Let’s face it: Cryptocurrencies aren’t going anywhere, and the chances are that you already have a few coins in your wallet. If that’s not the case, you must have heard about the success and high rewards related to trading in crypto.
Perhaps you’ve listened to a few people saying that “the window is closed” for making a decent return on your investment and haven’t taken the chance.
What Is Cryptocurrency?
Cryptocurrency is defined as a digital asset that uses cryptography (writing and solving codes) to complete financial transactions. According to StsRoyal, the leading cryptocurrencies are:
A peer-to-peer network enabling a payment system and digital currency.
A smart contract that facilitates the exchange of anything of value.
A fork of Bitcoin that was put in effect in 2017 to scale the underlying technology.
An efficient and independent digital asset used by financial institutions and liquidity providers.
A fast, easy, and secure payment system that is fully decentralized with minimal fees.
Peer-to-peer cryptocurrency based on the Bitcoin algorithm.
Predictions for the Year Ahead
Here are five of the forecasts for cryptocurrency performance this year:
- With more people starting to believe in it, we can expect a boost in the major currencies.
- A few analysts are predicting that, due to governmental changes, many nations will start creating their own digital currencies.
- We can expect to see governments and central banks start embracing digital currencies. This will bring the demand of cryptocurrencies to new heights.
- Analysts believe that the Bitcoin price will reach an all-time high before the end of this year. The value can be expected to reach over $12,000.
The rapid growth of the digital world means that digital currencies are facing the most prominent year yet.
Which Factors Can Influence the Value?
Generally, the value of cryptocurrencies can be determined by their use, supply and demand, and target market. But how do they influence the value?
The benefit of owning the coin adds value to it. How can the currency be used?
Is the use of the token of any value? Having a coin that is solely accepted in a country that you don’t live in would be of no value to you.
Having a partnership with a well-known, reputable company will increase the value of the coin compared to an unknown company or one with a bad reputation.
Do Your Research
A cryptocurrency broker would be able to answer any questions that you may have and advise you about your next steps. Make sure to do your research before starting or adding to your investment portfolio.
Although professionals give these predictions, the importance of research cannot be stressed enough. Various factors contribute to the outcome of investments, only a few of which are listed above. It is impossible to predict the outcome of any investment definitively.