Technology / Internet
The latest risks & opportunities in the cryptocurrency market
28 Apr 2022 at 11:20hrs | Views
The cryptocurrency markets never stand still. For some, that is their greatest feature, but for others, it's what stands in the way of mass adoption of alternative currencies. What are the latest risks and opportunities in the crypto space, and how does the changing landscape affect all the major players? What do business owners, individual traders, bitcoin holders, banks, consumers, governments, institutions, and everyone else stand to gain or lose from the ongoing changes in the alt-coin segment?
Particularly from the point of view of everyday trading and investing enthusiasts, most of the news is good, but there are a few negative aspects too. With respect to each of the key participants, what types of opportunities are ahead in 2022 and beyond? Here's a short summary of how bitcoin and other alt-currencies stand in the eyes of multiple buyers, regulators, holders, traders, and investors.
Business Owners
Merchants are facing a win-win situation with respect to new digital forms of money, like Ethereum, bitcoin, and others. They not only gain from the speed of transactions but don't have to worry about chargebacks, those pesky returns that often happen with credit card, debit card, and cash customers. Some digital banking trends in the US as well as crypto's blockchain in general are uniquely designed to support privacy and not allow chargebacks. Once a transaction is done, it's done. There's no reversing it. As more merchants begin to accept alt-money as a legitimate form of payment for goods and services, they speed up their cash flow cycle and gain customers who prefer to have multiple ways to pay.
Traders
Trading crypto in the 2020s is turning out to be an exciting and sometimes very profitable affair. As of the second quarter of 2022, bitcoin's price stands at about $41,500, which is on the better side of the year's range, which has swung between $37,00 and $45,000. However, as all cryptocurrencies are prone to do, bitcoin (BTC) has experienced some very rapid rises and falls in value since January. Whether you're engaged in cryptocurrency trading in South Africa, Europe, Asia, the US, or anywhere else, the universal nature of alt-money makes it the only truly international currency.
Many operate part-time businesses as BTC traders via their favorite brokerage platforms. As Q2 proceeds, expect more traders to join the ranks of everyday buying and selling from home. The trend is supported by lucrative price swings in both directions, from which short sellers and others can earn hefty profits as long as they can make relatively accurate predictions about where values hit bottom and reach peaks.
Bitcoin's Ups and Downs
Bitcoin is unique among its competitors in that the coin was the first and is still the most capitalized of all. Since 2009, prices have swung wildly and there are things to watch out for but it always seems to follow the same general pattern of setting higher highs and higher lows through each cycle. The great unknown is how long a cycle will last. For long-term investments, however, BTC has incredible potential.
Keep in mind that some people prefer to play the short game of either scalping intra-day moves on the coin or trying to catch run-ups after declines. Guessing and timing bottoms and tops can be an exciting and profitable endeavor. But for those who want to bolster retirement accounts or augment their buy-and-hold portfolios, BTC can be a wise addition to an otherwise balanced collection of securities.
Governments and Regulation
If there is one giant question mark in the future of cryptocurrencies' success, it is government regulation. European, US, Australian, and South American governments are in the midst of crafting legislation that will cover a wide swath of digital currency activities, including taxation, savings, anonymity, and more. It's nearly impossible to predict what one or another government will do or when particular legislation will be enacted into law.
Consumers
Consumers like to have choices. That principle is especially true for online shoppers who often wish to remain anonymous by using alt-coins to pay for goods and services. During the past few years, hundreds of major online and brick-and-mortar sellers have added bitcoin and Ethereum to their payment lists. For the top coins, consumer use is up but not rising as quickly as it is expected to between now and 2030.
Individual Investors and ETFs (Exchange Traded Funds)
For individuals who prefer to invest the old-fashioned way, there are already a few options in the ETF markets. At least two ETFs have gained approval, even if they don't track the ups and downs of BTC or other major alt-coins as accurately as they could. But, having the opportunity to avoid direct buying of digital money is a major plus for people who simply want to acquire a financial stake in the potential value increases within the cryptocurrency marketplace.
What's the opportunity for investors? Simplicity in being able to log in to their regular brokerage site, buy ETF shares that are tied to alt-coins, and be done with it. They don't have to open accounts on coin exchanges, acquire BTC, keep special tax records, or worry about storage in hot or cold wallets. Acquiring shares of an ETF is one of the easiest ways to gain a foothold in one of the most exciting asset classes, cryptocurrency.
Particularly from the point of view of everyday trading and investing enthusiasts, most of the news is good, but there are a few negative aspects too. With respect to each of the key participants, what types of opportunities are ahead in 2022 and beyond? Here's a short summary of how bitcoin and other alt-currencies stand in the eyes of multiple buyers, regulators, holders, traders, and investors.
Business Owners
Merchants are facing a win-win situation with respect to new digital forms of money, like Ethereum, bitcoin, and others. They not only gain from the speed of transactions but don't have to worry about chargebacks, those pesky returns that often happen with credit card, debit card, and cash customers. Some digital banking trends in the US as well as crypto's blockchain in general are uniquely designed to support privacy and not allow chargebacks. Once a transaction is done, it's done. There's no reversing it. As more merchants begin to accept alt-money as a legitimate form of payment for goods and services, they speed up their cash flow cycle and gain customers who prefer to have multiple ways to pay.
Traders
Trading crypto in the 2020s is turning out to be an exciting and sometimes very profitable affair. As of the second quarter of 2022, bitcoin's price stands at about $41,500, which is on the better side of the year's range, which has swung between $37,00 and $45,000. However, as all cryptocurrencies are prone to do, bitcoin (BTC) has experienced some very rapid rises and falls in value since January. Whether you're engaged in cryptocurrency trading in South Africa, Europe, Asia, the US, or anywhere else, the universal nature of alt-money makes it the only truly international currency.
Many operate part-time businesses as BTC traders via their favorite brokerage platforms. As Q2 proceeds, expect more traders to join the ranks of everyday buying and selling from home. The trend is supported by lucrative price swings in both directions, from which short sellers and others can earn hefty profits as long as they can make relatively accurate predictions about where values hit bottom and reach peaks.
Bitcoin's Ups and Downs
Bitcoin is unique among its competitors in that the coin was the first and is still the most capitalized of all. Since 2009, prices have swung wildly and there are things to watch out for but it always seems to follow the same general pattern of setting higher highs and higher lows through each cycle. The great unknown is how long a cycle will last. For long-term investments, however, BTC has incredible potential.
Keep in mind that some people prefer to play the short game of either scalping intra-day moves on the coin or trying to catch run-ups after declines. Guessing and timing bottoms and tops can be an exciting and profitable endeavor. But for those who want to bolster retirement accounts or augment their buy-and-hold portfolios, BTC can be a wise addition to an otherwise balanced collection of securities.
Governments and Regulation
If there is one giant question mark in the future of cryptocurrencies' success, it is government regulation. European, US, Australian, and South American governments are in the midst of crafting legislation that will cover a wide swath of digital currency activities, including taxation, savings, anonymity, and more. It's nearly impossible to predict what one or another government will do or when particular legislation will be enacted into law.
Consumers
Consumers like to have choices. That principle is especially true for online shoppers who often wish to remain anonymous by using alt-coins to pay for goods and services. During the past few years, hundreds of major online and brick-and-mortar sellers have added bitcoin and Ethereum to their payment lists. For the top coins, consumer use is up but not rising as quickly as it is expected to between now and 2030.
Individual Investors and ETFs (Exchange Traded Funds)
For individuals who prefer to invest the old-fashioned way, there are already a few options in the ETF markets. At least two ETFs have gained approval, even if they don't track the ups and downs of BTC or other major alt-coins as accurately as they could. But, having the opportunity to avoid direct buying of digital money is a major plus for people who simply want to acquire a financial stake in the potential value increases within the cryptocurrency marketplace.
What's the opportunity for investors? Simplicity in being able to log in to their regular brokerage site, buy ETF shares that are tied to alt-coins, and be done with it. They don't have to open accounts on coin exchanges, acquire BTC, keep special tax records, or worry about storage in hot or cold wallets. Acquiring shares of an ETF is one of the easiest ways to gain a foothold in one of the most exciting asset classes, cryptocurrency.
Source - Byo24News
