As the crypto market currently faces a decline many are dumping risk assets, so could now be a good time to mine and invest?
Research from Traders of Crypto earlier in 2022 revealed the most profitable cryptocurrencies as being Ethereum, Verge, and Dogecoin.
Interestingly, the three cryptocurrencies identified as the most profitable earlier this year are still trading but at a largely reduced rate.
The question is, should we be investing in crypto now?
Of course, the main difference here is that the crypto industry lacks that fundamental regulation and can therefore be a riskier investment.
If you are looking to invest within the current market, here are three top tips from the experts at Traders of Crypto:
1. Crypto mining
By mining you can earn a cryptocurrency without having to invest your own money. However, to be competitive you probably need to spend a lot of capital on a mining rig or tech equipment, also the electricity use will be high which currently is not ideal.
2. Invest small
As this is a risky investment try to invest a small amount of money and watch it closely on a regular basis. Don’t ever invest what you can’t afford to lose. Investing small and often is referred to as DCA (Dollar Cost Averaging) in the US. The idea is that you put a little aside every week or month on a regular basis.
Sometimes you will get a great price and other times a worse price, but it could average out over time. At this moment crypto prices are low compared to how they may be at the next cycle peak, although as the market is unstable when this peak will be is uncertain.
3. Understand the market
Like with any investment, be aware of the market and get to understand what exactly is happening at the moment, this will ensure you are making a decision based on knowledge which will mean you understand the level of risk involved.
Antony Portno, Managing Director at Traders of Crypto comments on the story so far and the future of cryptocurrency:
“Some say the latest crash is down to the US Federal Reserve (the Fed) increasing interest rates in an attempt to fight inflation, which has encouraged crypto investors to dump any risk assets.
The effects of the increase which took place last month then led to Celsius freezing withdrawals and transfers, and Coinbase laying off 18% of its workforce. Shortly after these events, BTC (Bitcoin) was down 13%. However, there is evidence to suggest that BTC were actually unstable back in February of 2022 when BTC traded at just $40,735.49 as opposed to $44,000 earlier that month.
Although media coverage is currently focusing on the crash, it seems they should really be focusing on providing advice for investors and encouraging better regulations to be implemented for the market.
Overall, this situation is similar to the early days of the stock market back in 1920 which was highly unregulated and fragmented but now is a highly regulated industry. This leads us to believe that the future for crypto is better regulations for investors and traders alike. After all, although the market is down it is still estimated to be worth $890 billion.”