photo 6 When cryptocurrency markets are volatile, investors can take a long-term approach to maximize returns.

When cryptocurrency markets are volatile, investors can take a long-term approach to maximize returns.

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-The global economy has faced several challenges in the past few years since the advent of Covid-19.
-The rise of the global pandemic has disrupted supply chains worldwide, leading to higher production costs worsened by the Russia-Ukraine war, and as a result, inflation has soared to a 40-year high in the US.
-To curb the inflationary pressure, central banks are raising interest rates, affecting the returns on many asset classes globally.
-Several assets are undergoing market volatility, including the S&P 500 Index, which recently fell into bear territory as it dropped by over 20% from its recent high.
-Bonds have suffered, too, and with the looming signs of global recession, crypto markets have also witnessed a downfall.
-Investors are worried across all asset classes as ROIs have significantly dropped, but the impact is higher on crypto due to the volatile nature of the market.
-Investors confidence has taken a back seat as Bitcoins price has plummeted substantially since the beginning of the year, and investors are worried about their future returns.
– However, it should be noted that such high volatility is not foreign to this asset class, as similar cycles of bull and bear in the market have been witnessed historically.
-Still, crypto has eventually emerged to outperform any other asset class.
-There is a rising class of investors who are becoming first-time investors in crypto as they explore faster ways to grow their wealth amidst declining returns in other asset classes such as real estate, bonds, etc.
-But, these investors are now worried about their wealth as the prices have fallen and the sentiments are low.
-However, if we observe historical returns, it is evident that crypto is a long-term game, and those investors who entered early in the space and held on to their investments have gained higher returns compared to any other asset class.
-Although Bitcoin is down from its 2021 peak, it is still 10x higher than it was five years ago.
-Every crypto cycle provides an opportunity for industry players to innovate and develop robust products for the ecosystem.
-The 2018 crypto crash resulted in innovative use cases and blockchain protocols emerging in Decentralized Financing (DeFi), allowing investors to lend and stake crypto assets.
-Similarly, last year the first-ever crypto ETF was launched in the US, providing investors with a new regulated avenue to gain exposure to the asset class.
-The current cycle provides an opportunity for the industry to focus on the infrastructure weakness on the security and compliance side.
-It has been observed that in the past few years, the industry has developed new protocols to ring-fence from recurring scams and hacks.
-Investors can dedicate this phase to their research on projects to make their platforms’ security robust and combat market weakness

photo 6 When cryptocurrency markets are volatile, investors can take a long-term approach to maximize returns.

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