What is cryptocurrency?
Cryptocurrency is a digital currency that is used as an alternate form of payment, they are used as both a currency and a virtual accounting system.
The security system Cryptocurrency makes it almost impossible to counterfeit or spend more than once.
Cryptocurrencies are usually not issued by the central authority, they are in no way connected to the government, and they are devoid of government interference or manipulation.
How to understand cryptocurrency?
Crypto Trading refers to the different encryption algorithms and the cryptographic techniques that safeguard the entries like elliptical curve encryption, public and private key pairs, and hashing functions.
Cryptocurrencies are mined and purchased from cryptocurrency exchanges, or they are rewarded for work done on the blockchain. Most e-commerce sites do not accept cryptocurrency for purchase, even bitcoin which is the most popular cryptocurrency is not used for purchases.
They are used for investment and trading, they are also used for cross-border transfers.
Ways to analyze cryptocurrency:
Market capitalization:
Market capitalization or market cap is the token price multiplied by the total number of tokens that are in circulation. If there is an increase in market capitalization it shows that there is excitement about the ecosystem and there is a net capital inflow in the industry.
The volume of trade:
Volume speaks about the total number of coins or tokens that are traded during a period. The trading volume is higher when there is a drastic price change when the volatility is higher. Any kind of news regarding the current state or plan of a project increases the token trade volume.
Social discussions and Sentiments:
There is nothing that people do not discuss from upcoming projects and developing projects to already developed projects, declaration of bankruptcy on social media platforms like Twitter and Reddit, the tone of the discussion, the official subreddit, and sentiment analysis of how the community feels about a particular project at a given time.
On whole, the values for the top few tokens can show us how the sentiments towards the market have changed over some time.
Top cryptocurrency trends in 2023 and 2024:
- Bear market takes hold:
With the considerably low asset prices and investors moving away fast
The crypto market sits in a bear market in early 2023.
The market has faced this situation 3 times, each of these periods lasted for 20 months and resulted in a decrease of 70%.
However, there are even positive trends that have been emerging. In mid-January, bitcoin was only 10% off of its 200-day moving average.
Certain analysts say that climbing above a 200-day moving average signals the end of the bear market, because of this many are saying there is going to be a recovery of bitcoin in 2023 and it will be hitting $35,000 by the end of the year.
- Resurging And Expanding Use cases For NFTs
Another trend spoken about by crypto experts that are seen on the surface is non-fungible tokens.
In march 2021 there was an NFT that sold for $69 million.
There was a crash in 2022 due to high inflation, scams, and the lack of trust in blockchain-related products.
Many believe that NFTs are going to help this situation to recover.
Research shows that the NFT market will reach $231 billion by 2030.
- Increasing regulations of Cryptocurrency And exchanges:
As of now, the U.S. government has very few laws and regulations concerning cryptocurrency.
The first time crypto currency was mentioned in federal law was in late 2021.
The law was speaking about the tax implications which do not come into effect till 2024.
How to be profitable through cryptocurrency?
Cloud mining:
 It is a way to mine cryptocurrency by using cloud computing power without needing to install any hardware or software. People can start mining just by opening an account and paying a very minimal fee.
Affiliate programs:
Several crypto affiliate programs pay for referring someone else.
They provide you with a link which you will have to send the person you want to bring in. If anyone registers using that link you will be paid an amount.
Buy and HODL:
This is a very common way of earning through cryptocurrencies, most investors buy coins like bitcoin, Ethereum, Ripple, and many more after which they wait until their value rises, once the market prices rise they sell them for a profit.
Day trading cryptocurrency:
It is often argued that trading and investing are the same things but they’re often differentiated to a large degree, people who trade look for instant profits, they buy and sell either on the same day or within a day or two, and investors buy the coins and keep them for a long period of time say few months or decades as well sometimes.
Day trading can be a way to make money through cryptocurrency, just like stocks.
Stake your Crypto:
This is similar to the process of keeping your assets in the bank and earning assets through it.
Advantages and disadvantages
Advantages:
- Protection from inflation
- Self-governed
- Cost-effective
- Secure and private
- Easy to transfer
Disadvantages:
- Lack of proper regulation
- Frauds and scams
- Very risky
- Highly volatile
What to know before investing in cryptocurrency?
Many investors are very interested and attracted to the upside of the market, but it is very important to thoroughly understand the coin you decide to buy and research it carefully.
Is cryptocurrency a good investment?
Only someone who has the patience to withstand great risk is advised to invest in cryptocurrency. It is very important to take care of your mental and physical health, only a healthy mind can make proper decisions, if you are not taking care of yourself you may tend to make mistakes and lose all your money also.
Conclusion:
Investing or trading in cryptocurrency is considered risky, even the most established currencies are very fluctuating. It is important to save yourself from the risks and read well about it to understand it well and not lose all your money.
