Due to the unstable economic situation, many people are considering the possibility of investing in something to save and increase funds. If the most reliable way used to be buying real estate, now progress does not stand still, and one of the most stable sources of income has long been cryptocurrency. We have prepared a brief overview of the market and a couple of tips on whether to invest in cryptocurrency in 2022. We hope that this information will be useful to you.
The concept of “crypto winter”
At the beginning of 2022, people who understand cryptocurrency announced the beginning of the so-called “crypto winter”. In simple terms, this is an expression denoting a period of a long-term decline in the cryptocurrency market and investor disappointment. This term can be compared with the concept of a “bear market” in the stock market. So is it impossible to invest in cryptocurrency in 2022? Not at all. It also cannot be said that all cryptocurrencies are steadily falling. For example, according to buidlbee, the top ten growing cryptocurrencies in October 2022 were: QNT, XRP, RSR, CSPR, COMP, HNT, ENS, XDC, APE, and ALGO. We cannot say that crypto is dying.
Some people are disappointed about this period, but others say that there are huge prospects in terms of growth. You can now buy a popular cryptocurrency at a very good price because there is no demand for it.
Where is the guarantee that the value of the coins will increase? All cryptocurrency exchanges unanimously say that a sharp drop is followed by a sharp rise. Yes, you have to wait a few years before you get a good profit, but it’s worth it.
Bitcoin and co
For most people who are not particularly fond of this topic, cryptocurrency is associated exclusively with bitcoin. But there are many other equally promising coins that you can buy without fear. Moreover, bitcoin reserves are not endless, and on the Internet, you can even find the exact date when they run out. Then the palm will go to Ethereum, which is now in second place. We also recommend paying attention to the Polygon (MATIC) currency. It is a level 2 crypto for the Ethereum decentralized application platforms.
Since 2021, it has been a complete platform for creating interconnected blockchain networks. If you try to translate in other words, then with the help of Polygon, everyone can write their blockchain for any purpose. In the future, Polygon will become the backbone of web3 networks. This a very promising direction, which we recommend seriously considering for long-term investment if you set such goals for yourself.
The market capitalization of the entire cryptocurrency sector has also grown and approached the $1 trillion mark. But whether bull investors will be able to stay above the psychologically important level remains unknown, as traders began to massively sell their BTC, fixing profits.
At the same time, the Bitcoin network itself is also showing some signs of recovery. For example, the number of coin holders holding at least 0.1 bitcoin has skyrocketed in recent months. Many of the players who still own cryptocurrencies now have stronger hands.
In addition, since the beginning of August, the Bitcoin network has seen a steady increase in hash rate (the total computing power of all miners). And according to Blockchain.com, on September 25, miners of the first cryptocurrency set a new record – 226,633 EH/s. It is worth noting that the higher the hash rate, the more difficult it is to obtain a new block in the bitcoin chain (and, accordingly, the lower the chance to receive a reward for this).
An investor does not have to play on volatility – on the contrary, you can buy BTC and store it on the exchange in order to exchange it for fiat or stablecoins if necessary. The main thing is to wait enough time and choose the right moment to sell. It is better not to rush and stick to conservative tactics. Of course, you still have to follow the trends in the market, but not as actively and not as often as in the case of other cryptocurrencies.
However, right now experts’ forecasts remain disappointing. The difficult geopolitical situation and market instability negatively affect cryptocurrencies and do not allow the sector to enter a stable bullish trend. Recently, a rehab for crypto addicts has opened in Scotland – they constantly monitor the market, bringing themselves to physical and emotional exhaustion. But it is not necessary to “immerse yourself in the context” so much. You can also experiment with crypto in other ways, such as investing in exchange-traded funds or making a conservative bet on a possible rise in the price of bitcoin.