Which Cryptocurrency is Worth Investing Despite Price Volatility?

Investment opportunities are no longer limited as people see great potential in digital assets. However, it comes down to making the right choices by selecting the best cryptocurrency to invest in. A factor that counts a lot in making this decision is the volatility of the cryptocurrency(bitcoin). It is well-known to everyone that the cryptocurrency market is not stable and faces sudden price changes that can sometimes incur a great loss to investors.

Bitcoin is famous all over the world as is thought to be the first option for investment. Platforms like bitqt.io are making it easy to trade in bitcoin. However, BTC is extremely volatile. Thus, we move on to the next best option which is comparatively less volatile i.e., Ethereum.

Factors to Consider Before Investing

When COVID emerged in 2019, it dealt a serious blow to the economical world. Cryptocurrency also faced devaluation in the disastrous year and many coins are still struggling to make their way back up. In such times, it becomes even trickier to make the right choice.

You shouldn’t only pay attention to the current rate of cryptocurrencies but also look at other factors because the price is the most volatile factor of cryptocurrency. You would have observed drastic changes in the price of the virtual coin but on the contrary, these factors prove to be much more stable:

Market Capitalization

It is the value that is assigned to all virtual coins of a particular cryptocurrency. A high market cap would indicate that there are a large number of digital coins in an active transaction. Thus, it implies that many investors are showing interest in this cryptocurrency.

Liquidity Level

The level of liquidity tells how fast you can sell a cryptocurrency at market price. If the liquidity level is high then it implies that you can sell your cryptocurrency at a market price quick. The most popular cryptocurrencies, like Ethereum, have a high liquidity rate. The trading activities on a cryptocurrency exchange indicate how many transactions are conducted with a specific period. This indicator will help you see how many traders are demanding the particular virtual currency.

The three golden rules to minimize your risk while investing in a cryptocurrency is:

• Diversify your investment
• Do not blindly trust a source of data
• Learn and observe

Ethereum – Why is it Worth Investing?

Ethereum is the silver to Bitcoin’s gold and it is different from BTC in many aspects. Ethereum is a practical approach to smart contracts that are used by many projects to ensure a digitalized transaction. The currency value is also expected to increase because the demand for its blockchain and functions is increasing and unlike BTC there is no deficit of the asset.

A major role in the failure or success of this currency depends on the upcoming updates and the quick implementation of the proof-of-stake algorithm. Furthermore, the price of the currency can be affected by the approval of regulatory organizations and community decisions to de-list ETH from the Altcoin list.

Ether is the token that runs on Ethereum platforms and applications. It is like a vehicle for moving around an Ethereum platform and developers that are looking forward to running or developing applications inside Ethereum use it. These days’ investors use Ether to make purchases of other digital currencies as well. It’s not been a long time since the launch of Ether; it came into the market in 2015 and soon became the second-largest digital currency in terms of market cap after bitcoin.

As mentioned above, Ethereum plans to use the proof-of-stake algorithm instead of the proof-of-work algorithm. It is a big advancement for the currency and it will help the Ethereum network run itself with minimum energy that will improve its transaction speed. As the name suggests, the proof-of-stake algorithm allows the users to stake their ether on the network. The entire process will help you to secure the network and process the transactions.

Conclusion:

No doubt you have an open-handed option to pick any cryptocurrency to invest in but remember to work with reliable and authentic exchange services and diversify your options. Another tip for you would be to include virtual coins in your assets while the top currencies like bitcoin and Ethereum are still hot for investment.

 

For More Cryptocurrency News , Visit Here : https://www.chiangraitimes.com/learning/cryptocurrency/