Ethereum as much as Solana has. It can validate more transactions with cheaper gas fees. It has rewarded early buyers with over 10,000% returns, but with a market cap of less than $60 billion compared to Ethereum’s $469 billion, there’s still much room for growth.
Very few protocols have been able to master the tripartite arms of blockchain as Algorand has. Very often, scalability is often sacrificed to achieve security and decentralization. Still, Algorand has positioned itself as a viable proof-of-stake network where DApps and other protocols can be built. With a market cap of less than $20 billion, Algorand is one of those must-have tokens.
The crypto market isn’t just a double faceted market where prices are either shooting up or spiraling down. You can invest in stablecoins— crypto assets with stable prices—to earn yields. YouHodler, for instance, offers as high as 12% on some stablecoins.
As with every other revolutionary invention, there are always speculations about long-term sustainability. While cryptocurrencies might be debatable, their rise isn’t. And considering the endless innovations we keep seeing every day, it’s not hard seeing that we still have a long way to go.
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