Should you buy or part with your cryptocurrencies during this Covid-19 period? Spotlight on the best times to invest in cryptocurrencies. Cryptocurrencies have taken hold of the financial landscape for a few years now. Bitcoin, the first virtual currency created, appeared more than 10 years ago.
Since then, many tokens have appeared in its wake, and cryptocurrencies, from a geeks’ utopia, have become financial assets in their own right, the prices of which are closely followed by early adopters but also today by banks. investment and central banks and even individuals, investors or not, who observe with fascination the progression of the price of these assets.
So, should you invest in cryptocurrencies? How to get started? What is the right time? Does the current context interfere with the virtual currency market? How to identify the cryptocurrencies with the most potential? Which active crypto to bet on in 2021? All our explanations and our advice to invest with confidence in virtual currencies.
How to get started in cryptocurrency?
First, to invest in cryptocurrency, it is imperative to know what it is and to understand what cryptocurrencies are used for, what factors can cause their prices to rise or fall as well as how they work. of this type of asset. For example, it is essential to master the blockchain technology on which most of the virtual currencies are based. You will also need to understand the differences that may exist between cryptocurrencies.
Finally, remember that before embarking on cryptocurrency, it is advisable to devote to this type of investment only a whole part of your assets. Investment in virtual currencies should not exceed 5% to 10% for the less risk-averse of your financial investments. Those who are more risk-averse should stay away from investing in cryptocurrencies. It is indeed a risky investment, subject to very high volatility and for which the risk of loss of capital is at least as important as the prospect of a high gain.
When are the best times to invest in cryptocurrency?
There are actually times that are better than others for investing in cryptocurrencies. Thus, it seems wise to buy cryptocurrencies during times of stress in the financial markets. Indeed, in times of crisis, the price of cryptocurrencies tends to rise, playing the role of a safe haven.
For example, Bitcoin, since September, has seen its price drop from around $ 10,000 to $ 13,000, as the second wave of the epidemic hit the world. Since January 2020, the price of Bitcoin has recorded an increase of + 85%. A correction, in the current context, should, therefore, in our opinion, encourage investors who so wish to position themselves in the virtual currency market.
What is the impact of Covid-19 on the value of cryptocurrencies?
The current context of the coronavirus epidemic may well reshuffle the cards. If according to a recent study by the University of Cambridge, there are nearly 100 million holders of cryptocurrencies in the world in the first half of 2020, this figure could well climb given the context of the Covid-19 epidemic in which we are let’s find out who seems to be pushing cryptocurrencies to new heights and Bitcoin in particular.
Demand is on the rise as more and more investors want to invest in this type of asset that has firmly established itself in the financial landscape and thus benefit from the recent rise in prices. In the case of Bitcoin, this demand pressure leads to a particularly sharp rise in the price of the asset since the number of tokens in circulation is limited.
How to find a cryptocurrency in the making?
For investors who do not want to invest in Bitcoin but take advantage of the potential of young cryptocurrencies, first know that it is better to have a taste for risk and to invest only the sums that you are willing to lose. Moreover, remember that the more recent the targeted crypto asset, the lower it’s market capitalization, the greater the risk of losing all or part of its capital.
To make your choice, you can refer to the ranking of cryptocurrencies according to their market capitalization. The Top 10 is the safest investment. The Top 100 is riskier but can present great opportunities. Beyond that the risk is immense and you should only invest if you consider this investment as a lottery ticket and/or you are particularly knowledgeable about the technology behind the coveted cryptocurrency. Indeed, to hope to find the nugget that will surpass the others; better to have strong computer and programming skills, and knowing what characteristic should enable the coveted cryptocurrency allows you to think that it is it which will know how to prevail over the others.
What are the new cryptocurrencies to watch in 2021?
Bitcoin is undoubtedly the star of cryptocurrencies. This is also the first. But there are many, many virtual currencies that have emerged in recent years that deserve some attention. Thus, Ether, whose Blockchain is used more than that of Bitcoin, is establishing itself as the second virtual currency.
Its deeply innovative character, its Ethereum network which allows the development of many applications makes it a must for a cryptocurrency investor. Ripple (XRP), a real challenger to Bitcoin, is also one of the best-known cryptocurrencies. But there are also other more confidential virtual currencies like Binance Coin; Basic Attention Token (BAT); Enjin Coin (ENJ); Nexo, etc.