There has been has been ups and downs in the crypto industry so far in the year 2022. The crypto market was bearish for months with several firms shaken by its effects. Despite this, there has been mass adoption of crypto while more projects were being created.
Terra Luna has been one of the worst losers of the year after it collapsed in May. Other crypto firms like Celsius, Tornado Cash, Harmony, and so on have had issues that have caused a stir in the industry.
Many have asked if crypto will bounce back after the meltdown. Bitcoin and other crypto assets have been on the radar as the future looks gloomy.
While Bill Gate and several other influential men have joined in this debate about the future of crypto, financial gurus such as Robert Kiyosaki have advised investors and traders that this is the best time to invest/buy.
Although some have decided to invest despite the crash, if you’ve decided to be involved in crypto too, there are things you need to know. Before we check them out, let’s see why people want to be involved in crypto.
Why Do People Want to be involved in Cryptocurrency?
Listed below are the reasons many people are involved (invest, hold, or trade) in cryptocurrency today.
1. Distrust in the financial system
Bitcoin came to be after the global financial crisis of 2007/8. It was proffered as a solution to the reckless behavior of large financial institutions & the inability of the government to regulate them.
The advantages digital currency has over the traditional forms of money make it one to consider for the people, Money laundering, for example, is less common than cash currency.
People who saw the value of BTC jumped on it to make it one of the fastest-growing new technology in history. Bitcoin has enjoyed huge success despite its risky nature and has been an asset to trade for profit.
It has also been used as a model for other cryptocurrencies. Today, there are over 20,000 crypto assets according to the CoinMarketCap listing.
2. Make quick money
Many people want to trade Bitcoin as it is seen as a way of making quick money. The unstable price of crypto assets has made many study its market in order to make a fortune.
Many who bought Bitcoin in the early days became a millionaire overnight. There are a lot of stories of ordinary people and early investors who made their fortune in BTC with relatively little initial investment. Even the early miners are not left out as they earned BTC with ease.
These stories of the early investors have captured people’s imaginations and made them look to BTC to get rich. Although there has been a bubble at some points for various reasons, people are still key to the possibilities in crypto.
In Africa where there are issues with the financial institution as well as poverty ravaging the land, people trade Bitcoin to gain financial freedom. The continent, for this reason, has the largest population of P2P users in the globe.
3. Hedge against inflation
In Nigeria for example, many people pitch their tents with cryptocurrency to hedge against inflation. The high dollar in the exchange market has contributed to the ‘crippling’ economy, Many, therefore take to Bitcoin trading as a solution.
Nigerians are listed top among the users of the leading crypto exchanges such as Binance, Coinbase, Kraken, etc. Many people buy & sell Bitcoin and several other alternative coins for this reason.
4. Decentralization of crypto
Many crypto assets are decentralized. This means that no company, government, or organization has complete control over the currency. Some people really care about decentralization which helps to send/receive money without the notice of banks & other financial institutions.
Although some governing banks like the Central Bank of Nigeria have banned activities involving crypto in financial institutions, peer-to-peer platforms which are decentralized have been an option. One of the best P2P platforms in Nigeria today is Prestmit.
5. New financial plans
People now focus on Bitcoin and other crypto assets because of its new uses of financial alternatives. These programs are called Defi (decentralized finance).
Some of the top Defi programs offer innovative approaches to peer lending. In other decentralized systems, users can lend any amount, without putting these funds under control. This is done automatically via smart contracts in blockchain.
Things to Know Before Getting into Cryptocurrency in 2022
Here are important things you need to know before putting your hard-earned money into crypto endeavors today. They are discussed below-
1. You Should Look at Long-term Investment
The price of crypto assets will always rise and fall as volatility is the nature of cryptocurrencies. To put off the fear and pains of crashes, it is better to invest for long-term purposes.
This isn’t to say that you cannot make money in a relatively short amount of time, many have become millionaires while investing for short-term gains.
Investing to create wealth for the future is less likely to give into the market fear and make wrong decisions.
2. Expect Extreme Market Volatility
Crypto crashes are inevitable in the crypto market. There have been crypto crashes that scared many investors, and there likely will be many more.
There are times it looked like it was the end for cryptocurrency but has bounced back just as it is turning green indexes now. Investing on a long-term basis is however a way out. You need to understand that surviving crypto market downturns is just a part of the process.
3. Invest in Crypto Assets with Real World Use Cases
One of the several reasons bitcoin is seen as a crypto asset that would stand the test of time is its real-world use cases. Crypto experts advise that to find a worthy investment, you must ensure that it has real-world use cases.
Crypto assets that have the highest chances of survival are usually the ones with the most applications in the real world. While it cannot guarantee that the use cases will help the cryptocurrency thrive and compete in the market, it is more likely that it carries value, which will prove its worth over time.
4. Extreme Market Downturn will be over
Bitcoin has existed as a digital currency for over a decade and survived several crypto crashes. Financial experts have advised that the best time to invest is during market downturns.
The price of crypto assets will always recover just as Bitcoin, Ethereum, and others are doing after almost hitting their all-time lows. You should have it in mind when getting into a crypto investment that the harsh time won’t last for forever.
Cryptocurrency has witnessed both ups and downs so far in 2022. If you must invest in cryptocurrency, you need to learn the appropriate strategy to preserve your money to the greatest extent feasible.