From the ever-popular Eretheum and Bitcoin, to the fast-growing Tether and Dogecoin, literally a broad range of cryptocurrency is flooding the financial world in the digital age. What better way to invest than in this advanced period of time when every nuance of life is touched by technology! While choosing the “best” cryptocurrency to invest in, investors who are new to this, or even seasoned ones, may be confused as to what to pick. Due to the overwhelming nature of their reach and extent, and the large number of different crypto coins on the market, safe investment may elude some investors. This is a new instrument to invest in. In any case, with traditional investments like stocks, there is always some doubt as to the security in investment. With something totally new (and out of the blue), there is more doubt in any investor’s mind.
An astonishing ~20 million Indians invested in cryptocurrencies in 2021. This number is likely to increase in 2022 as the awareness around blockchain technology and cryptocurrency markets has improved. This is likely because of the various sources where investors are finding educational content on crypto investing such as Youtube, Twitter, Instagram, etc. Yet, investors that rushed into buying cryptocurrencies in the second half of 2021 are likely to have made a loss on their purchases because the markets have seen a downturn post this period. Therefore, online content will help you educate yourself but it is still advisable to take your time and learn about this new market before investing any of your money in digital assets. In case you wish to invest in the crypto space, you cannot depend on hearsay and rumour. The choice of a cryptocurrency to invest in must be aligned, as it is with any other investment, with an investor’s financial goals. Consequently, it is vital that investors look for knowledge that gives them clues as to how to invest in cryptocurrency for the short or long term. This can be a challenge, but there are sources online like asset management portals and reputed brokerages like Motilal Oswal which can help you.
Fresh investors and newbies to the investment world look for and seek out short term instruments for investments. For starters, they may not have a lot of capital to invest, or they may want to test the waters of investment before they dive in deeper. Additionally, younger investors search for investments which may generate monetary rewards in the near future as they want to fulfil certain goals. For example, a lot of people tend to invest in equity mutual funds of different kinds to achieve long-term or short-term aims. With cryptocurrency, how does an investor judge which is good for different investment tenures?
For any investor, it is essential to evaluate cryptocurrencies from many perspectives. Investors must take into consideration the views of governments, general stability of a currency and that of other experts in the field. In this day and age, cryptocurrencies are the rising factor in any economy. As with stocks, there may be losses and wins, but unless you go into it (with information to back you), you may not find out whether any cryptocurrency suits your needs. However, you can find out some information wherein you get some idea of cryptocurrencies that are suitable for short-term gains.
In the stock markets, investors are advised to have a long term mentality to avoid volatility. In the crypto markets, this advice holds truer than ever because the volatility is tenfold! Yet, if you still want to make a short term investment, it pays to learn the basics of technical analysis to find good entry points.
The standout: The standout cryptocurrency to consider investing in is the market leader, which is Bitcoin. In this nascent market, which is just over a decade old, Bitcoin has led the way throughout. It has the highest market cap by a long way amongst its peers which stands at $800 Billion. Hence, it can be considered a “large cap investment” within the crypto space. There are also various altcoins that have a lot of potential such as Ethereum, MATIC, Axie Infinity, MANA, Telcoin, etc. Yet, there is a saying in the crypto space - “As goes Bitcoin, so goes the crypto market.” More often than not, this holds true.
According to some experts, here are some cryptocurrencies that may match your short-term aims:
While there are various altcoins in the crypto markets, the market leader remains Bitcoin and is likely to be the safest bet. Before investing any money into this space, make sure to do your research. Learn about the factors which affect the crypto market cycles, such as hash rates, bitcoin halvings, country regulations, etc. You must also learn about the tokenomics, market cap and fundamental strength of the cryptocurrency you are thinking of purchasing. This knowledge will help you make more informed choices.
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