Cryptocurrency has seen some massive swings up and down recently. In 2021, coin values reached record highs. Then at the beginning of 2022, many crashed down to earth. It's left people wondering – investors or not – ‘what's coming next?'
Now that things appear to be calming down, is it a good time to start investing in cryptocurrency?
The Crypto Market: A Quick Recap
Everything moves fast in the cryptocurrency world, so if you haven’t checked the latest market news for a week or so, chances are you’re already behind.
Late 2021 was a boom time for most major cryptocurrencies. Bitcoin surpassed the $67,000 mark to reach an all-time high around this period. However, by mid-January, the seemingly inevitable fall came; the price tanked to around $35,517 at its lowest.
As the cryptocurrency market tends to follow bitcoin’s movements, most other coins followed a similar pattern.
Although crypto has always been notoriously volatile, there have recently been a lot of concerns regarding regulations. China banned cryptocurrencies, while other countries are moving to introduce more controls.
At the same time, the buzz around the metaverse and NFTs have kept crypto firmly in the news, helping it move toward the mainstream.
Despite the falls over the previous few months, things are looking positive again. Again following bitcoin, the coin has almost continuously risen in value over the last two weeks, hovering between the $40k and $50k price range. That leads many to believe a full recovery is on the way, even if the previous astronomical highs ($70k) are currently out of reach.
Is Now the Perfect Time to Invest?
Just maybe, yes.
In the investing world, the name of the game is to buy low and sell high. Of course, there’s no way of predicting what the ultimate low or high will be. However, we know that recoveries have always followed dips for major cryptocurrencies like bitcoin and ethereum.
Cryptocurrency appears to be coming out of a dip now. While nothing is guaranteed, it looks like now is a promising time to invest in cryptocurrency
Ultimately, the question comes down to risk tolerance. For those who always react badly when investments decline, there’s never a perfect time to invest in crypto. For the patient, prepared for short-term pain to achieve long-term gain, now seems to be a pretty good time to get involved.
Top Cryptocurrencies for 2022
There’s more to the cryptocurrency world than bitcoin, the original crypto giant. Sites, such as Coindesk, that carry crypto news and analysis, are great resources to identify hidden gems in the market yourself.
If you find a coin that sounds interesting, research its price history and key features before you invest.
However, a couple of cryptocurrencies seem to have promising futures:
Ethereum is the second-biggest cryptocurrency, thanks to its ability to execute smart contracts, which are the basis of exciting technologies like NFTs and crypto gaming. Unfortunately, it’s recently been highlighted that Ethereum is inefficient and not scalable, which lays the way for alternatives to take hold. Solana is one of them.
Solana is now the eighth-biggest cryptocurrency – marketing itself as a faster and better version of Ethereum. Its price has jumped in value from around $26 in July 2021 to more than $230 in November 2021 — quite the turnaround. Although it’s now closer to the $100 mark, things seem to be recovering.
Solana isn’t the only crypto protocol positioning itself as an Ethereum alternative. Polkadot has been another success story over the last year or so. Its main selling point is joining different blockchains together, which opens up more possibilities for app developers than something like Ethereum can offer.
Since its launch in 2020, Polkadot has enjoyed two separate price spikes — reaching $47 in May 2021, and $54 in November 2021. Its price is now around $22, but it’s been heading upward. Now could be the perfect time to profit from the next high point.
How to Invest in Cryptocurrency
Even if you know which cryptocurrencies you want to invest in, actually getting started can be a daunting process.
People talk about “investing in cryptocurrency” all the time, but they rarely go into how exactly to go about it. For a beginner, crypto investment is a lot to navigate — it involves more steps than investing in something like a stock since you’ll need to convert your currency over to crypto and figure out where you want to store your funds.
We could go into great detail about the complexities of every single step, but here’s the gist of things:
- Choose an exchange. Buy cryptocurrency from a dedicated exchange like Binance or Coinbase. Look at the fees of each platform carefully, since costs can eat into profits. And ensure an exchange actually sells the crypto you want to buy.
- Buy cryptocurrency. Use a debit or credit card to purchase the crypto of choice. Be careful – some banks don’t allow transactions on certain exchanges due to security concerns regarding crypto.
- Move the crypto to a wallet. It’s more secure to store crypto on an external wallet rather than leaving it sitting in an exchange. There are a few options here, including online storage options like MetaMask and offline wallets like Exodus. Do the research, especially when it comes to security and insurance policies.
- Choose a strategy and stick to it. Many crypto investors like to HODL, buying a cryptocurrency and hold it over the long term. Other trading strategies involve timing and trying to play the market. Decide what your approach will be, and stick to it.
It’s Over to You
It’s impossible to find the perfect time to invest in cryptocurrency. More time spent reading news and predictions, will reveal there's always someone saying that a crash is imminent, while another expert claims prices are about to go to the moon. At the end of the day, you have to decide for yourself and prepare to be wrong.
Having said that, various signs suggest that now is the perfect time to get started.
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Featured Image Credit: Pexels.
Tim Thomas was born in Guildford and now lives near Southampton, the UK with his family. Tim started his career in the financial markets and has traded and invested in stocks, options, forex, futures, crypto, and real estate for over 20 years. His website, https://timthomas.co/, is dedicated to teaching swing trading strategies for profits, helping traders reach their wealth and financial freedom goals.