Cryptocurrency is getting better every day. It keeps increasing your wealth just like your viral social media posts. An infectious financial tool for a good portfolio and growth catalyst. One interesting fact is that there are more than 5000 cryptocurrencies.
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2021 was a fantastic year, but where to next?
Let’s zoom in on the situation here. Both Bitcoin and Ethereum have touched a higher performance bar. Long-term investors rely on it. By the time you read this article, there could be more great cryptocurrency news. I will try to present here the future possibilities of cryptocurrency.
New regulations are currently in effect. They are under the carpets. Measures are in place to reduce the risk of cybercriminals. The purpose is to make this investment a safe tool for people. For example: China announced in September that all cryptocurrency transactions are illegal. Clear regulations will remove all obstacles to make trade safer.
How will the new regulations affect investors?
It will be easier for the tax administration to monitor tax evasion. Investors can transparently keep records of transactions. For example: recording any capital gains or losses on cryptoassets will be easier. On the other hand, a fluctuating market will also affect the price of cryptocurrencies.
ETF approval – an important factor to consider
Bitcoin ETF debuts on NYSE. It will help investors to buy cryptocurrency from existing investment companies. Due to the growing demand, the stock and bond markets are also dealing with it. Let’s look at it from an investor’s point of view. Easier availability of cryptocurrency assets helps people to buy them without any hassle. If you plan to invest in a Bitcoin ETF, keep in mind that the risks are the same as with any other cryptocurrency. You have to be willing to take the risk. Otherwise, it’s a waste to invest your money.
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What does the future hold?
Bitcoin is the best in the crypto market. It has the highest market capitalization rate. In November 2021, its price increased to $68,000. In October, the exchange rate was USD 60,000, and in July it was USD 30,000. There is a wide fluctuation in market rates. Experts suggest that the market risk for cryptocurrencies should be less than 5% in the portfolio. When we talk about short-term growth, people are hopeful. Bitcoin price volatility is a factor to consider. If you want to play long, short-term results shouldn’t affect you.
Looking at it from an angle to increase your wealth is not a good decision. Stick to traditional investment tools other than cryptocurrency. For example: if you want cryptocurrency as a savings tool for your retirement, it’s time to rethink your decision. Keep your investments small and diversify them. This will reduce the risk factor. At the same time, you will have more time to think about cryptocurrency.
It is necessary to spend money wisely and then invest in cryptocurrencies. It is necessary to assess the risk factor associated with it and make a decision. I hope this article helps you.