Cryptocurrency market capitalization has already exceeded $ 2.2 trillion, bitcoin-ETF appeared on traditional financial instruments
Of course, the crypto market is growing by leaps and bounds, the main cryptocurrency bitcoin has grown by more than 70% over the current year. The world’s largest investment funds are actively investing in various crypto assets. All this suggests that the industry is on an upward trend, and most likely, this trend will continue for a long time.
If we consider the most promising cryptocurrencies for investment in 2022, then there are three fundamental projects: Ethereum, Polka dot and Cosmos.
Ethereum
Technologically, this cryptocurrency offers a huge range of applications. The main function is to automate the exchange. Ethereum smart contracts allow two parties to enter into a transaction without intermediaries with low transaction latency, security, and also limiting bureaucracy as much as possible. With the help of this contract, you can both buy real estate and pay for dinner at a restaurant.
The creation of new business models and decentralized applications further strengthens the long-term growth potential of this cryptocurrency.
Based on its features and significant potential for scalability, some call Polka dot the “Ethereum killer”. Also, an important auction of places for future ecosystem Para chains has recently begun. In total, 100 places have been allocated in the ecosystem. One of the largest crypto-exchanges Finance held a promotion on November 4 in anticipation of the launch of the auction, promising to share a reward of $ 30 million among the participants. The potential of the project is huge, as is the interest among the participants of the crypto community.
Experts believe that with the successive launch of Para chains, the value of the Polka dot cryptocurrency will increase significantly. The attainable target for 2022 is a price range of $ 40-60.
This blockchain is rightfully called “Blockchain 3.0”. Cosmos are cross-chain solutions that allow all blockchains running in the Cosmos ecosystem to interact with each other and with external networks like Ethereum and Bitcoin. More than 250 decentralized applications have already been launched on the Cosmos network. The capitalization of these applications exceeds $ 70 billion. Its infrastructure is used by Finance Smart Chain, Redo, OKExChain.
The Cosmos cryptocurrency has no analogues, so it cannot be compared to anything else. The closest exception is Polka dot, which proposes building Para chains on its own.
Experts believe that this ecosystem will provide excellent growth in the future, as leading cryptocurrencies are already using this technology offered by the Cosmos project. Until the end of 2022, the price is projected to rise to a range of $ 40-50.
The main aspects for the selection of cryptocurrencies are:
1) Fundamentality of the project. It should propose a solution to an urgent problem for a particular cryptocurrency ecosystem, or even propose a new technology and mechanism of functioning.
2) Capitalization. The higher the capitalization, the higher the interest of market participants in the project, therefore, this can become a significant factor in making an investment decision.
3) Media coverage. The more attention of the crypto community participants is drawn to the project, the better.
Experts recommend avoiding investing in non-fundamental projects with low capitalization and popular in a very narrow circle, since in this case the risks of losing your funds are very high.
Who is suitable for investing in cryptocurrency, and who is not? How do price movements caused by statements by celebrities like Elon Musk affect the reputation of such assets? How will government digital currencies and their traditional types interact,
Many large investment funds around the world began to buy cryptocurrencies as a defensive asset during the pandemic, although previously they used mainly gold, developed country currencies and US government bonds. This is one of the main proofs that cryptocurrencies are less and less associated with some kind of marginal hobby, intended for a very limited audience. The same trend is observed in Russia: according to the latest survey of one of the world’s largest cryptocurrency exchanges.
Finance, 38% of respondents purchased crypto in 2020 due to the rise in the cost of bitcoin, and 71% plan to continue buying it in 2021. Moreover, for 45% of respondents, cryptocurrency is an additional source of income, and 40% do not use traditional investment instruments at all, such as buying shares, real estate and participating in mutual funds.
Cryptocurrencies are bought by both people who have free capital that they want to invest for a long time, and those who want to quickly make money on the volatility of the asset. Who do you think cryptocurrencies are best for?
Whom it is suitable for depends largely on personal skills. Some people want to invest in the long term, and cryptocurrencies are good for them: if you look at the 5-year forecast for the crypto industry, it looks very promising.
However, for short-term investors, this is only suitable if they are good at trading. So if you, in principle, do not know how to trade, this is not for you.
Many newbies try to make money with cryptocurrencies following intuition, rather than professional analytics, and they do not have the relevant experience. How do you rate this approach?
The situation in the field of crypto investments is the same as in the stock markets – there are also many novice traders who do not really understand the issue. In contrast, professionals have experienced different market situations and have learned a lot from this.
There are also novice users in the cryptocurrency markets, and if they want to learn how to trade cryptocurrency, they must be prepared to risk losing part of their investment. Therefore, I am sure that it is really important to educate these users, especially how to trade correctly, manage risks, and, of course, that only small amounts should be used for the first investments in cryptocurrencies. It is the responsibility of cryptocurrency trading platforms – they must provide their users with proper tutorials. By the way, Finance has such a program.
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