3 Factors to Consider Before Investing in Cryptocurrency

Before Investing in Cryptocurrency

Waking Times

Cryptocurrency has become a buzzword among today’s investors. Ever since this concept became legal in several countries around the world, money savvy people have tried to understand how it works, and how this investment differs from traditional investment options. Many governments are still scrutinizing the mainstream applications of cryptocurrency, especially amidst the threats that crypto poses against the fiat. Therefore, if you’re considering an investment in cryptocurrency, here are three biggest factors that will influence its adoption.

  • 1) Volatility of cryptocurrency

    One of the reasons behind crypto’s immense popularity is the potential returns it provides. Although there are times when the drop in the crypto prices alarms the investors, that is nothing unusual in the investment industry. Plus, with investment tools like Bitcoin Trader Review offering you a thorough analysis of the market predictions, you can invest carefully instead of guessing which currency will fetch the best returns. Countries that are easily discouraged by the volatility of cryptocurrencies should start using Stable coins to attract more crypto users. These digital currencies are somewhat less volatile as they are pegged against another currency or commodity like gold.

    2) Blockchain scalability

    The cryptocurrency transaction speed is something that many investors and crypto users think can be improved. Currently, some of the cryptocurrencies can handle approximately 500 transactions per second. While this may be enough for some investors, many prefer a higher transaction speed because they don’t want to wait for a few additional seconds for the transaction to go through. To combat this problem, there are already teams working on blockchain scalability, and the news is, they are coming up with a solution that can improve the transaction speed from 500 to 5,000 per second. Once implemented, this can be the key to the masses finally using crypto for everyday transactions.

    3) Usability of cryptocurrency

    From the time cryptocurrency was introduced until now, there has been a paradigm shift in technology. This has helped countries adopt this investment option without a second thought. One of the reasons why many countries have been so open to cryptocurrency is its usability. Although users need to go through a few steps to invest, they should understand that it is for their security that the developers have added the security checks. However, the chief of Coinbase mentioned that the developers are working to simplify the cryptocurrency applications to make it easier for everyone to convert their cash into digital coins.

    Why is cryptocurrency the future of investments?

    Cryptocurrency is not just for the emerging markets. It is also for minority geek communities, as well as high net worth institutions that can move massive sums across different borders within a short time. One of the key factors that play in favor of cryptocurrency is the consistent low fees per transaction. There are probably millions of transactions that take place every day using crypto, but that hasn’t enticed the developers to increase the transaction fees.

    So, with all these benefits, it is only a matter of time before all the countries in the world start accepting cryptocurrency. Many already believe crypto is one of the most exciting investment options that also works well as a trading medium. It has the power to make even a rookie investor a millionaire if he/she pays attention to the trading fundamentals and follows the market carefully.