Is crypto a better investment than stocks?
Investing in both stocks and cryptocurrency involves volatility. There are times when you will make money, and times when you will lose it. But the volatility of cryptocurrency tends to be much more significant than what you will experience investing in most stocks.
Investing in crypto assets is risky but also potentially extremely profitable. Cryptocurrency is a good investment if you want to gain direct exposure to the demand for digital currency. A safer but potentially less lucrative alternative is buying the stocks of companies with exposure to cryptocurrency.
Stocks are more proven investment instruments but are also highly volatile. There are a lot of people who have a percentage, if not all, of their wealth invested in cryptocurrencies. It's not wise to use the crypto market as a quick win.
Bitcoin has been more volatile than stocks. There is the potential for dramatic growth with Bitcoin—but also for dramatic loss. Because of its uncertainty, it might make sense to limit the amount of Bitcoin in an investment portfolio.
Cryptocurrency may be a good investment if you are willing to accept it is a high risk gamble which could pay off – but also that there is a strong chance you could lose all of your money. Prices of cryptocurrencies including bitcoin have been falling in 2022 amid a worldwide crypto price crash.
If you get lucky with your crypto investment, you could make a fortune -- even if you haven't invested a lot, and even if you've only owned the assets a short time. The reason this is possible with cryptocurrencies is that they can be very volatile.
Analysts estimate that the global cryptocurrency market will more than triple by 2030, hitting a valuation of nearly $5 billion. Whether they want to buy into it or not, investors, businesses, and brands can't ignore the rising tide of crypto for long.
Aside from the sheer risk of loss, trading crypto comes with the risk of fraud, a lack of transparency, and the potential for outright digital theft that (theoretically) isn't supposed to happen.
Expectations of Long-Term Investments in Cryptocurrency
Typically, long-term investors hold their investments for several years or decades to grow their returns. So, if you believe blockchain-based technology will explode in the future, investing in crypto for the long term can be a great option.
Further, although many digital assets do not represent a legal stake in the issuing organization, certain types of crypto security tokens are in fact designed to act like stocks: They represent an equity stake in an issuing company, in addition to having other programmable characteristics.
Is crypto really worth it?
They're decentralized—which means no government or bank controls how they're made, what their value is, or how they're exchanged. Because of that, cryptocurrencies are worth whatever people are willing to pay or exchange for them. Yep, it's pretty wild.
Crypto is very risky and not like conventional investing in the stock market. Bitcoin's value is based purely on speculation. This is different to company stocks where the share price will move depending on how the business is performing.
The IRS classifies cryptocurrency as property, and cryptocurrency transactions are taxable by law just like transactions related to any other property. Taxes are due when you sell, trade, or dispose of cryptocurrency in any way and recognize a gain.
And a recent study by Deutsche Bank found that about a quarter of Bitcoin investors believe Bitcoin prices will be over $110,000 in five years. The volatility is nothing new, and is a big reason experts say new crypto investors should be extremely cautious when allocating part of their portfolio to cryptocurrency.
- Bitcoin (BTC)
- Ether (ETH)
- Solana (SOL)
- Binance Coin (BNB)
- FTX Token (FTT)
- Celo (CELO)
- STEPN (GMT)
Ethereum
It dominates much of the crypto market, approximately 18.49% according to CoinMarketCap. Ethereum is perhaps the most explosive cryptocurrency on this list. If Ethereum explodes again in 2022, it will likely be a very big explosion.
Binance Coin (BNB)
Binance is the most successful cryptocurrency exchange in terms of trading volumes. Like bitcoin, binance coin keeps a hard limit on the number of tokens in circulation — in its case, 165,116,760 tokens. This helped the token price increase exponentially in 2021.
Bitcoin's Future Outlook
Bitcoin is a good indicator of the crypto market in general, because it's the largest cryptocurrency by market cap and the rest of the market tends to follow its trends. Bitcoin's price had a wild ride in 2021, and in November set another new all-time high price when it went over $68,000.
Warren Buffett wouldn't buy 'all of the bitcoin in the world' for $25: 'It doesn't produce anything'
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Is it good time to buy Ethereum?
Despite the slow start to 2022, many experts are still bullish, predicting Ethereum's price could potentially hit and exceed $12,000 this year. Despite the recent slump, Ethereum still had a relatively strong close to 2021.
Given its volatile nature, it is possible that bitcoin will gather momentum again at some point in the future (perhaps weeks, months or even years down the line). But no one has a crystal ball. So it's impossible to say for sure whether bitcoin will crash in the future.
One “expert” recommends that investors allocate 2% to 5% of their net worth, while another in the same article cautions no more than 1%. In another article, a financial planner says investors can allocate as much as 10% of their risky investments to cryptocurrencies, and possibly more for younger investors.
Cryptocurrency by its very nature is incredibly complicated. For one, you'll need to get to grips with the minefield that is blockchain technology to even begin to process the intricacies of this asset.
Ultimately, it's up to you whether investing $100 in Bitcoin is worth it or not. If it's a one-time investment and you just want to try crypto out, we would recommend going with a lower amount since you can't profit much from $100 anyway.
2022 has been a good year for cryptocurrencies despite the ongoing war crippling the crypto market for a moment. Along with traditional crypto coins like Bitcoin and Ethereum, this year has witnessed a high rise of meme coins as well as altcoins. Here are the top 10 cryptocurrencies for you to buy and hold in 2022.
While cryptocurrency can never go negative in the true sense, it is possible that traders can lose money, particularly if they use strategies like margin trading or futures contracts. Wise investors can choose risk mitigation strategies like stop losses and hedging.
