What is Crypto?
Cryptocurrency, or crypto for short, is a form of decentralized digital currency that is secured by blockchain technology, which makes it hard to modify, hack into, or corrupt. Cryptocurrencies are not regulated by any country’s government or banking system. Instead, all digital transactions are recorded on a public ledger for anyone to see. The nature of cryptocurrencies keeps them unaffected by any sort of government influence but also renders them more volatile than regular currencies. Currently, there are more than 8,000 cryptocurrencies in circulation.
The Growing Popularity of Crypto
Crypto has become a hot topic in fintech in the past two years as more people advance from investing in digital currencies. Why is crypto so popular? For a few reasons:
- Crypto is not regulated by any country’s government. It is a decentralized currency.
- It’s an alternative store of value to traditional markets, which makes it a profitable trading currency.
- More online marketplaces are adopting crypto as a method of payment.
Crypto Exchange Platforms
To many, crypto seems like the currency of the future. For those interested in buying and trading crypto, there are many platforms available that offer crypto trading.
Getting Started with Crypto
Create an account on any of the above platforms to get a virtual wallet and start buying crypto. The most popular cryptocurrencies on the market include Bitcoin, Ethereum, Binance Coin, Tether, and Solana. Since Bitcoin was invented in 2009 and Ethereum in 2015, they have the longest histories and are considered the most stable cryptocurrencies. Although digital currencies are generally volatile, Bitcoin and Ethereum are relatively safer choices if you want to start with investing in something with an already established history.
A Brief History of Crypto’s Performance
Because crypto is still a relatively new currency compared to already existing national currencies, there will always be a level of risk for anyone investing. The timing of when crypto increases or decreases in value is still mostly unpredictable. The past five years have seen Bitcoin rise and fall dramatically a few times. In 2017, Bitcoin rose to $20,000 but fell to $10,000 in just a few days. Its value dropped to less than $4,000 by March before going up again the following year.
Is Crypto Worth Investing In?
If you decide that you want to invest in crypto, do your due diligence in researching the best-performing currencies, their background history, and how they are made. While crypto does seem exciting since it is still an emerging asset class with a long way to go and many investors watching, there are still many questions about its future. Uncertainties surrounding it include how it will be regulated as it expands in use, how its volatility can be controlled, and how it can impact global financial markets as it becomes more popular. Some say that if they could go back in time, they would have maxed out their crypto investments, but would you?
