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Are Bitcoin and Cryptocurrencies an Attractive Investment?

Recently with the COVID pandemic, several people have needed to look for alternate forms of income and investments. With the stock markets entering bear market territory within the first few weeks of the pandemic, it was apparent that investing in equities might not be the right fit for everyone. This is where cryptocurrency comes in.  This is a volatile market with the potential for massive monetary gains.

With the possibility of gains comes substantial risks, and therefore a possibility for loss. The stock market is known for its investment potential. Many financial institutions are available to help decide where to invest your money for optimal return. One can begin their stock market journey through a bank, but starting to trade through an exchange can happen instantly, where users can freely trade, 24 hours a day 7 days a week.

Stock market investment

What is an investment? It is generally a choice of where to put one’s time or money. From this definition, there is potential for growth without further work from the investor. While trading in the stock market, there are two methods for receiving a return. The first is via dividends, where a company will pay a small percentage of your investment back to the investor, leading to a small trickle of passive income.

Dividends may vary by year, and may even remain constant over a period of time.

The other method is to buy low and sell high, which is the most common method of investing or trading. To be successful, one needs to accurately predict the future market value of a particular asset. Once the market value has increased enough, the stock is sold for its respective worth. Generally, stocks increase in value slowly over many months, and investors experience a steady return, but there are exceptions. With cryptocurrency trading, we can expect quicker returns due to comparatively higher volatility.

Crypto investments can provide outsized gains

If you want to have full control of your investments, crypto trading is the preferred method. Why is trading in a volatile market such a big lure for many investors? Volatile means that the potential loss and gains are generally large, which means that an investor can make a lot of money over a short period because the market is consistently making large fluctuations. The large fluctuations that are seen monthly in the stock market happen weekly, if not daily, in the cryptocurrency market. 

Where can you put your investment to retain its value? As with banks or brokerage houses, when you sell your stock, it can be converted into a national currency that has a nearly consistent value. While you generally trade one coin for another, how do you know that the coin you acquire will keep its value?

This is another reason for volatility when you invest in cryptos. You need to trade within an exchange that you can “cash out” from or withhold your money and protect them from fluctuations of the market.

Outside of these specific exchanges, what does everyone else do to maintain their trading value in this volatile market? The answer is stable coins- these are coins within the market that often hold their value over long periods. The most widely-known stable coin is Tether.

Crypto investing is based on the high-risk high-return principle

So, is cryptocurrency a solid investment? Yes, cryptocurrency today is a good investment with various stable coin options available. Without stable coins, cryptocurrency could still be a viable investment option. With stable coins, trading between more volatile coins and stable coins gives investors the most security for holding their gains.

There are many exchanges all over the world, all with their pros and cons. The issue with many Canadian exchanges is the limit of what kind of coins you can trade within the exchange itself. Suppose an investor wants to trade among all the altcoins available.

In that case, they will need to transfer their coins to a different exchange that allows for a different selection of altcoins available for trading. The issues here are the exchange fees and lack of security, therefore depending on where you are transferring your coins to, it is essential to know which exchange is best for you and your investment needs.

Coinsmart is a leading crypto exchange in Canada

Not all exchanges offer options for stable coins and only a few exchanges within Canada provide top-of-the-line security, customer support, and a wide variety of coins. CoinSmart delivers the perfect combination of coins, all within the same exchange. They offer coins with the possibility of large gains and losses to one of the most valued stable coins, Tether.

With these combinations available all within one exchange, an investor can trade directly from, for example, Litecoin to Tether with only one round of trading fees to move your investment from a volatile coin to a relatively stable one. Doing so avoids the fees of pulling your investment from the market, allowing you to get the most worth from every trade and investment.

So take a hold of your investment today and start trading with CoinSmart.