Investing in cryptocurrency: yes or no

Capital investments: the world has already realized that cryptocurrencies are the future, so to speak, and the next evolutionary step of cash. For example, Tesla has invested $1.5 billion in Bitcoins, and Grayscale holds the largest Bitcoin package, valued at $7.4 billion. If you looked at the growth rates of the most popular cryptocurrencies over the past year, you might ask yourself: Can I start investing in cryptocurrencies now?

Reasons for the growth of cryptocurrencies

The 2020 events have once again shown that there is nothing permanent in the world. This statement is also true for the financial markets. A year earlier, investors were scratching their heads. Hardly any asset position existed that they could safely invest in. Even gold, which had always been considered by investors as something permanent, crashed. The shares of some companies increased unnecessarily and became bubbles. At that moment, investors turned to cryptocurrency as an asset class that has little correlation with other assets.

As of January 2020, bitcoin was at 7.400 $ and rose to 64 by April 2021.000 $. Investors recognized the rise of cryptocurrency exchanges and considered them as risk hedges and profitable investments in the medium to long term. Large corporate and venture capital investors considered bitcoin a protective asset that keeps capital from losing value in times of crisis.

How to find your grail among cryptocurrencies

To find your promising crypto asset after this overview of cryptocurrencies, you should closely follow what's happening in the cryptocurrency world and learn how to correctly interpret local developments. Blogs by experts in the field, opinions of opinion leaders, channels with detailed analysis of interesting new crypto projects are helpful here. Remember that the biggest threat to investors is cryptocurrency bubbles fueled by hype.

To spot them, you need to be able to recognize the signs of a HYIP bubble. The first of these is a constant stream of commercials. This includes various references on social networks, discussions by "experts" of unknown origin and various media personalities. The second reason is the irrepressible desire of the public to participate in the hype.

Is it worth investing in cryptocurrencies

If you have asked yourself this question, you already know what cryptocurrencies are and if you are about to buy bitcoin in Germany, the clear answer is: yes, you should. Although cryptocurrencies still carry a high level of risk, with a little knowledge you can make profits quite quickly. Those who invest in cryptocurrencies for the long term will also see excellent results. Experts predict that this year bitcoin will break the 100.000 dollar mark will be reached.

Looking at the speed at which major cryptocurrencies are crossing new borders, it looks like reaching the mark is just a matter of time. The current market situation is only good for investors. You have a chance to get into the market without buying bitcoin for 60.Buy $000 or more of cryptocurrency – for those interested, now is the time to invest in digital gold.

NFT Popularity

NFT (Non-Fungible Token) is an irreplaceable digitally protected object. It is based on a stored string of characters that cannot be replaced or copied. (Source:Wikipedia)

Many people in Germany have not heard of NFT tokens, but a number of NFT transactions involving huge amounts of money have made it into the news. There were digital items, tweets and many other things without a physical appearance. The most record-breaking deal was Beeple selling a collage of its digital paintings for $69 million.

But what is the technology itself without the hype? Right now, the popularity of the NFT market is provided by an influx of enthusiasts who tie their digital paintings to NFT tokens and believe they can sell them for thousands and millions of dollars, but in the future, NFT technology could facilitate the transfer of copyrights and simplify the real estate acquisition process. This prospect makes NFT technology a real boon for investors.

Advice for young investors

There are no fixed sizes and therefore investors should proceed with caution. Even the most seemingly sound investment may not yield a profit in the long run. And one bad investment can bring unexpectedly good results. Everything depends on the news value – a single event, even a single word, can influence the movement of complex financial mechanisms.

You must first determine your own risk tolerance, as this is the indicator you should rely on when choosing an investment strategy and building a portfolio. You should never commit to just one direction. It is better to spread your energy across multiple investment opportunities and, if necessary, shift your energy and capital from one to another.

You should approach investing with a cool head and be able to distinguish artificially inflated hype from promising projects and startups that can later develop into something bigger. It's important to remember that no matter how reliable the predictions and commentary of the smartest experts may seem, the decision is yours and consequently you are solely responsible for everything that happens with your investments.