Is it the right time to invest in cryptocurrency?
Cryptocurrency enthusiasts have faced a rather rough week, with Bitcoin, Ethereum, and other cryptocurrencies dropping dramatically in value mid-week but regaining some ground towards the end of the week. Those who had already invested in cryptocurrency chose a strategy to HODL – hold on for dear life – while others chose to “buy the dips.” Bitcoin’s volatility is not for the faint of heart. From a peak of $64,829 a few weeks ago to a low of $30,201 this week, before climbing back to cross $41,000, the blockchain-based virtual currency has had a wild ride. However, that’s something the swing isn’t something that bothers those who seriously track the market.
It’s possible to get filthy rich by investing in cryptocurrency in 2021. But you could also lose all of your money. How can both be true? Investing in crypto assets is risky but also potentially extremely profitable.
Is crypto a good long-term investment?
Many cryptocurrencies like Bitcoin and Ether are launched with lofty objectives, which may be achieved over long time horizons. While the success of any cryptocurrency project is not assured, if a cryptocurrency project achieves its goals, then early investors in that cryptocurrency could be richly rewarded over the long term.
For any cryptocurrency project, achieving widespread adoption is necessary to be considered a long-term success.
Bitcoin as a long-term investment
Bitcoin, as the most widely known cryptocurrency, benefits from network effects — more people want to own Bitcoin because Bitcoin is owned by the most people. Bitcoin is currently viewed by many investors as “digital gold” but could also be used as a digital form of cash.
Investors in Bitcoin believe the cryptocurrency will gain value over the long term because the supply of Bitcoin is fixed, unlike the supplies of fiat currencies such as the U.S. dollar or the Japanese yen. The supply of Bitcoin is capped at just under 21 million coins, while central-bank-controlled currencies can be printed at the will of politicians. Many investors expect Bitcoin to gain value as fiat currencies depreciate.
Those who are bullish about Bitcoin being extensively used as digital cash believe that, over the long term, Bitcoin has the potential to become the first truly global currency.
Ethereum as a long-term investment
Ether is the native coin of the Ethereum platform and can be purchased by investors wishing to gain portfolio exposure to Ethereum. While Bitcoin can be viewed as digital gold, Ethereum is building a global computing platform that supports many other cryptocurrencies and a massive ecosystem of decentralized applications (“dapps”).
The large number of cryptocurrencies built on the Ethereum platform, combined with the open-source nature of dapps, create opportunities for Ethereum to also benefit from network effects and to create sustainable, long-term value. The Ethereum platform enables the use of “smart contracts,” which execute automatically based on terms written directly into the contracts’ code.
The Ethereum network collects Ether from users in exchange for executing smart contracts. Smart contract technology has significant potential to disrupt massive industries, such as real estate and banking, and also to create entirely new markets.
As the Ethereum platform becomes increasingly used worldwide, the Ether token increases in utility and value. Investors bullish on the long-term potential of the Ethereum platform can profit directly by owning Ether.
Is Binance coin a good investment?
Most likely it is safe to invest in Binance Coin, though there are several things you should be aware of before investing. As mentioned earlier, Binance Coin is considered a relatively safe coin. Historically, it has been less volatile than other altcoins, maintaining a lot of its gains.
To sign up for an investment account and invest in BTC, ETH , and BNB visit the Binance website.