2021’s crypto boom is a signpost that the markets are lucrative, but only if approached with a working strategy. Bitcoin, one of the largest cryptocurrencies by market cap, managed returns of about 60 percent.
A noteworthy fact is that the crypto market experienced colossal growth in 2021, cutting across all crypto coins. The growth is significant because of the unusual situation that plagued the markets. COVID-19 had a considerable influence on some poor trends registered on the stock markets all over the world because of strict lockdowns. You can short crypto here and take advantage of the bearish momentum that grips cryptocurrencies in receding markets.
Many top coins, which are not Bitcoin followed a similar path curved by Bitcoin in 2021 to post growths of over 11000 percent. Terra led the pack with astronomical figures that went over 12000 percent. A shocking fact is that Bitcoin was close to the bottom when pitted against top altcoins in terms of growth in 2021.
Is Crypto a Good Buy?
Crypto skeptics have frequently compared crypto investments to Ponzi schemes – a significant understatement, shrugged by the impressive performance of Bitcoin as seen in trading platforms like PrimeXBT.
Repeatedly, crypto investments have proved their value. Regardless of the redemption of knowing that the investments are safe; crypto trading is risky.
Crime reports involving cryptocurrency have become a norm. The recent heist involving Poly networks in 2021 is a significant pointer that the massive adoption of cryptocurrency, globally, is creating another unethical industry of crypto hackers.
Frauds and hacks related to cryptocurrency have increased by over 312 percent within five years. The crimes have alerted authorities everywhere to create new regulations touching on cryptocurrency.
Things to Consider Before Buying Bitcoin
One of the substantial turnoffs of owning crypto investments is their volatility. Crypto instruments gain or lose value quickly.
One notable example is the recent market retreat that wiped about 50 percent off the value of Bitcoin from a historic high of over $65K. According to PrimeXBT’s price chart, the largest crypto by market cap traded below $40K, for the first time in about two years, in the retreat.
However, as history has shown, Bitcoin and other cryptocurrencies often adjust to reach a new high in periodic bullish runs. Suggestions are rife that the coin might hit over $100K if it gains the right momentum. Also Read – Complete Guide to Crypto Asset Management
Individual Crypto wallets have fallen into the hands of fraudsters before, meaning that investments are not only in danger of a major market adjustment, but also thieves on the internet. Securing crypto involves using a secure exchange to hold the asset or a platform that offers two-factor authentication.
Many cryptocurrency networks present themselves as the most secure by flaunting the use of the blockchain to write, store and exchange digital instruments. The blockchain offers security, but does not hide what takes place there entirely. Organizations with massive resources can dig deep into the public blockchain and see transactions from one trader to the other.
When Is the Right Time to Buy Cryptocurrency
Markets have diverse crypto instruments on offer, especially when trading in PrimeXBT. In the case of Bitcoin, when it is peaking and showing signs of a bullish run, it is crucial to take a position early. Entering a full swing mode maximizes returns when the asset hits a peak.
When starting, it is important to understand how the markets work before diving into any runs, it could be a trap. The most basic trading strategy to consider is the buy and hold. It requires no skills, but a lot of confidence. Whenever digital assets rise in value, an investor, holding a sizable amount, sells for profits. On the other hand, when assets diminish in value, it is time to buy. However, only buy when sure of a bullish situation in the future.
Crypto as an Opportunity
Crypto instruments are here with us, they signify a redefined era of tradable instruments. Taking positions such as the increased buy and hold is what brings returns in held crypto investments. It is imperative to have a working approach before diving deep into a trading position.