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The global economy is experiencing one of the worst recessions since the Great Depression. Due to the effects of COVID-19, financial markets are crashing, businesses across all industries are closing, and traditional investments are taking a huge hit. As an investor, the past few months may have been tough on your portfolio, and you may currently be looking for new ways to grow your money.
In light of the world’s current situation, cryptocurrencies are in the spotlight once again. With the world shifting towards cashless transactions, the environment caused by the pandemic is giving digital currencies a chance to shine. Many ambitious investors are wondering if now is the perfect time to start their crypto venture.
If you’re planning to enter this field, it will help you to be informed of what the industry’s state will look like after the pandemic blows over. Before you start searching for trading platforms and reading about the latest Bitcoin SV news, let’s take a look at four big trends that currently surround the crypto market.
1. Coin prices have dropped
High-risk assets significantly dropped when COVID-19 was officially labeled as a pandemic. Stocks prices have plummeted, real estate properties took a huge hit, and initial coin offerings have gone down.
While established currencies such as Bitcoin were able to recover the losses, lesser-known coin projects were forced to stop completely. But, the good news is, traders have executed projects that have been able to mitigate the impact of the pandemic.
Considering the impact of the virus and the current prices of coins, it’s normal for new investors to feel hesitant. It’s no secret that the crypto market is extremely volatile, and the success of your investment will significantly depend on your skill as a trader, and a bit of luck.
You may purchase a coin for US$11,000, but its price may suddenly double or be cut in half, depending on how the market performs. Since there’s no absolute way to predict crypto’s value over time, starting your venture will require you to have a high-risk appetite.
2. More crypto projects are entering the picture
Since its birth in the late 2000s, Bitcoin has paved the way for crypto to be an active trading ground for investors. Despite the crashes, it’s important to know that more crypto projects are being introduced. As of today, there are over 50 million blockchain wallet users globally, and this is an indication of high market activity.
While the performance of each currency may vary, these numbers show that the industry is consistently attaining growth. Despite facing a global pandemic, there are over 6,088 cryptocurrencies available, with the number expected to rise in the years to come. This provides new opportunities for investors though it’s best to remain cautious as you take your first steps.
Over a thousand crypto projects have failed in the past few years due to various reasons. Some companies became too lenient with their security and ended up on the wrong side of a cyber attack, while others mismanaged their resources and were unable to maintain a good image in the market.
If you’re planning to invest in an inexpensive coin, remember that the cryptocurrency market isn’t regulated. In case the company you’ve chosen goes south, they could suddenly leave without a trace, so it’s best to go for more established providers. While this may not assure you of a profit, its stability should give you some form of security.
3. Shifting towards an online environment
Social distancing remains the best preventive measure against the virus. Since a vaccine is still under development, businesses have been forced to adopt a remote working setup and switch up their services. The shift from physical to online encounters has paved the way for countless innovations, and this has given coin providers and traders a chance to thrive.
Unlike companies that work in manufacturing and the like, crypto and blockchain organizations are digital by nature. In addition, thanks to communication tools, most teams can work seamlessly even with the implementation of social distancing and relevant government policies.
With the world heading towards a new normal, crypto and blockchain’s value is becoming more evident than before. Considering how digital transactions are gaining transaction and how blockchain can optimize data collection and other processes, this new climate will provide opportunities for crypto to thrive even further.
4. Traditional investors have become more assertive
Financial crisis or not, crypto will continue to grow over time. While its extremely difficult to pinpoint what factors influence the market’s performance, its ability to mature makes it a very enticing investment. Since the value of stocks, bonds, and real estate properties have dropped, many traditional investors are currently on the lookout for non-conventional assets.
With traditional investments in danger and crypto once again in the picture, investors and institutions have become more aggressive and are starting to view it as a safe haven.
Is it the right time to invest in crypto?
The pandemic may be affecting most financial markets, but crypto’s relevance and value are starting to be seen. Even though there isn’t a definite answer as to whether you should invest in it or not, signs are pointing towards a bright future for the industry. If you plan to add the asset in your portfolio, you’ll need to refine your skills as a trader since this is still a high-risk venture.
The future of crypto may not be set in stone, but there are many positive takeaways. Given that digital currencies, such as Bitcoin and Ethereum, are meant to withstand this kind of crisis, the value of crypto is likely to rise in the future.
There are a number of digital currencies you can choose from, but keep in mind that finding the right coin to invest in will ultimately depend on you. As you browse through different crypto exchanges, reflect and take all the time you need to get the most out of your hard-earned money.