Bitcoin was launched in 2009 by an anonymous developer known only as Satoshi Nakamoto. The technology that makes Bitcoin possible has taken on a life of its own, with numerous cryptocurrencies springing up to compete with it. As a result, the crypto market looks like a jumble of similar offerings. However, you should be able to spot the real gems and distinguish between them. Here are four things to keep in mind when navigating the cryptocurrency market.
Investing in crypto can provide access to a new demographic group. Often, crypto users represent cutting-edge clients who value transparency in transactions. In fact, a recent survey found that 40% of cryptocurrency users are new to the company and spend twice as much as typical credit card users. Additionally, introducing crypto can increase internal awareness of new technology and position the company for the emergence of central bank digital currencies. With the increased demand for crypto, businesses can access a whole new asset class and access new liquidity and capital pools.
A cryptocurrency exchange should offer enough trade volume to allow users to sell their coins at any time. This ensures that the coins are liquid, which is important if you want to sell them later. Popular exchanges have the largest volumes. But before you decide to invest, it is best to learn as much as you can about how the exchange works and what your goals are. A high trading volume is a good sign of a secure exchange, but if you are new to crypto, a lower trade volume may make the price a little higher.
Ethereum is similar to Bitcoin, but has far more uses than just financial transactions. It has its own blockchain, and provides built-in programming languages that allow users to write smart contracts, transfer Ether, and mine Ether. Unlike Bitcoin, Ethereum is more complex than its predecessor. If you want to get involved in cryptocurrency, consider signing up for a CFD account with IG. This account allows you to speculate on the value of cryptocurrencies without actually purchasing them. You never take ownership of the digital currency itself.
When you sign up with a cryptocurrency exchange, you’ll have access to a secure, online account to store your crypto. Using this platform can be convenient for beginners, but advanced users may opt to store their crypto in their own wallet. Be aware of any exchange that allows storage only within the platform. Some exchanges, such as Robinhood, have recently announced a crypto wallet for customers to use. While it is tempting to use your credit card to buy cryptocurrency, it’s not recommended for new users.
Cryptocurrencies are not without flaws. One of the biggest roadblocks to integration has been the volatility of crypto currency. This volatility has made it extremely difficult to use, accept, and work with cryptocurrencies. To overcome this, many crypto exchanges are now using stablecoins as their default storage medium. Stablecoins are essentially a kind of fiat currency that has the potential to stabilize value and make it easier for investors to buy and sell crypto-assets.