Is investing all about timing the market? Perhaps this isn’t the case for the stock market, but it sure seems to be the case for the crypto market.
Most investors and traders concern themselves with long-term investments. These are usually investments that companies or individuals can hold for more than a couple of years (depending on the performance of the stock). This type of investment works because there’s an assumption that the capital will appreciate over time. Therefore, it’s critical for you to study market trends and historical data before locking in your purchase.
Market timing, on the other hand, is a bit more spontaneous and high-risk. This is mainly seen in cryptocurrency investments due to its volatility. But that means the returns can be much larger as well. This isn’t to say that there’s no analysis involved in this technique—the right timing can be deduced by looking at past data too.
Take Bitcoin, for example. Its prices have ballooned since its inception and public introduction ten years ago. What if you purchased $10 worth of Bitcoin back then? Let’s take a look at what would’ve happened.
What did Bitcoin prices look like over the years?
Would you believe that one Bitcoin was only worth $0.5 back in July 2010? This means that if you bought $10 worth of Bitcoin then, it would amount to 202 BTC today, or approximately $1,612,335.1. Yep, you would be a millionaire!
Source: CoinDesk as of May 22, 2019
Bitcoin has gone through some major ups and downs in the last ten years. Here are the most prominent price fluctuations (USD):
- 2011 – Bitcoin was slowly making itself known and already displayed higher spikes in prices due to the curiosity of both public and private consumers. In June 2011, BTC prices reached a high of $31.91, up from 5 cents a piece in 2010. However, prices dropped back down to $4.62 in December 2011.
- 2012 – The currency was showing a steady upwards incline. Rates were around the $13.5 mark, and a $10 investment would have translated to $450.33. But only a few businesses were accepting Bitcoin as payment at this point.
- 2013 – This year was huge in the Bitcoin industry, as security issues and scams were at the center stage of cryptocurrency news. However, when the Chinese company Baidu started to accept the altcoin as “real money,” the price shot up to a high of $1,147.25. At the end of the year, prices closed at $757.50.
- 2014 – More companies started to adopt Bitcoin. However, prices continued to plummet until the end of the year. Prices closed at $309.87.
- 2015 – Prices mostly continued at the $300 range, but the year ended strong with $413.51 per coin.
- 2016 – Once again, with the influence of Chinese companies, Bitcoin prices spiked and reached the $700 mark. The decreased demand later on in the year made prices close at $638.22.
- 2017 – This was a rollercoaster of a year for Bitcoin! In February, it broke its 2013 record and went on to have a value of $1169.04. With a steady upwards pace, it crossed the $10,000 mark in November and hit an all-time high of $19,783 at the end of the year. Along with several investors and cryptocurrencies being pointed as the cause of this spike, there was also speculation that this was caused by market manipulation.
- 2018 – The rapid price hike was also quick to drop, and in February, Bitcoin amounted to $10,074. Still high compared to its history but had an almost 50% price drop in a matter of months. It continued to plummet to $6,166 at the end of the year.
- 2019 – Bitcoin is continuing to experience a mostly bullish trend for the year and currently amounts to almost $8,000.
Why is Bitcoin (and other cryptocurrencies) so volatile?
Bitcoin prices have been known to fluctuate over the years. Why is this the case? It turns out there are logical reasons as to why the market is volatile.
News can affect the adoption rate
Blockchain technology is still relatively new to the market, and with such a short history, many people are still unsure about how secure it is. Is owning digital currency any safer than Fiat? Will your assets be easily hacked? Then, there’s also news of governments regulating Bitcoin and accepting it as a currency for payments for different goods and services. These bits of good and bad news affect the adoption rate of the coin, and therefore either scare or entice investors, affecting prices as a result.
The future of cryptocurrency is unsure
Who knows what will happen to altcoins in another ten years? They could keep growing, or crash altogether, and the latter is the fear lording over hesitant investors. The general question is, “Why would you put your money on something so risky when there are plenty of other (more sustainable) avenues you can earn from?”
High risk, high reward system instills fear
Some investors like to gamble on such huge stakes, others don’t. While there have been stories of successful cryptocurrency investors who grew their money in a short period, there were many others who were negatively affected by unexpected price crashes. Some don’t like the instability, which again affects the demand and supply that are factored in pricing.
Is it too late to invest in Bitcoin today?
While the price of Bitcoin now is not as low as it was before, it’s probably not a bad idea to still take a shot at investing in it. As of writing, there are only about 17.7 million BTC mined out of 21 million, with an estimated 1,800 BTC mined every day. However, mining isn’t as simple as this as you think.
In an analysis by CryptoCoin Mastery, the Bitcoin reward from mining blocks was previously at 50 coins, and it’s dropped in halves every four years all the way now to 12.5 BTC. In 2020, it’ll drop to 6.25 BTC. At this rate, all Bitcoin should have been mined by the year 2140.
That said, you’re not limited to investing in Bitcoin alone. The crypto business is booming, and other coins such as Ethereum (ETH), Ripple (XRP), and Litecoin (LTC) are topping the charts for promising altcoins you can invest in. As they say, don’t put all your eggs in one basket.
The key to taking the first step in investing is finding a crypto exchange that you can trust. BXB Exchange offers a smooth user experience and a reliable platform right at your fingertips. Sign up today and begin your investment journey!
Female representation in traditionally male-dominated industries has been increasing over the past 40 years. While the progress is slow, it’s still important to recognize the development of this polarizing inclusivity issue. However, gender diversity is a problem that needs to be addressed.
When it comes to blockchain and cryptocurrency, men are generally the target demographic for these industries. Because of the lack of exposure, fewer women are involved in them. That said, it’s high time to expand the cryptocurrency and blockchain horizon to reach out to other demographics as well. Inviting women on board could help both industries thrive in adoption.
Women Might be Better Traders than Men
While the trading industry is mostly composed of men, research shows that women now represent roughly 19% of online traders around the world. Apparently, their brains are hardwired to be better at learning, multi-tasking, risk aversion, and many other tasks relevant to trading. Here’s how:
Women are great students
A study finds that girls get higher grades than boys do at all ages, including math and science. Generally, this implies that girls are more attentive and persistent in school. Eventually, they’ll grow up to develop a holistic approach to learning, which can serve them well in their careers.
Perhaps this quality comes in handy when they decide to expand their knowledge about trading, which can take countless hours to learn and requires a lot of research.
Women have strong intuition
We all know that a woman’s intuition is a forceful nature; just ask your mother…
As an example, it was discovered through a series of game matches on BuySellHodl, a cryptocurrency predictor app, that women are crushing men when it comes to predicting the rise and/or fall of Bitcoin.
The data reveals that 58% of the time, women successfully made accurate Bitcoin price predictions, while men’s success rate stands at 51%. The research also revealed that 16% of female users self-identify as an expert when it comes to their knowledge about crypto, compared to just 9% of men.
Bonus fact: the game’s first and highest winner of $1,000 was a woman.
Women are more bullish
Based on the same research, it says 68% of women were more likely to recommend their friends and family to buy Bitcoin, while 61% of men were a bit skeptical about recommending it. Additionally, 61% of women nominate Bitcoin (BTC) as their cryptocurrency of choice, as opposed to only 48% of men.
This implies that women are more confident about their predictions and currency of choice. It also says there’s a significant number of women who are deeply involved in the cryptocurrency landscape, and that they’re working toward leveling the playing field.
Women are more risk-averse
An eye-opening study years ago found that women were better traders than men. The primary reason being they’re less likely to take many risks because they’re not as overconfident as men. It also found that during a financial crisis, men were likely to sell their shares at all-time lows, contributing to bigger losses, than women.
In terms of overconfidence, the same study suggests it boils down to biology. John Coates, a researcher in neuroscience and finance at Cambridge University, tested male trades’ hormone reactions to workplace judgements and found that testosterone increases during winning streaks. This likely drive men’s appetite for taking risks.
Meanwhile, women move assets less frequently and manage less volatile portfolios, thumping men by an average of one percentage point yearly on a risk-adjusted basis. This means that while women call for safe risks, they’re calculated decisions nonetheless.
Changing the Game for Cryptocurrencies
Trading cryptocurrencies is not just a man’s world. While it’s still a heavily subjugated field, a lot of women are starting to change that. There are a few notable women in the blockchain and cryptocurrency industry who are actively playing the field.
Take Amber Baldet, who worked as a blockchain project leader at JP Morgan Chase cryptocurrency wing. Now, she’s spearheading her own company, Clovyr, which focuses on bringing flexibility and intuitiveness of modern application advancement to the blockchain domain. It’s also worth mentioning that she’s dubbed as the “Madonna of blockchain.”
Linda Xie, co-founder of Scalar Capital, and also former Project Manager at CoinBase, is actively sharing her cryptocurrency investment knowledge in a digestible manner with her Twitter and Medium followers. She knows how the ins and outs of alternative coins and is more than willing to educate people who are new to the cryptocurrency field.
Katherine Wu, former Director of Business Development and Community Management for Messari, an NYC-based crypto startup, is passionate about the cryptocurrency industry specifically form a legal perspective. She shares her musings about blockchain and cryptocurrency on various social media channels and on her blog.
These are only three among the many influential women on the crypto space you should keep an eye on for inspiration and knowledge. It’s women like them who are laying the groundwork for even more women to join the cryptocurrency space without fear. Their active participation contributes to making the industry a more dynamic and inclusive one.
Perfectly Balanced, As All Things Should Be
Gender may have less influence on the trading performance, and there may be other factors to consider; but with the marvelous advantages savvy and adaptable women bring to the table, they’re vital to the growth and development of this industry.
This women vs. men angle isn’t a matter of being politically correct. Like in any industry, balance is always the right approach towards creating a dynamic field for both players. So, it’s time to push for greater inclusion and to encourage more women to learn and give cryptocurrency trading a shot.
Looking to get started with crypto trading? Well, look no further than the BXB Exchange Platform for all your crypto trading needs!
Hedge funds and venture funds are two of the most popular investment methods that use high-risk methods and borrowed money to maximize returns. They have been longtime players in the financial investment scene, and these methods are also being adopted in the emergence of cryptocurrency funds in the market.
Technology has been dominating and evolving people’s daily tasks over the years, so it should not be much of a surprise that cryptocurrency funds are now a thing. After all, the growth of the crypto industry, as well as the rising value of Bitcoin are both desirable to any investor.
Primarily, much like traditional investment funds, a crypto fund seeks to amplify returns through cryptocurrencies or adding new initial coin offerings (ICOs) to the mix. This investment will buy and trade virtual tokens instead of fiat currency; however, the fiat value of the coins dictate the direction of the investment.
The Crypto Investment Fund Landscape
According to Crypto Fund Research, there are 769 crypto investment funds in the global market. More than 50% of these funds are set up as hedge venture capital funds, closely followed by hedge funds, and lastly, private equity or hybrid funds.
Venture funds are now the most common type of crypto investment fund. Tech and crypto companies are beginning to blueprint and start their blockchain funds as well. Blockchain companies who have been in the game for quite some time are beginning to experiment with private equity funds. Hybrid funds were also introduced, which are a combination of investing in cryptocurrencies and ICOs. In terms of behavior, hybrid funds act like venture funds.
How many crypto funds are there?
In terms of crypto fund launches, the industry saw a spike in new funds in 2017, with around 224 openings. It was a big deal for the investment landscape as this figure tripled that of the funds open in 2016, which was just at 53. In 2018, a new record was set of 239 new funds opened. This means that more than half of today’s current crypto funds were opened within the last two years.
This 2019, the projected number of new funds to open is 145. This number could grow to become more significant, depending on the investment trends happening within the year.
Since a lot of these funds opened up fairly recently, it’s not much of a shock to learn that most of them are still relatively small. Around half have less than $10 million in assets under management (AUM). However, there are still several funds that amount to $100 million in assets. Some of the most prominent players in this category are:
1. Pantera Capital
2. Galaxy Digital Assets
3. Alphabit Fund
It’s worthy to note that while crypto funds are slowly increasing in popularity, it’s a long way to go before this dominates the investment scene. All crypto funds combined make up less than 1% of total hedge fund assets.
Where are crypto funds coming from?
The U.S. takes the lead as the country with the most number of crypto funds opened at 372. This is around half of the current total in the market. The top cities are San Francisco and New York. They are closely followed by the countries below, including the number of funds opened:
1. China/Hong Kong: 72
2. United Kingdom: 48
3. Singapore: 45
4. Switzerland: 28
5. Canada: 23
6. Australia: 22
7. Germany: 14
There are 141 funds spread around various countries across the globe, most prominently in Eastern Europe and Russia. It’s worthy to note that the top places where crypto funds exist are cities where hedge fund and venture capital investments are prominent.
What Crypto Funds Mean for Digital Currencies
According to Josh Gnaizda, founder and CEO of CryptoFundResearch, crypto funds peaked in popularity when Bitcoin broke through $5,000. This gave investors confidence to open their funds, inspiring even those who are operating small-scale and with no prior investment management experience. The growth of funds is looking to be optimistic for 2019 and beyond, as the market is new and racking up interest. Surprisingly, lower cryptocurrency prices in 2018 did not affect the performance of crypto funds, as their AUM increased. Many crypto funds are still expected to launch with $100 million assets in tow.
However, volatility is just something you can’t erase from the cryptocurrency industry. Even top-performing coins such as Bitcoin, Ethereum, and Ripple can’t escape the bearish trends that inevitably hit them. This means that, much like any other crypto product, altcoins should remain as a risky but viable investment for traders and companies so they can incorporate more of the blockchain tech in their processes and eventually consumer activities.
Investment schemes will continue to get creative and adopt new methods to earn money. Crypto funds are looking to have a bright future amidst the uncertainty and skepticism that its industry usually deals with frequently. Expect more fintech companies and new players to start investing in crypto funds and the future of cryptocurrencies to remain bright as more people start believing in the applications and use of blockchain technology.
Diving into the fascinating world of cryptocurrency will have you notice that its value is generally considered quite “volatile” compared to its fiat counterpart. The common perception is it has less value since cryptocurrency has no physical form, or that it isn’t technically backed by any commodity to give it value.
The major difference between the two is that cryptocurrencies aren’t supported by any government due to their decentralized nature, despite the fact that money is evolving to no longer having its value backed by physical commodities or “real-world assets,” such as gold in a national bank. Regardless, fiat currencies are still supported by their issuing government body, which helps regulate their value, leaving cryptocurrencies with their volatile characteristic. To better predict their value and assess your risk, you need to know how prices are determined.
How Are Cryptocurrency Prices Determined?
The cryptocurrency market is still a nascent market, and many are still unfamiliar with how the industry works. This kind of market makes it inherently volatile, so it fluctuates quite often.
There is limited liquidity within the market compared to more established traditional economies that include foreign exchange markets. To put things into perspective, the total value of all the money in the world is around $90.4 trillion, with the total cryptocurrency market cap at around $250 billion—that’s a 36,000% difference!
Cryptocurrency trading volumes per day are around the $14 billion mark, while the daily forex trades are close to $5 trillion. This points to a thin market that naturally moves quickly, increasing the volatility of cryptocurrency prices. To help you understand how this works, here are the biggest determinants affecting the price:
1. Supply and demand
The law of supply and demand is a basic economic principle that is considered as the most important determinant of cryptocurrency prices. If a cryptocurrency has a high token supply with little demand from traders and investors, then its value will drop. Conversely, if the supply is limited and the demand is high, the value of the coin will increase.
A cryptocurrency coin must have a strong function or use-case to offer an incentive for owners to hold on to their coins since its utility is strongly correlated with its value. If you use Ether (ETH) to execute commands and develop applications on the Etherium Blockchain, it will be converted into gas and represent the “fuel” for the Ethereum ecosystem. For this reason, ETH is used as a currency within its system to fuel transactions and development. The more people who perform transactions and develop apps, the greater the demand for Ether, which will eventually push prices up.
Scarcity refers to the limited nature of the coins. In terms of economics, a fixed supply of a certain item would increase its value over time, assuming its demand also increases. This creates scarcity since there’s only a limited supply of coins in circulation and certain coins have a fixed maximum supply. Demand will undoubtedly push a coin’s value up, particularly that have great utility. Currently, we’re seeing this happen with Bitcoin, whose market supply is limited to 21 million coins.
4. Perceived value
A coin’s value is dictated by what the markets deem it to be, and how a project is valued is dependent on factors that are core to its development. Therefore, projects that consistently achieve milestones, and have collaborations and partnerships with credible companies or other projects are good signs of expansions. Other factors that can enhance the perceived value of your cryptocurrency includes a successful launch of its minimum viable product (MVP) or beta version of its protocol or software.
Why Do Cryptocurrency Prices Fluctuate (so Much)?
We’ve all been witnesses to how much cryptocurrency prices can fluctuate dramatically. Bitcoin became the poster child for price fluctuation since it was introduced and when it put cryptocurrency on the map during its price surge, hitting its peak value back in 2017.
1. Fluctuation of perceived value
There are many factors at play here, and one of the reasons is the fluctuation of cryptocurrency’s perceived store of value against fiat currency. By design, cryptocurrencies are governed by a decision from its developers of the core technology to limit its production to a fixed amount. This differs markedly from fiat currency, which is managed by governments that try to control its value in line with a country’s economic growth. As economies built with fiat currencies show signs of either strength or weakness, investors can choose to allocate more or less of their assets into cryptocurrency.
2. Security breaches
A cryptocurrency can be volatile when the community exposes security vulnerabilities in an effort to create massive open source responses in the form of security fixes. Coin developers must reveal security concerns to the public, so robust solutions are produced since hacks can drive prices down. It’s only natural that values fluctuate when news about security breaches are released to the public.
3. Bad press
Negative news events involving statements by governments that cryptocurrency is likely to be regulated, bankruptcy, or its use in criminal transactions can scare users. Incidents like these can cause public panic, driving the value of cryptocurrency down rapidly.
4. Rate of adoption
Cryptocurrency’s rate of adoption is rising, along with blockchain technologies around the globe. The market is expected to reach a staggering $2.3 billion by 2021. However, the prices of major coins are falling despite this high rate of adoption. The major reason is risk aversion among investors. The market still isn’t mature enough, and there is a growing concern relating to over-regulation.
At the end of the day, the value of cryptocurrency is dependent on speculation, and this is what’s causing a lot of trades to happen.
This is how speculation works: When someone with a lot of coins sells half his or her stash, the market is flooded with that cryptocurrency. With the supply high, it drives down prices and prompts others to ask: Why are they selling this much coins? Do they know something I don’t?
The bottom line is, the cryptocurrency market is still young and easily influenced by these factors. And with change constant in any industry, cryptocurrency prices are still expected to be unpredictable until there’s a more effective way to see how the trends can be advantageous to your investments.
Once the industry matures, all these elements that cause the prices to become volatile can be addressed. We can have a more precise way to study the trends and have the prescience to invest with less risk than what we have right now.
The good news is, with more risk comes more reward. So, if you’re ready to dive into the crypto trading world, download the BXB cryptocurrency exchange app today!
The consistent technological advancements in the past decade have effectively transformed the way younger generations perform tasks ranging from the mundane to the complex. It has also widened their tolerance and acceptance of trying out “risky” or new things, such as investing in digital currencies.
When blockchain erupted a decade ago and the first cryptocurrency was born, it was met with a lot of skepticism. New currencies emerged, and some even crashed (and resurrected), but these altcoins seem like they’re here to stay. People became curious and more open to studying the world of virtual currencies, and eventually began utilizing them for trading and acquiring goods. In a survey of 1,000 online cryptocurrency investors, it was revealed that 43% of millennials have more faith in the crypto market than traditional stocks.
Now, traders are becoming more and more interested in the world of cryptocurrency investment rather than the traditional stock market, because of the higher potential returns. But how accurate are these claims? It’s time to dive in and discover the similarities and differences between the two.
Crypto vs. Traditional: Which Market is Better?
Most people immediately assume that digital and traditional markets have a lot of differences. While they’re not wrong, they’re not entirely correct either. The two have a lot more in common than you think, and it all boils down to the basics.
1. Baseline function – Both markets operate under the same principle. The demand dictates the prices in the cryptocurrency market and traditional stocks, or how much people are willing to pay to own cryptocurrency or a stock market share. In effect, when people are willing to pay more for a specific product, prices hike up; while prices deflate when no one pays attention to it or more people sell their ownership of the said product.
2. Fiat currency value – The market caps and value of each cryptocurrency is often reported in U.S. dollars, similar to the traditional stock market whose value is still defined by government-issued currencies. There’s a possibility for this to change depending on the success of the cryptocurrency market in overtaking or co-existing alongside fiat currency, but for now, this is its reality.
3. Investment based on value – In either market, investors look at the feasibility and potential of each product. If they find that a particular currency is performing well than others, they could put more money behind that. This is similar to traditional stock market moves where they base the purchase of their shares on trends and behind the growth potential of the company.
Market crashes – Both markets have experienced crashes due to many economic factors, such as the 2018 Bitcoin crash and the 2008 stock market crash. This indicates that both have inherent risks, which are expected in the practice of investment anyway.
Of course, there are stark differences, and this is where the debates come in. The following could either interest or deter you from making your investment decisions in each market.
1. Ownership – In the stock market, purchasing a share means you get to own part of the company. This is unlike the crypto trading industry where you mostly invest on the currency and its value, not the company behind the creation of the virtual tokens—even if the business of the company could affect the performance and price of the coin. However, cryptocurrencies are made to stand alone without third-party factors, something that adds to their unique selling point.
2. Profit – If you invest to earn, then you’ll know why many people are more excited about the cryptocurrency market than traditional stocks—it’s easier to get returns on the former and much slower on the latter. The presents a lot of opportunities for traders, which translates to high earnings in a short time. While this introduces risk, as any investment would, some tools can help you avoid it and achieve your financial goals.
3. Global reach – Bitcoin, the most valued cryptocurrency to date, is globally accepted by up to 180 countries. This makes ownership and investment actions fluid and accessible no matter where you are in the world. The stock market is so heavily regulated that there are a lot of processes and formal accreditations one must file before continuing investments from another place. One way to achieve global reach in the stock market is through a broker, but it’s time-consuming and more expensive than doing it yourself.
4. Trading operations – Trading with cryptocurrency can be done 24 hours a day, seven days a week. The events have a quick impact on the market, which also spells instant earnings if you happen to be trading at the right time. This is not the case with the stock market. Trading sessions are present, which means trading only occurs during certain times of the day and ceases operations during weekends and holidays. This makes crypto trading and investments more updated or real-time than the stock market—useful for studying data or watching trends for the products you’re eyeing.
5. Ease of investment – Starting your journey as an investor in the cryptocurrency market is no doubt faster than the stock market. The crypto market isn’t regulated, which means there are different requirements per country, but they are often basic. There’s also less capital required, and the paperwork is more straightforward and less time-consuming. This could change in the future as more government initiatives are beginning to regulate cryptocurrency activity. This differs from the stock market, which has always involved a lot of paperwork, brokerage, taxes, fees, certifications, and more.
6. Amount of supply – Stocks don’t have a cap imposed on them, but some cryptocurrencies do. Such as the case in Bitcoin, where only 21 million altcoins are ever to be mined. As soon as all of that is circulating, the production of Bitcoin will stop, and it’s predicted that demand will only grow larger and larger. Companies can always add stocks for people to buy, which also means more controlled price hikes or drops in the future.
The Bitcoin Price Crash and Stock Market Crash: Are They The Same?
To better explain the answer to this question, one must know why the stock market and cryptocurrencies crash individually.
Stock market crashes usually point to fear-based actions by the traders and market predictors. The panic of profit loss typically drives this phenomenon, which can result in economic recessions. When stock markets crash, they also slow down the growth of the companies involved as investors would be wary of putting up their money. This triggers a chain reaction of company size-downs, lay-offs, and the like.
On the other hand, the cause of Bitcoin’s price crash is a little bit more unclear. Reports merely say that it could have been other emerging coins presenting more value to crypto traders, which meant a shift in where people would want to make their crypto-related investments.
So, are they the same? Well, yes and no.
The similarity lies in the fact that people will generally invest in something they see more value in, based on reports and trends of past tradings. However, the effects of each market’s crashes are drastically different. Cryptocurrencies and stock markets also work independently from each other, meaning they are not correlated. This means the Bitcoin price could crash and stock markets would be unaffected, and vice versa. Essentially, cryptocurrencies present more choices in investment opportunities for traders.
The Dot-Com Bubble and the Bitcoin Bubble: What’s the Difference?
When the internet was first introduced to the masses, it presented exciting times for people globally. Suddenly, the world seemed smaller, and tons of information was available right at a user’s fingertips. Fast forward to today, and the internet is still playing a massive role in tech businesses, the media, and more.
When blockchain technology gave birth to Bitcoin, it gained a lot of attention, but a little less excitement and more confusion. People couldn’t wrap their heads around a digital currency that didn’t need the backing of banks or third-party mediators for transactions to happen. They thought it wasn’t secure and the fact that Bitcoin isn’t tangible made things all the more difficult for an everyday user to grasp.
Even though there are plenty of companies riding the cryptocurrency wave and also developing altcoins of their own, the truth is, ten years later, the impact of Bitcoin is too small to influence or command change at a global scale drastically. This is what investors and crypto companies are waiting for—and slowly but surely, they are getting there.
High Risk, High Reward
In the industry of trading, you won’t be able to see returns on your investments if you’re not willing to experiment with new vehicles. That’s probably what makes the crypto world so exciting. The age of tech will only grow stronger and potentially dominate many other sectors over the years, and the investment in one of its earliest projects, virtual currencies, show a potential that many millennial traders are noticing.
As different companies and governments launch their digital currencies and explore blockchain technology; it’s soon becoming less farfetched to imagine a world dominated by digital currencies. The industry is beginning to mature, and its flexibility presents exciting times ahead for traders.
The facts above surely gave you a lot of room to consider which investment vehicle you want to put your money in. Just like any venture, it will be your responsibility to study the pros and cons of your financial actions—high risk, high reward.
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It’s only been over a decade ago since Bitcoin, the first ever cryptocurrency, was released to the public. It was met with speculation, skepticism, and distrust as many users couldn’t begin to wrap their heads around a form of intangible money which only exists in a digital wallet.
As the years passed, plenty of other cryptocurrencies joined the mix, and there are now more than 2,500 different kinds of virtual tokens in circulation globally. While initially met with resistance and even labeled as a scam, more and more people were able to understand blockchain technology and how this makes cryptocurrencies a secure alternative to Fiat money.
Fast forward to today—cryptocurrencies have advanced to a point where they are now being adopted commercially. Different countries have embraced existing altcoins, while some even plan to create their own.
Below is a list of countries that have opened their doors to cryptocurrencies and how this decision is benefiting their nation.
Countries Embracing Cryptocurrencies
This Southern European nation is one of the most Bitcoin-friendly countries in the world, as well as a frontrunner in the global cryptocurrency industry. While Malta still primarily uses Euros, they have plans of becoming “The Blockchain Island.”
Their Prime Minister has expressed his goals for the country, stating that he wants Malta to be a trailblazer in the regulation of blockchain-based businesses and be home to world-class fintech companies. This led to the formation of the Malta Digital Innovation Authority (MDIA) in February 2018. The MDIA aims to improve the verification processing for crypto platform users as well.
As a result, a lot of crypto companies are looking to invest in Malta. Binance, one of the top ten cryptocurrencies worldwide, already decided to set up their headquarters in Malta. It won’t be long before other businesses join in, and the Maltese economy will thrive because of these altcoins.
It’s probably not all too surprising to see Japan on this list, as the Asian country is a pioneer and innovator in virtually all things tech. The world’s first Bitcoin exchange, Mt. Gox, is based in Tokyo. The inventor of Bitcoin even had a Japanese screenname: Satoshi Nakamoto.
In fact, Japan was the first country to officially recognize Bitcoin as “legal money” in 2017. By 2018, they had already regulated the cryptocurrency exchange, influencing other countries to do the same. 50% of Bitcoin’s trade volume reportedly comes from Japan in Yen.
The effects of embracing Bitcoin and cryptocurrency will translate into a boost in the Japanese economy and GDP as well. It has already created more jobs and will encourage traders and investors to continue developing this industry.
Estonia is one of the countries that embraced Bitcoin early on. Their government isn’t just open to Bitcoin but various cryptocurrencies and the blockchain technology as well. Things are looking exciting for Estonia as they plan to develop their own digital currency for trading and purchasing goods.
The open-minded approach of Estonia to cryptos led them to further explore the blockchain tech that powers altcoins and apply it to other industries. Currently, they are planning to incorporate blockchain in their health and banking sectors to streamline their government services.
Switzerland, dubbed Crypto Valley, is also famous for cryptocurrency businesses. Shapeshift and Xapo are just two of the top crypto businesses that operate here. The country is all about taking a progressive approach towards cryptocurrency, going as far as approving Bitcoin for utility bills payment and ticket payments nationwide.
The introduction of cryptocurrencies and blockchain technology lead the Swiss government to experiment with the improvement of their financial systems. Voting and banking are the top two sectors currently being revolutionized by blockchain in the country.
Hong Kong is another Asian powerhouse when it comes to adopting cryptocurrencies. It was reported that although China had already banned Bitcoin, Hong Kong is a Chinese administrative country whose attitude towards altcoins is more open.
The Hong Kong government is mainly discussing the implementation of blockchain technology and cryptocurrencies in their financial systems, especially banking. They are also open to blockchain-related businesses setting up their HQ there. The government is very active in discussing the future of altcoin investments to boost its economy and grow its tech industry as well.
Hong Kong is also looking forward to further capitalize on various new blockchain applications, such as cloud storage, messaging, and various other peer-to-peer transactions.
Cryptocurrencies Will Continue to Rise
As time goes on, people are starting to trust cryptocurrencies and understand the gap that they’re trying to fill in the market. It won’t be surprising to find out that the list of countries open to cryptocurrencies will reap a myriad of benefits that will empower its people. Some states are already creating their own altcoins and recognizing them as legal tender, such as the Marshall Islands and Venezuela.
We won’t be seeing the last of digital currencies any time soon. As different industries and countries are continually investing and testing its feasibility, the cryptocurrency industry is bound to grow.