The news of the past few months has once again established cryptocurrency as a highly valued asset. The market capitalization of Bitcoin, which is the best-known representative, exceeded the threshold of US $ 1 trillion in May 2021.
But what is the reason for traders’ and investors’ interests in the crypto market?
Why is cryptocurrency attracting so many investors?
Naturally, it lies in the tremendous opportunities for capital gains. And these opportunities come from the core specificity of crypto assets: high volatility.
After a spectacular drop in value on May 2, Bitcoin has indeed benefited from an upward momentum thanks to the “pump & dump” exerted by Elon Musk. This volatility is the main characteristic that makes cryptocurrency a very profitable asset.
If you are a first-time investor, take a sneak peek into some trading tips we offer you.
The best cryptos to invest in
Here is a quick recap of the most prominent cryptos for trading and investing at the moment.
BITCOIN
This ultra-powerful cryptocurrency is also popular as the king cryptocurrency. A maximum amount of 21 million Bitcoin is available on the market, and its scarcity makes it appealing for investment.
RIPPLE
Ripple stands for the next generation of payment networks. Initially designed to attract large financial institutions, digital currency has evolved into cutting-edge technology. It has exploded in recent weeks – in just one day it increased by 71%.
LITECOIN
Litecoin is very similar to BTC, and it is also one of the oldest cryptocurrencies. There are two big differences between Litecoin and Bitcoin: their speed and their quantity. If it takes 10 minutes to create a Bitcoin block, Litecoin only takes 2.5 minutes.
ETHEREUM
Ether is like a giant computer housing many computers around the world. Ethereum can meet sophisticated demands. Its ability to store breakthrough computer programs puts Ether ahead of BTC. Ether jumped over 1000% in 2018.
NEO
NEO is the 1st decentralized open-source cryptocurrency. It was launched in China and used a blockchain algorithm similar to that of Ethereum. If the same basics apply, it also supports decentralized e-commerce, as well as the identification and digitization of multiple assets.
Tips for starting trading cryptocurrencies
With Bitcoin back in a strong bull market, more and more investors are entering the crypto world with the urge to invest some money. In order to avoid common mistakes, here are some tips.
Carefully select the platform for trading.
Although it’s possible to exchange cryptos in real life, by meeting with the interested party, trading with a broker remains the most usual and practical way. In addition, many Forex brokers these days allow purchases and exchange of cryptos. In any case, you must carefully make a selection of the platform and go for the transparent and regulated companies.
When you go to choose a cryptocurrency exchange platform, carefully study its reputation but also the transaction fees that you will have to pay.
Do your research before buying cryptocurrency tokens.
Going through the list of cryptocurrencies on the benchmark site CoinMarketCap, you have likely found cryptocurrencies worth as little as $ 0.005. Instinctively, then, you think to yourself that there is a better chance that this type of cryptocurrency will double its value rather than more well-known cryptocurrencies already worth more than $ 100.
However, this is not necessarily true. Indeed, many factors influence the price of a cryptocurrency, starting with the law of supply and demand. Thus, you should absolutely learn about cryptocurrency before buying tokens. Take the time to consider the project behind a cryptocurrency, its origins, how it fits into its field, and most importantly, who is the team behind it. Finally, you should also follow the news related to a cryptocurrency, as this has a huge impact on the value of its tokens.
