2021 was a big year for cryptocurrency – El Salvador made bitcoin their legal tender and other nations proposed to regulate. It also saw multiple developments, especially in the metaverse and decentralized gaming. However, the crypto market has been bearish for a while after bitcoin crossed the $68,000 mark.
To get an actual sense of crypto market volatility for 2022, you must be updated with the current trends and developments of the space. For example, NFTs and crypto adoption almost blew in the second half of the year. Polkadot finally launched Parachain and web 3.0 gained traction like never before.
However, the market still remains highly volatile despite its developments or shortcomings. If you want to invest in any of the projects or token/coin, you must research and understand to avoid losing money.
What Rules to Follow for Crypto Investments?
A few things every crypto investor must keep in mind before investing are:
1. Invest in small amounts
It is the basic rule for all investments. Investing in small amounts saves you from market risks and helps avoid losing money (in case you end up putting it in the wrong coin that drops its value overnight and diminishes from the market). It also helps you learn market risks and rewards on which you can base higher investment amounts.
2. DYOR
Do your own research – Always! Do not fall for any tips or those people who call themselves ‘industry experts’. Research is crucial for investments in the crypto market since it has high risk. It also helps you stay away from pump and dump schemes or scams.
3. Use trustworthy exchanges
Using trustworthy exchanges for conducting transactions is the best way to move forward with investments. Use the ones that have high trading volumes in your region or globally like BuyUcoin in India.. If your funds or crypto faces issues, you can easily contact them for a quick resolution.
4. Don’t panic
The cryptocurrency market fluctuates daily. Take Bitcoin as an example that crossed $68,000 mark but also saw its lowest value at $28,000 this year. Currently, Bitcoin is valued at $46,9551 on CoinMarketCap. Such fluctuations are sure to cause panic, especially among new investors. We always ask our crypto community members to HODL and let the market do what it does the best. HODLers get the best rewards. Do not panic buy or sell.
5. Focus on good coins and tokens
If you are new to the market and fear high volatility, always invest in flagship cryptocurrencies like Bitcoin and Ethereum. However, HODL is key to gaining rewards even in flagship cryptos. Focus on coins that have multiple use-cases in the blockchain industry. Do not fall for daily market trends. DYOR.
Crypto Market Evaluations: 2021 and 2022
Recently, a blockchain data research firm Arcane released a report focusing on cryptocurrency and blockchain market worldwide. The report suggested that Bitcoin outperformed S&P 500 and gold in 2021.
Here’s how 2021 went by for the Crypto Market :
- Q1: All about BTC (hedge funds, ETFs, Tesla investments)
- Q2: Mining (China banning crypto and climate effects of mining)
- Q3: El Salvador making BTC a legal tender (NFTs gaining momentum)
- Q4: ETFs, Metaverse, and macro
The report also suggests that Bitcoin will outperform the stock market in 2022 as well, thereby, maintaining currency market momentum. However, it will be interesting to see what mark Bitcoin touches or if it creates a new All-Time High. Another reason for its increasing adoption is that Bitcoin performs excellently against inflation.
For alternative cryptos, it is predicted that Ripple and Cardano will fall out of the top 10 charts of market cap. However, alternative cryptocurrencies and NFT tokens have performed quite well this year. Even Ethereum rose to its ATL of $4891.
What we are sure of is that institutional adoption of Bitcoin and Ethereum will continue to grow and we are excited to see what the future holds.
Wrapping it Up!
2021 saw multiple ups and downs because of government policies, whale movements, and high net worth individuals like Elon Musk. However, their effect on the crypto market seems to be reducing as people gain industry knowledge and adoption grows, except whale movements that drive prices. 2021 recorded the highest-ever crypto transactions. We only hope the trend continues.
Disclaimer: This article is not investment advice of any kind. Please research before investing.