Created in 1998, cryptocurrency really gained momentum with the spread of Bitcoin in 2009. The phenomenon exploded between 2011 and 2017, increasing the number of cryptocurrencies for financial experts and curious alike. Since the beginning of the 2010s (as it seems far away…), the word “cryptocurrency” has arrived in the frozen, not to say congested, world of “finance” (in the very broad sense at the time – and not only ).
Among the promising cryptocurrencies are Bitcoin, Ethereum, Dogecoin and Ripple. These currencies are always attractive on the market and investing in these crypto-currencies is always possible if we follow the evolution of its value.
In 2020, market fluctuations are inviting others to turn to a more stable virtual currency. Is it still possible to invest in cryptocurrency in 2022? A train ride of emotions: While we have experienced everything that our emotional world allows in the past year, we hope for a little more stability and less volatility in 2022. Is that feasible? You can never be sure of the best coins in 2022, but we see great potential.
What is cryptocurrency?
In 2009, a man named “Satoshi Nakamoto” created Bitcoin . The mysterious character, whose identity is still unknown, had just laid the foundations of cryptocurrency: a fully digital currency, and decentralized.
Over time, cryptocurrency has become both a currency and an investment opportunity. It is also a way to convert a currency in a completely digital way and without going through banks or traditional institutions.
Faced with the economic crises experienced by many countries around the world, crypto also appears as an alternative to traditional currencies. In Greece, Bitcoin has been a resounding success with the people.
The advantages of cryptocurrency
Cryptocurrency offers several advantages over traditional currencies , wire transfers, and even the banking system. Here are a few.
First of all, many of them are designed to provide privacy. The identity of the sender and recipient is concealed. Previously, only cash offered such anonymity. Another major advantage is decentralization. Cryptocurrency owners access their funds through a virtual wallet. They are also used to receive or send funds.
Each wallet is linked to an address and a secret key allowing access to it. It is also possible to store funds on an exchange-type platform, but this practice can be risky.
Cryptocurrency is based on a blockchain, a copy of which is recorded on each “node” of the network. A node is a computer , on which the chain ledger is stored locally and synchronizes with other connected machines.
Thus, unlike the banking system, money is not stored centrally . The data is copied to nodes around the world.
Cryptocurrencies are therefore less likely to be seized , and are not likely to be impacted by a hardware failure or a disaster such as a fire.
Another advantage is a certain rarity for several cryptocurrencies . Bitcoin, for example, is a limited resource. There are already 17 million BTC in circulation, but their number is limited to 21 million. This limit is written into its computer code.
Therefore, this crypto enjoys a status similar to gold, silver or other rare precious metals and traditionally used as a currency throughout history. Unlike the Dollar or the Euro, its value will never decrease due to inflation.
The “Smart Contracts” are another strong point of some cryptomonnaies, like Ethereum. These are programs that exist on the blockchain and can be used to manage transactions, and for many other use cases, some of which have not yet been imagined.
Finally, the costs of cryptocurrency transfers are often lower than those of traditional currencies. Ripple is for example very fast and inexpensive to transfer, which strongly favors its adoption by financial institutions.
The best tools for investing in cryptocurrency
When wondering how to invest in cryptocurrency, there are several options available. You can directly access secure trading sites, such as Binance, Bitstamp, Coinbase or Kraken.
Otherwise, it is also to use online brokers, also called brokers. Online brokers often offer platforms with user-friendly and ergonomic interfaces. These interfaces generally make it possible to follow the evolution of several crypto-currencies live on their computer as well as on their mobile phone. That being said, you have to be very vigilant about the fees involved when going through a third party.
Mistakes to avoid when investing in cryptocurrency
As the Cryptonaute site states very well, “Investing in bitcoin and digital assets is speculative and extremely risky.” This is why it is important to learn about the price of cryptocurrencies and set a precise budget that we could afford to lose.
Since there are over 5,000 cryptocurrencies, it can be tricky to sort through and choose the right digital currency. If one wishes to invest in crypto-currencies, it is advisable to favor stable crypto-currencies and not to scatter in many financings. Focusing on 2 or 3 stable cryptocurrencies is more than enough, especially if you are just starting out.
In addition, even if the online process is very quick to invest or trade cryptocurrency, it is essential to seek advice from financial specialists, learn in forums or consult books relating to investment. We then take a very large critical distance on the opinions given on the crypto-currency, especially when these opinions push to buy or sell.
Don’t buy when the value goes up
At first glance, this might seem logical, but it is safer to invest when the value of a virtual currency has fallen, not when it is rising. “Overall, the best strategy is to buy and hold cryptocurrencies over a long period, for several months or even years, and resell them, advises Renaud Lifchitz. First, it’s less stressful. And it’s also less costly in transaction fees. The more you look at the variations from day to day, the more exchanges you make to try to make a move, the more you risk losing money. It’s the same as when you play at the casino.”
Beware of social media ads
“Buy bitcoin, now is the time!” Ads showcasing bitcoin are plentiful on social media, including Twitter and Facebook. “They are in fact intermediaries, specifies Renaud Lifchitz. There are two risks: on the one hand, it may be a scam, you risk losing your money. On the other hand, even if they are honest, these intermediaries are going to charge you relatively high costs compared to buying directly. ” Likewise, avoid online betting or binary options platforms, which often abuse the gullibility of individuals. “In any case, it is not a good deal to go through these intermediaries. Better to buy on real official exchanges where there are very little costs during the exchange.
Never reveal your wallet amount
When you start to have a large amount of money, it is better to avoid greed and to be held up, not to shout it loud and clear from the rooftops. Obviously, it is more difficult to steal cryptocurrency than physical money, since it is not visible. Recently in Turkey, a wealthy bitcoin holder was kidnapped. The thugs wanted to extort his password.
Do not leave large amounts on the exchange platforms
If you have large sums of bitcoin, avoid leaving them on an exchange, underlines Renaud Lifchitz. Because it can be hacked or closed overnight, as has been seen recently and on several occasions. The example of the Mtgox trading platform, which went bankrupt overnight, is quite telling.
These coins have potential in 2022
Is the bitcoin hype a thing of the past and are only cryptocurrencies with real-life applications interesting? I doubt it. But one thing is certain: the coin portfolio should be as broad as possible, then the potential for a decent return increases. But: We are not investment advice, so it is best to only invest as much as you are prepared to lose again in case of doubt. But let’s take a closer look at the potential hype coins.
Bitcoin: what would we be without the cryptocurrencies?
Exactly. Nothing. The Satoshi coin has paved the way for many other cryptocurrencies and will be indispensable in 2022. The potential is huge – while buying Bitcoin last year turned gray hair on many people, we see huge growth opportunities. Because what has happened in the last 20 years could repeat itself: first it went steeply uphill, then slowly downhill again. According to the statistics, a bullish rally should start again in 2022. The best-known cryptocurrency has potential for more and is considered a long-term investment asset, especially among the younger generation. Bitcoin is still considered one of the best cryptocurrencies – even in 2022.
Buying Ethereum in 2022: Potential? Yes!
Anyone who has invested in Ethereum for a long time already had a good laugh last year. The second place of coin market cap’s cryptocurrencies has delighted the minds of ETH buyers with brilliant price jumps and several new all-time highs. In some cases, experts were even sure that Ethereum would soon be able to overthrow Bitcoin from the throne. In any case, there is still some potential for ETH in 2022.
The secure asset: Stable coin Tether
Well, of course you can’t make big profits with the Stablecoin Tether. But we still dare to make a forecast for the cryptocurrency in 2022 : The digital asset is pegged to the US dollar and is therefore not subject to any exchange rate fluctuations. But we still see potential in the stablecoin, because it protects against the volatility of many crypto currencies. If the prices of your digital assets crash again, you can easily swap in Tether – are safe and usually do not have to pay the high fiat transaction costs at the important German-speaking crypto exchanges.
Polkadot: potential for 2022
Several important crypto exchanges have had the purchase of Polkadot in their portfolio for some time and the performance of the crypto currency leaves nothing to be desired: Now among the top ten best digital assets, everyone who bought Polkadot early can consider themselves lucky. Because the potential does not sleep in the year 2022 either: Polkadot is increasingly becoming a real application and is still considered a small insider tip for traders.
Cardano: From the underdog to the top 10
With its crypto currency ADA, Cardano relies on three important solution approaches for crypto currencies – that is why the coin moved from an underdog to the top 10 and has even more potential to make it big: Scalability means the ability of the blockchain to dynamically adapt to increasing numbers of users and requirements. In addition, he wants to enable the exchange of his own purchased cryptocurrency Cardano (ADA) for currencies such as euros and dollars without the need for a crypto exchange. The last problem that Cardano is trying to solve is the lack of sustainability of previous cryptocurrencies. In this context, sustainability means the active participation of the ADA owners in the further development of the project. Potential in 2022? Here we go.
For friends of risk: Dogecoin to the moon
Long-term investors might want to stay away from it, but for the short-term kick, buying Dogecoin might actually be something. Starting as a meme coin, cryptocurrencies brought us a few hype moments last year, not least triggered by Elon Musk’s tweets. Potential? In the short term. But it’s a bit of fun to see price movements around + 400% on the coin radar. For 2022 we can imagine that the Dogecoin will fly to the moon again.
Small but mighty: These other coins have potential in 2022
Of course, we mustn’t lose sight of many other cryptocurrencies either. The market for digital assets is growing and growing and growing … It is sometimes difficult to choose the right one. Unknown coins in particular often experience a strong price increase within a short period of time and move from insider tips to the mainstream. The purchase of Uniswap last year proved to be the right decision – there is still a lot in it for 2022. But digital currencies from crypto exchanges should not be ignored either: The Binance Coin is sometimes shooting through the roof and could show even more in 2022. Also the IOTA purchaseHas proven to be a good investment in the past, while the new generation of application coins such as Chiliz (CHZ) could see potential in the next year.
Mysterious origin and revolutionary protocol
The current craze for bitcoin, which recalls, on a larger scale, the first boom of 2017, is the symbol of the credibility acquired by this cryptocurrency, long looked down on by the financial markets. It must be said that this virtual currency has dragged for years a sulphurous reputation linked, in particular, to the legend surrounding its creation. Indeed, no one knows who invented bitcoin. The paternity is attributed to a Japanese, Satoshi Nakamoto, who would have created it in 2009. But no one has ever found any trace of this person or the collective behind it.
With bitcoin, you have to know reason to keep
“We really advise people to take a medium to long term approach. You should not watch prices constantly and panic when there is a sharp drop. It is in the long term that cryptocurrencies become profitable “, supports Manuel Valente. In an attempt to bring serenity to this somewhat crazy market, Coinhouse offers its customers services modeled on those of a traditional bank, for example the possibility of talking to an advisor by telephone to manage their portfolio.
What crypto goes to the moon?
Cryptocurrencies like Bifrost (BFC), Solana (SOL) and Cardano (ADA) have a positive trend with consistent gains. All of these examples are crypto-natives of a blockchain or middleware program, which gives them additional stability compared to competitors. While other digital currencies might explode and target the moon in the short term, many collapse before offering larger gains over a longer period of time.
BFC belongs to the Bifrost middleware program which enables multi-chain technology. As the technology is adopted on a larger scale, its native crypto may well follow suit. Bifrost (BFC) is up 290% last week and 1339% in the last month. At a current valuation of $ 0.5474, it’s still pretty affordable.
Cardano (ADA) is a blockchain platform with a positive message, aimed at changing the world for the better. Launching to “change makers, innovators and visionaries” is clearly working, as ADA has grown 23% in the past seven days and 115% in the past 30 days. The current price is $ 2.51 – backing a blockchain platform should give this valuation more stability than most standalone cryptocurrencies.
SOL is native to the Solana blockchain, and by far the best known of the examples. SOL ranks # 10 overall and currently sits at a value of $ 72. The token hit an all-time high this month thanks to explosive growth, in large part thanks to the growing adoption of its parent blockchain. It is the most expensive investment, however, if the Solana blockchain continues to thrive, so does its native SOL crypto.
Are cryptocurrencies a good investment?
For many experts, cryptocurrencies are not a real investment . Although the value may increase, in their eyes it is more speculative.
For good reason, cryptocurrencies do not generate “cash flow” . The only way to generate profit is for someone to pay more for that currency than you paid.
Thus, the digital currency perfectly illustrates the investment theory of “greater fool” . Buying crypto cannot be compared to investing in a well-run business, the value of which increases over time with turnover.
Many experts recommend that budding investors stay away from these resources. For example, Warren Buffett compares cryptocurrency to paper checks. According to him, “this is a very efficient way to transfer money anonymously. Checks can also transfer money, but they are not necessarily worth money.
Some see Bitcoin as the currency of the future. However, a currency requires stability so that merchants and consumers can determine the right price for a good or service. However, cryptocurrencies have never been stable.
Knowing that Bitcoin or other crypto could be worth more in the future, owners are less inclined to spend them today. Therefore, it is not a viable resource as a bargaining chip.