Cryptocurrencies have had a long and extensive history. It feels like they have been around for just as long as their centralized counterparts.
However, Bitcoin was first invented in 2009 by anonymous cryptographer Satoshi Nakamoto. The true identity of Nakamoto is still unknown. Some people have speculated it is one person, while some analysts believe it is a group of people due to its complex and brilliant design.
What is Bitcoin and blockchain technology?
Bitcoin is the underlying asset that relies on blockchain technology to facilitate decentralized and direct peer-to-peer transfers. It removes the need for a bank to oversee the transaction for security purposes. The blockchain is an innovative public ledger that cannot be amended, so the transactions are fully verified.
The evolution of cryptocurrencY
You can now use cryptocurrencies as legal tender. You can use them in various shops and businesses in countries such as El Salvador.
You can use cryptocurrency to gamble too. There are Bitcoin (BTC) and Ethereum (ETH) casinos. Some of the best ETH casinos are just as engaging as their traditional competitors. Crypto casinos use a similar method of direct wallet connection to ensure you can gamble as securely and efficiently as possible.
Cryptocurrency has evolved from inhabiting the obscure corners of the internet and emerged as a multitrillion-dollar asset. It has seismically impacted the financial industry and popular culture, and many people are looking to invest in digital assets.
Is it too late to invest in cryptocurrency?
Although it has been over a decade since the creation of Bitcoin, and there have been multiple bull runs since the early 2010s, the most recent of which was in 2021, many believe the biggest bull run is yet to come.
Following a turbulent 2022, widely considered the worst year for cryptocurrency investment, many investors moved their money out of the sector. However, many professional investors often say a market dip is the best time to buy. The market hasn’t dipped heavier than it has over the past 12 months.
Some people made millions by getting themselves positioned at an excellent place in the market before cryptocurrencies took off. This includes the investors who paid 10,000 Bitcoin for two pizzas in 2010. This amount would have been worth over $600m last year.
Buying the top is never a good idea. This is one of the main reasons that trading on emotion is a bad idea. It doesn’t just apply to negative emotions, such as revenge trading. It also includes getting caught up in the hype and buying an asset that has increased 90% over a few weeks.
It is always best to investigate the factors causing a fall to ensure that you aren’t blindly “buying the dip” and to determine what is causing the price to drop dramatically.
For instance, current economic policies in the West and other key economic factors such as inflation and the talks of a recession have rocked consumer confidence. Often, these issues must be resolved before another bull run is “cleared for takeoff”.
External factors such as the war in Ukraine impact the economy, which drives down the amount of money people have available to invest. From a cryptocurrency market perspective, this can cause the price to stagnate and drop.
Understand the market
With any investment, you need to make sure you understand the asset. You can apply this mantra across the board, whether it is stocks, commodities such as silver, gold, steel and oil or forex.
If you don’t take the time to assess the market, how it works and the underlying factors that control the price, you are trading with a blindfold. If you have no theory behind your strategy and no education behind your first move, then you’re not investing; you are gambling.
These are simple things to note if you haven’t invested in digital assets. Firstly, spend as much time as necessary to ensure you understand cryptocurrencies.
Some analysts believe the market is due for a retraction because of the aggressive policies of the SEC in the United States. On the other hand, some analysts believe a new bull run could emerge due to China printing vast amounts of new currency.
Ultimately, nobody has a crystal ball. Even if you research cryptocurrency properly and feel like you’re buying at a reasonable price, your strategy should be specialized for your risk appetite and amount of capital. It’s not too late to invest in cryptocurrency, but you must be aware that it is the most volatile asset on the market today. Your capital is always at risk.