Amateur Investors Left Sobbing Ruined: Cryptocurrency investments began in 2009 with the launch of Bitcoin. The primary purpose of this digital currency was to enable easy payments on the web. The payment model eliminated the role of central banks and regulatory authorities. The investment model gained huge attention due to its ease of use. Additionally, the lack of intervention by regulatory authorities worked to investors’ advantage. With the huge and widespread acceptance, the crypto market grew. Other than Bitcoin, there are more than 14k+ crypto tokens in the market today that can be found on this website. Each token is unique in its working model. The total market volume of crypto tokens sky jumped to $3 trillion.
How do cryptos work?
Each crypto token serves a different purpose. While Bitcoin enables easy peer-to-peer transactions, Ethereum works differently. Shiba works on smart contracts and Dogecoin makes online buying easier. Despite the difference, every crypto token uses blockchain philosophy and decentralised finance.
Blockchain is nothing but a public ledger on the network. It hosts information about every user transaction. Blockchains are used for a variety of services. The admins in the network control the view and flow of information on the network. The use of blockchain in the financial industry started only a few years ago. Many companies have been realising the importance of this working model and investing in it. Various research and development projects run on blockchain networks.
Decentralised finance is yet another attractive working model of cryptos. The token works efficiently to eliminate the role of regulatory authorities. Every transaction is on the web and involves the transfer of tokens from one digital wallet to another. The recipient may choose to hold the funding or liquidate the same.
Since its launch, crypto tokens have been providing investors with various benefits. The token provides for the ease, safety, and security of the transaction. To date, there has never been an incident reported of hacking the blockchain network.
Market performance of crypto tokens
Now, this is a difficult aspect. Like any other investment model, cryptos also had their share of ups and downs. Bitcoin launched at a market price of $1 per token. In two years, the price of tokens jumped to $200 per token. In another five years, the prices jumped multi-fold. The token reached an all-time high at $65k per token. The market performance of other cryptos is also phenomenal. The investment in Ethereum, Dogecoin, Polka, etc has increased. Both experienced and amateurs have been trying their luck with crypto investments.
Market performance of crypto in 2022
Ok, now that we have seen the positive side of crypto let us now jump to reality. The year 2022, has not been favourable for cryptos. Factors like the war in Russia and Ukraine, inflation, and change in dollar rates resulted in dull market performance. Every crypto token has been facing the heat of this market condition. The famous stable coin Terra is the biggest crypto to face negativity. The token is completely wiped out of the crypto investment market. Various tokens are expected to follow this trend. Popular crypto tokens like Bitcoin are trading at less than $19k per token. As per industry experts, the prices may come down to $10k per token. The case is similar to other tokens as well. Ethereum is still trading on a red line without any hint of recovery.
Are amateur investors ruined by the crypto market?
In any investment model, there are two types of investors. An experienced investor tries to look at various market factors before making a decision. It may take more than a year to finish an investment model. But then, in such cases, these investors are guaranteed long-term results.
Some amateur investors blindly follow the bull market trend. Such investors tend to invest their funding for market hype. These types of investors also do not understand the underlying risks of investments.
The current market performance has been an eye opener to all such amateur investors. Many young investors have invested their entire earnings into crypto. With the market showing no signs of recovery, these investors are worried about their holdings. Withdrawing at this stage would impact huge losses and other transaction charges.