Cryptocurrency Investing: Why Some People Still Believe in Virtual Currencies De

[Adams-Richard]

Cryptocurrency is a much riskier and more volatile investment than most others. Bitcoin, the first cryptocurrency, has frequently experienced sharp price increases followed by sharp declines. However, I can't help but wonder why, given the losses they have already experienced, people are continuing to make investments in cryptocurrency.

As a crypto enthusiast who has already been in the industry for several years, I can only think of two reasons why people are still investing in cryptocurrencies.

The Hodl Mentality

Early adopters who invested in Bitcoin and cryptocurrencies, in the beginning, let's say in 2014 when the price of BTC was around $315 per unit, are still gaining money despite the current price declines. Long-term BTC holdings will be maintained while earning some passive income from those investments.

So if you were wise or fortunate enough to invest in cryptocurrencies even earlier, in 2010, you might be in the company of the Winklevoss twins, who are reputed to be the first bitcoin billionaires.

The Benefits of Dollar Cost Averaging for Bitcoin Investors

Those who made their investments later but are aware of how BTC halving affects the cyclical nature of Bitcoin values. They simply used dollar cost averaging (DCA) to buy Bitcoin during the bear market and then sell it during the next bull market. They have faith in the project's future and are not deterred by the turbulence in the cryptocurrency market.

Back-testing this Bitcoin investment strategy based on past outcomes is one way to assess how well it might perform in the future. You can accomplish just that thanks to a ton of online resources. As a result, you would have increased your investment from $3,600 to $8,570 if you had made a $100 monthly Bitcoin investment during the past three years. That's despite the fact that this year's severe market decline would have destroyed a sizeable percentage of your income.

Of course, you are free to alter any of these options. You could feel more at ease investing $10 per month in Bitcoin rather than $100 per month. Even if you had only put $10 into Bitcoin each month for the preceding three years, you could have turned $360 into $857. In fact, you would have made an amazing profit from your monthly Bitcoin investment over just about any medium- or long-term time horizon longer than two years.

Closing Thoughts

In the simplest way possible, volatility means that your cryptocurrency investments are riskier than your investments in well-established asset types. While many people will continue to view cryptocurrencies as the new standard for trading, it's crucial that anyone who wants to trade does so with knowledge of the hazards involved in the industry. High gains carry a number of hazards.

Consider your options cautiously if you plan to invest in cryptocurrency. Future outcomes cannot be predicted by past performance.  Although I have to clarify that this is not financial advice. These are just the thoughts of an enthusiastic guy who likes to write on the internet. Do your research and don't buy more than you can afford to lose.

[Osama Sultan]

Simply Investing in Crypto in not a scheme which make you rich next week for making money in this highly volatile market you need a lot of knowledge with experience , And your believe is your key to success.
DCA its like a tool to make higher possible profits in next market cycle dont put all your funds at same time buy , step by step .
Third key is put those money that you can afford to lose and then Hold and wait for next bullrun .

[zilzylian]

There are many reasons why Bitcoin has always been an investment choice, namely transparency and security and the absence of third parties.

One can make a payment with Bitcoins and agree on a price range of BTC that they set, P2P is an example, at this time maybe the price is going down, but some investors can hold it or sell it at the price they want, we can see how many Bitcoins are being traded in the crypto market, more Bitcoins are stored in the wallet