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The market around cryptocurrencies is steadily growing, with a global volume of over $50 billion. And while it’s still an emerging market, it has the potential to become one of the most dominant markets in the world. It’s clear that right now is not too late to invest in cryptocurrencies. In 2022 this idea might seem foolish, but there will be other factors contributing to how expensive these assets are then that might make investing at that time more attractive.
Sometime between now and then, the world will have gone through another economic downturn. This can happen when the world economy is undergoing something of a secular bear market or when it’s in a bond bubble. These are some of the most common times to experience financial crises.
The Cryptocurrency Markets Are Still Growing
The cryptocurrency market volume is only $50 billion, which is small compared to the US and Chinese stock markets, but it’s still 1/10 the size of the global foreign exchange market (which is $5 trillion). And it’s set to explode. There is no way that everyone in the world who wants to get involved in cryptocurrencies will have done so by 2022. This is just the tip of the iceberg. After a few years of meteoric growth, the market is going to slow down. At some point, people will decide that they want to get into cryptocurrencies and not just the next big thing. They’ll want to keep up with the Joneses, and lots of folks will be ready to pump money into this market when it does become more popular.
It Has A Very High Return on Investment
Cryptocurrencies are not just some fringe technology with no real-world application. They have a very clear use case, which is to transfer money quickly and privately without the need for third-party financial intermediaries. Bitcoin has the best rate of return for this use case out there, at about 25% per year. Ethereum is less profitable but still more lucrative than 10-year US treasury bonds and gold. Other cryptocurrencies are profitable as well. There are many ways to invest in cryptocurrency, but if you want a safe and secure way with low risk then nothing can beat Bitindex Prime.
It Is Slowly Being Accepted by The Major Financial Organizations
The Paris-based international organization, the Organization for Economic Cooperation and Development (OECD), is a think tank that brings together some of the world’s largest countries and economies. In 2017, the OECD released a report claiming that cryptocurrencies do not present any kind of threat to global economic stability and are, in fact, worth “close monitoring.” This is an important first step in integrating cryptocurrency into the global financial system.
The key players in the world of traditional finance are also beginning to accept cryptocurrencies, with futures contracts and ETFs being proposed. A few hedge funds have even been suspended for investing in them. It is very likely that the major financial institutions will not fully accept cryptocurrencies until after they have matured a little bit more, but 2022 will likely mark a tipping point where the financial industry begins to integrate them into their practices.
It Is About Making Smart Investment Decisions
The cryptocurrency markets can also be unpredictable. In the short term, there are factors that can significantly benefit or harm the price of any given crypto asset. These could be anything from a bank’s acceptance of Bitcoin as a valid currency to major corporations accepting cryptocurrencies as payment. In order to make wise decisions, it’s important to keep up with the news and make sure you are always up-to-date on what is happening in the world of cryptocurrencies. There are also a few other essential things to keep in mind when investing in cryptocurrency:
It’s easy to get into the mindset of gambling when investing in cryptocurrency. This makes it all too easy for people to justify investing more money than they can afford to lose. It’s important to invest only what you can afford to lose. There is a difference between investing and speculating.
Nobody Has Seen the Future
The market will more than likely stabilize over the next few years and then gradually slow down. New cryptocurrencies will not be created, and the existing ones will begin to mature and get added to the portfolios of the major financial institutions. The market will become saturated, and there are a few factors that might make the cryptocurrency markets more stable than they are now. There will be a lot more liquidity in the markets, as there are institutional investors that are waiting on the banks to begin trading before they do so themselves. This will also help prevent any more severe crashes from happening because there is less need to sell certain assets.
Final Thoughts
The cryptocurrency market will continue to grow, and the financial industry will slowly start to accept cryptocurrencies as valid investments. Their profit margins are much higher than other assets, and they could offer a good deal of protection against the next downturn in the global economy. It might be worth it to think about investing in cryptocurrencies now before they have matured enough to become part of the portfolios of major financial institutions. If you do decide to invest, make sure you keep up with all the news related to cryptocurrency and understand how these assets work before jumping in.
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