In the 21st century when there are more than 20,268 total cryptocurrencies in circulation, it is perhaps one of the brightest investment scopes.
The rising demand and recognition of cryptocurrencies have evolved into a prospective cryptocurrency market with a total market cap of all cryptocurrencies of approximately around $1.025 trillion.
When you consider the estimated trading volume of the cryptocurrency market per 24 hours, which is now estimated to be approximately $107 billion, it is clear that many people are becoming increasingly interested in cryptocurrency trading.
Bitcoin, which is the most popular crypto token ever since holds the highest current market cap, which is mesmerizingly over $420 billion, and next to which is Ethereum.
However, even though the potentials revealed by these statistical records of the cryptocurrency market and trading reveal an immense profitable edge, cryptocurrency trading traded financial groups involves definite risk factors too.
While volatility, media relative, and unexpected movements market the cryptocurrency investment, experts like the Founder and CEO of CoinSwitch Kuber, Ashish Singhal, explain, “While investing in crypto, investors must adopt a long-term approach and they must not expect a quick return as the value of cryptocurrencies depends on market supply and demand.”
Therefore, to ease your doubts about crypto trading risks, here are a few quick and crisp pieces of advice on crypto trading and investment to secure risk loopholes.
Investment Approach – Loan or Savings
Since the cryptocurrency market is invincibly linked with its volatile nature, you can never predict 100% profit or loss.
Even though there are many factors that affect the market’s rise and fall, there is always a chance that you could lose everything if you invest all of your savings or even heavily borrow money in cryptocurrency trading.
According to market experts, with expertise in the cryptocurrency market and investment, one must invest only 5% of his savings into cryptocurrency initially.
Since the market movement fluctuates, it could always block your investment if the market suddenly drops.
Instead of incurring huge losses or financial risk, it is always wise to invest only an amount that would not mark or reflect any risk on your financial status.
Therein you could also say that it is ideal to invest only a buffer amount from your savings into cryptocurrency trading or investment.
Invest in Crypto Holdings
The risks of the cryptocurrency market often hold back many from directly investing in the market. Instead, one can invest in companies with cryptocurrency holdings.
These companies thereby act as a security bridge between your investment and crypto market volatility.
However, you need to pick your company wisely, as per the holding volume, the types of cryptocurrencies they have an investment in, the market movement of according to crypto tokens, their prospects, etc.
As an illustration, as of December 31, 2021, Tesla, one of the world’s top automakers, held a total of about $1.99 billion in bitcoin.
Therefore, a rise in the price of Bitcoin would automatically affect Tesla’s price as well.
Even though at present there are no cryptocurrency exchange-traded funds that have been directly approved or formed by the Securities and Exchange Commission, there is huge demand across the globe for ETFs.
According to cryptocurrency experts and analysts, cryptocurrency ETFs are on their way since in many countries Bitcoin ETFs already performing.
The head of strategy at FTX.US (which is a U.S.-regulated cryptocurrency exchange), Tristan Yver, finds the immense prospect of ETF in the US too.
Essential Advice On Crypto Investments
Simply because a newly launched cryptocurrency has a low price range within your affordability, does not mean that investing in it will offer you huge returns.
The market study, history of a token, price influences, etc. should be considered before investment.
To begin with cryptocurrency investment, you must first choose a platform that allows you to buy or sell cryptocurrencies.
Many platforms might hit your attention, however, there are a few factors in how you confirm whether you like this platform and if it is suitable for you.
Security, wallet management, trading learner tips, updated market study guidance, fee structure, user interface, P2P trading, etc. factors must be verified and studied before choosing any crypto trading platform.