Things to know when entering the virtual currency market in 2022

The virtual currency market has gone through a period of great development in the past 2 years, but recently most cryptocurrencies have been on a downward trend in value. In this article we will update the new entrants to the virtual currency market in the period of 2022.

The first thing you need to remember is that the virtual currency market contains many risks, like you buy land and encounter unrealistic projects, livestock encounters when the epidemic occurs.

This is the truth, it’s just that the media deliberately doesn’t report it so you just take it lightly, but the virtual currency market always changes in the value of each virtual currency, so you are used to press headlines like : bitcoin bubble about to burst, losing all assets because of virtual money, young people and virtual money dream. This is the truth and you should believe it. However, this is a one-sided view, so those who are empty-handed because of real estate investment, go bankrupt because of investing in agriculture. Everything is still an investment, and investing in anything is risky, even getting married does not know if your future will be happy when you have been in love for 10 years, so don’t tell us that virtual currency is a stupid investment, because many people have made money, and there are even people who have made a lot of money from the virtual currency market.

Stand your ground in the cryptocurrency market

Do not trust anyone in the virtual currency market, knowledge is yours to learn, not listen, do not fomo. In the virtual currency market, there used to be DBZ coin, that project was completely worthless to us, but the group still advertised enthusiastically, as a result the token lost all its value and disappeared. from the cryptocurrency market. Some people even messaged us, and advised us to buy a virtual currency called Raca while it has x600 times, of course Raca is an extremely good project when we initially invest, but when If a project has grown too high in value, you should be rational, and know that even if it has x2 price when you buy it, then it must be x1200 times the price other people buy it and people will sell them off. recently. So rationally look for projects that not many people know but have potential, or simply invest in floor coins, top coins, platform coins with large capitalization but the price still has room for development.

Know how to allocate capital and stay calm

In the virtual currency market we are not allowed to have a revenge mentality when losing, and do not invest all of our capital in any one project. This will help you minimize the risk of losing your pocket, if you hold 3 coins and only need 1 x2 or x3 coin, you’ve already kept your capital, don’t invest all in one project because we I don’t know which token will increase rapidly in value, so don’t put all your money into any one project. No successful businessman pours money into a single project.

Always have the spirit to learn

The last thing is to learn a lot of virtual money, investing is risky, but investing in yourself is the best. You need to know the basics such as viewing project information, testing teams, testing tokenomics, and checking if the project has partners? What problem does the project solve and is it suitable for development now or in the future?

The above are the things we need to pay attention to when we want to invest in the virtual currency market in 2022, but our judgments need to add a lot in the near future. We will update more when we receive your sincere comments.

Things to know when investing in cryptocurrencies

When it comes to cryptocurrencies, everyone thinks about Bitcoin. In fact, Bitcoin is much more widely known than the term cryptocurrency itself. Since its inception, the concept of a decentralized financial system has surprised everyone. So far, despite being in development for just over a decade, a lot of extraordinary things have happened in this space.

As the understanding of cryptocurrencies increased and more people joined, hundreds and thousands of new cryptocurrencies began to form. Some of them failed miserably while many others succeeded and became one of the top digital assets today. Naturally, with such rapid development, people quickly jumped into investing in these digital assets, forming a new type of investment vehicle.

But there are always a few lingering questions on the subject of crypto: Are Bitcoin and a handful of altcoins the only investment options? Is DeFi Really Worth It?

To answer this question, the article will show why Bitcoin and altcoins are not the only and last option. Instead, they are the beginning of a new world of investing.

Cryptocurrencies

If you want to know where you should invest, it is important to evaluate every digital currency available and of course to analyze the top coins. The main reason people are flocking to invest in crypto is because of the high ROI that these assets offer.

Over the past year, Bitcoin price is up nearly 77%, with 1-year ROI at around 161% at press time. Meanwhile, the market plunge on December 4 certainly caused the king of crypto, as well as other altcoins, to drop significantly. In fact, Bitcoin even hit a low of $43,000.

However, if you are wondering why the ROI of BTC is so low, it is because Bitcoin is still trading at a high price at $49,000. Its upward and downward moves continue to maintain a tight structure, keeping volatility relatively small.

Bitcoin price chart year-to-date | Source: TradingView

In contrast, altcoins that do not have high prices have grown rapidly this year. ETH performs really well as the price is up 501.8% and has a 620% ROI at the time of writing. However, that is still nothing compared to the strongest coin of 2021 – SOL.

SOL made a breakthrough in this year’s market after the price surged 13,292%, from $1.50 to its current level of $188.

SOL price chart from the beginning of the year to now | Source: TradingView

The ROI of this altcoin is at a staggering 10.976%, making it the most profitable asset of the year.

Coins like ADA and XRP also did not disappoint, with gains of 793% and 290% respectively, and a return of 789% and 32.8%.

1 year ROI comparison | Source: Coinmetrics

Explosive DeFi also plays an important role in driving their increase in value.

On the other hand, these cryptocurrencies have also received a lot of criticism, largely due to their volatile nature, which many organizations vehemently oppose. The lawsuit between the US Securities and Exchange Commission (SEC) and Ripple Labs is a prime example.

After that, the ban on cryptocurrency mining and trading in China also caused many waves. It hit the entire market hard and it took several weeks to recover. Next, the FUD (fear, uncertainty, doubt) of India’s proposed cryptocurrency bill and its contents also caused a stir in the country’s massive digital currency community.

Besides, volatility is also a concern of many investors.

According to a recent CoinShares survey, the biggest problem investors face is volatility, rather than regulation and accessibility.

Investors’ biggest concerns about cryptocurrency investment | Source: CoinShares

Plus, most crypto investments are still born out of a mindset of wanting quick returns, rather than actually embracing the use cases of the underlying technology that underpins them.

This has led people to consider other forms of crypto investments.

Cryptocurrency companies

There are many blockchain companies that focus on mining for income generation, and also trading on traditional stock exchanges, but backed by cryptocurrencies. Some famous examples are HIVE Blockchain Technologies Ltd., Galaxy Digital, Bitfarms… all of which are mining cryptocurrencies. As a result, their stock successfully grew during the year.

That increase is even comparable to most of the growth of the top cryptocurrencies. HIVE offers 1575% ROI, BITF (Bitfarms) promises 1,166% return, and Galaxy Digital’s GLXY offers 369% return on investment.

ROI of HIVE Blockchain Technologies Ltd. | Source: Blockchain

In addition to established companies, there are also cases of crypto-based companies that use the SPAC (special purpose acquisition company) approach to planning and raising capital as well as becoming public company. Prime Blockchain has over 10,300 BTC mining rigs and 2,600 ETH mining rigs as a recent example. They merged with 10X Capital Venture, with a combined post-merger value of nearly $1.5 billion.

However, people still want to feel the heat of cryptocurrency, but must have the security of the traditional investment path. This has led to demand for a crypto-based exchange-traded product (ETP).

Cryptocurrency-based exchange-traded products

ETPs including exchange-traded funds (ETFs), ETN securities… have always attracted the attention of investors over the years. This year, the demand for ETFs peaked and investors really got what they wanted when the ProShares Bitcoin ETF (BITO) was launched on October 19 amid a spate of litigation between the SEC and Ripple.

Currently, the reason ETFs are so popular is that a) they are approved by the SEC and therefore not prohibited by law, b) it is easier to buy an ETF than an actual cryptocurrency, and c) the policies tax refund. In fact, ETFs only create a taxable event when they are sold.

Furthermore, based on holding period, these ETFs generate long-term capital gains (if held for more than one year) or short-term capital gains (if held for less than one year).

In terms of ease of purchase and tax benefits, GBTC is equally important due to its 401k tax advantage. However, GBTC does not qualify as an ETF. Since it is trust-based, it qualifies as a regulated company. This resulted in GBTC having a limited amount of shares. With a value of $37 billion in assets under management (AUM), it is undoubtedly the largest crypto-backed investment vehicle on the market.

Grayscale Bitcoin AUM | Source: Grayscale

However, even the ETF hype has subsided as the entire market experienced November underperforming. In the first week of BITO’s launch, ETFs brought in nearly $1.46 billion worth of inflows. That number is down 79% to $305 million this week.

Capital inflows into ETFs every week (as of 11/26) | Source: CoinShares

Traditional investment vehicles have been drawing on the hype of cryptocurrencies to propel themselves. Famous companies like Tesla, Square Inc. and MicroStrategy are constantly accumulating Bitcoin and other altcoins to attract investors to their stocks.

Surprisingly, they paid off. All of these companies have had incredible growth this year. In fact, currently, MicroStrategy is the largest Bitcoin holder in the world, accumulating 121,044 BTC in almost a year.

The Real Purpose of Cryptocurrency

However, it should be remembered that the real purpose of cryptocurrencies is decentralization. Bitcoin was created with a mission to decentralize money and the progress over the past 13 years is slowly making it a reality. Cryptocurrency companies, ETPs, and traditional investment vehicles based on crypto hype are proof that we are still a long way from getting there.

Even today, when DeFi is being pushed forward, people still choose the centralized destination. Despite the existence of decentralized exchanges (DEXs), many people prefer centralized exchanges (CEX).

The leading DEX in the market, PancakeSwap, currently processes $4.3 billion worth of transactions per day. On the other hand, the leading CEX, Binance, operates a trading volume of nearly $29 billion in 24 hours.

24-hour Binance Volume at press time | Source: CoinMarketCap

The consistent demand for centralized investment options demonstrated by the sky-high demand for ETPs and CEXs is testament to the age-old mentality of trusting centralized systems only because of their presence. .

Choose the right cryptocurrency

There is no better fit. Each investment option has its own advantages and disadvantages. Traditional and relatively safe options typically have limited growth, while digital assets can skyrocket more than 100% in a single day.

But then, they are susceptible to sudden liquidation, reduced demand, and excessive volatility that causes investors to lose or even lose their capital.

Besides, even as confidence in the decentralized system grows, centralized options will never go out of fashion. Because people always want to have a clearly based system in which to put their money. This is why even investing through a bank is preferred by some.

Thus, to put it simply, risk takers can pursue traditional crypto investment options i.e. cryptocurrencies, NFTs, crypto-based companies.

Safe players who want to get into crypto without taking undue risks can use safer investments like ETFs, GBTC, crypto related companies.

Introducing a software wallet that stores, staking and swaps cryptocurrencies

Nearly every segment of the crypto sector will see explosive growth in 2021. The steady inflow of institutional funds can be interpreted as a signal that the best is yet to come. come.

For new users, figuring out how to earn cryptocurrency can be a tedious task, and the challenge of securing assets beyond exchanges is another hurdle that some investors find difficult to overcome.

Below is a summary of some of the most used crypto wallets, which support multiple tokens and provide users with access to the realm of DeFi, NFT, staking and airdrop opportunities.

MetaMask

MetaMask was initially launched to support the Ethereum blockchain and decentralized applications (dApps). It is currently available as a browser extension and smartphone app.

MetaMask launched in 2016 and has largely benefited from a first-mover advantage to become one of the most widely integrated and popular wallets, and one of the few to support nearly every network. blockchain grid.

Fast-forward through supported networks, a platform that provides a list of networks that are compatible with the Ethereum virtual machine (EVM) and instructions on how to add any of the listed networks to their MetaMask wallet, showing hundreds of blockchain network supported by MetaMask, including many leading smart contract competitors.

Currently, MetaMask supports Avalanche, Fantom, Binance Smart Chain, Polygon, HECO Mainnet, Optimism and Arbitrum, and users can easily use different bridges to transfer tokens between supported networks.

MetaMask has also integrated a swap feature directly into the wallet to give users access to an aggregated list of decentralized exchanges (DEXs). According to data from Dune Analytics, the daily swap volume on MetaMask swaps has been steadily increasing throughout 2021.

Daily MetaMask Swap Volume | Source: Dune Analytics

The increase in swap volume also comes along with rumors that MetaMask will eventually issue a token of its own and many users are expecting an airdrop.

Phantom

Phantom is a popular software wallet and browser extension available to Solana network users.

Similar to MetaMask, the Phantom wallet has a built-in DEX that allows users to perform swaps directly in the software, thus avoiding the risk of connecting to a scam website or paying gas fees to transfer funds from the wallet to an exchange. is different.

Rumor has it that Phantom may launch its own token and airdrop part of the supply to early adopters. However, so far, this is pure speculation and has not been mentioned by the developer.

The wallet also features NFT tracking and users can also trade with the available NFT markets.

Similar to other wallets, Phantom users can stake Solana (SOL) without transferring assets. Recently, the team announced a partnership with MoonPay, which will allow users to use fiat currency and credit cards to purchase tokens within the Solana ecosystem.

The project is also developing smartphone applications, allowing users to access the Solana network directly from their smart devices.

Keplr

Keplr Wallet is the first inter-blockchain communication (IBC) wallet and browser extension for the Cosmos network, allowing users to store and access tokens within the ecosystem.

It currently supports more than 15 networks including Cosmos, Secret Network, Kava, Crypto.org, IRISnet, and Persistence, and the team regularly adds support for new chains with several projects currently in beta access.

Supported token holders can stake their holdings directly through the Keplr wallet and the app works on Android and iOS devices.

Currently, there are no rumors about possible Keplr tokens or airdrops for users, but the crypto space is always full of surprises. If Keplr integrates popular features such as its own swap interface or an NFT marketplace, there is a high chance that there will be a native token.

Bitcoin is the least eco-friendly while Stellar is the green coin

Cryptocurrency mining and environmentalism in general don’t go hand-in-hand in conversations about the evolution of the blockchain industry, a tweet from Elon Musk is enough for the crypto community to start worrying about what’s going on. What Bitcoin miners and proof of work (POW) are doing to the planet.

The Forexsuggest investigation studied several cryptocurrencies and measured their pollution levels, calculating estimated carbon emissions and the amount of resources needed to combat their impact.

In the report, Forexsuggest pulls data from Statista, Business Insider India, Laptop Mag and other sources. After aggregating, they calculated the carbon footprint and the rate at which those emissions rose.

The least eco-friendly cryptocurrencies

As expected, Bitcoin and Ethereum are the two most polluting networks on the planet, they also have the most concentration of hashing power.

The 3 least eco-friendly cryptocurrencies | Source: Forexsuggest

In 2021 alone, Bitcoin emitted about 56.8 million tons of CO2, 2.5 times more than Ethereum. According to Forexsuggest estimates, about 284.1 million trees are needed to neutralize all the pollution emitted by Bitcoin miners.

While Ethereum is much less polluting, it isn’t as good: Ethereum miners have generated 22 million tons of CO2 this year, requiring nearly 110 million trees to counteract its effects.

With Bitcoin Cash, a fork of Bitcoin in 2017 with the goal of mining larger blocks (resulting in a more polluted network), comes third on the list with 1.5 million tons of CO2. However, it is the network with the highest annual increase in emissions, increasing pollutant emissions by 748%.

Graph of Cryptocurrencies with the Most Increased Pollution | Source: Forexsuggest

Research reveals that Bitcoin mining has reduced pollution levels by 5%, possibly after miners left China and moved to countries with greener energy sources, such as the United States. .

The most eco-friendly cryptocurrencies in 2021

But the crypto industry also has green alternatives. And hard to believe, they are less popular tokens when compared to energy-intensive cryptocurrencies.

The 3 most eco-friendly cryptocurrencies | Source: Forexsuggest

The third place on this friendly list is occupied by Nano. This cryptocurrency is non-mining and is not based on blockchain but on block-lattice technology. Nano can process about 125 TPS with only 0.000112 kWh per transaction, which is the minimum CO2 emissions.

The second most effective coin is IOTA, another network that does not use blockchain but uses Directed Graph Open Circuit (DAG) technology with probabilistic consensus. It requires about 0.00011 kWh per transaction.

According to the research, the most eco-friendly cryptocurrency is Stellar, a competitor to Ripple that claims only 0.0003KWh per transaction, which is only a third as much as IOTA. Stellar requires 0.00072 oz CO2 per transaction. This is almost nothing when compared to 1,060.5 lbs of Bitcoin per transaction.