Don’t Get Left Behind in the Cryptocurrency Race

Cryptocurrency trading has been around for well over a decade, but for many of us it reached a zenith in December 2017. At its height, Bitcoin traded at $20,000 per unit, before plunging spectacularly. Today, this cryptocurrency trades in a tight range between $8,000 and $10,000. The relative stability of cryptocurrency prices is notable, given the extreme volatility this contrarian investment option is subject to. The total value of the digital currency market is hovering around $400 billion – a far cry from the $800 billion + towards the end of 2017.

Regardless, Bitcoin remains the dominant player in a market now saturated with 1,610 cryptocurrencies. By mid-May, Bitcoin’s dominance remained strong at 36.7%, while the other 1,609 cryptocurrencies made up the remaining 63.3% of all market capitalization. Consider that the top 5 cryptocurrencies including Bitcoin, Ethereum, Ripple, Bitcoin Cash, and EOS account for $281 billion of the $400 billion market capitalization of all cryptocurrencies. That amounts to a whopping 70%. For this reason, traders tend to focus their energy on the top 5 cryptocurrencies as a barometer of what is going on in the virtual currency market.

Back to Basics: What Is Cryptocurrency and Why Is Everyone Interested in It?

The rush to buy Bitcoin and Altcoin is born from a need to invest in a future-oriented technology that has far-reaching implications. Nobody disputes the power of blockchain technology on financial transactions processing, smart contracts, frictionless executions of trades, and the like. There is a little hesitation about regulatory measures and how that will impact cryptocurrency functionality. The core tenets of digital currency trading include anonymity, zero intervention by central banks, and free transfers in double-quick time.

Of course, traditional financial institutions cannot possibly keep up with the technology advanced by Ethereum, Ripple, Litecoin, or even Bitcoin. As such, there is an opinion that banks are doing everything in their authority to hamstring cryptocurrency exchanges, for fear of losing valuable revenue streams. The authorities are now stepping in to try and regulate cryptocurrency exchanges and provide a framework for trading and investing in this new-age technology.

Leading cryptocurrency trading broker, Wilkins Finance offers a comprehensive Cryptocurrency definition: ‘… A cryptocurrency is a digital asset in the form of virtual money that is transferable between two or more parties over an electronic network…’ This definition provides clarity on what the technology does, and who can use it. Cryptocurrency such as Bitcoin is not only a medium of exchange such as fiat (fiduciary) currency, it is also an investment vehicle. Had you purchased Bitcoin when it was worth fractions of a penny, you would enjoy asset growth valued at thousands of percentage points. Such is the explosive potential of this technology and digital currency that it has been deemed the most volatile financial instrument on the market.

Cryptocurrency exchanges are designed to facilitate trading of cryptocurrency such as BTC, LTC, XRP, BCH and the like. It is imperative to research the type of cryptocurrency under consideration, the merits of that technology, and the growth potential. Once this has been done, it is relatively easy to trade cryptocurrency. Back in the day, people would mine cryptocurrency for hours on end. That type of technology is largely avoided owing to the excessive time and cost constraints involved. Success in cryptocurrency trading is dependent upon research. As more companies like American Express adopt digital currency as their go-to transactions medium, so we will see a move towards stronger fundamentals in this burgeoning new asset class.

The post Don’t Get Left Behind in the Cryptocurrency Race appeared first on Home Business Magazine.


Source: New feed

Be the first to comment

Leave a Reply

Your email address will not be published.


*


This site uses Akismet to reduce spam. Learn how your comment data is processed.