Crypto has been generating a lot of investor interest since the beginning of the year. Decentralized finance, NFTs, proof-of-stake and other industry-related concepts have by now become mainstream.
What about crypto investment? In 2021, does it make sense to buy Bitcoin or altcoins like Ethereum? We will be answering this question in the post.
Did You Lost Your Chance or Is 2021 Still the Right Time?
If you are getting into crypto with Bitcoin at over $40,000 and Ethereum hitting over $3,000, you might be wondering whether it makes sense to allocate new tokens.
In short, investing in crypto is still sensible. In fact, most experts believe the market is far from hitting its peak. JP Morgan analysts expect Bitcoin to hit $130,000 by the end of the year and the release of ETH2 could drive Ethereum prices to $20,000 by 2025.
At the same time, there’s a lot of investor interest in DeFi and the large-scale applications of blockchain and crypto. We can use crypto to buy goods and services such as ekrona software, for loans as collateral, as a way to support activism and promote noble causes, and in many other ways.
Factors to Consider Before Adding Crypto to Your Investment Portfolio
If you are considering crypto investments, take some time to research the market. Here are a few factors to consider when choosing profitable crypto assets and building a secure tech infrastructure.
1. There’s market volatility
Since crypto is a younger market than stocks or valuable metals, there’s more volatility.
To invest successfully, you need to be ready for occasional price dips and wait patiently until the market goes back up.
2. There’s a degree of hype-induced misinformation
FUD (short for “fear, uncertainty, and doubt”) is a pain point for crypto. It’s common for media and forums to spread misinformation out of fear or poor understanding of how crypto works. To make sure you are not swayed by outdated or false news, stick to reliable crypto sources, such as:
- Credible influencers: Vitalik Buterin, Roger Ver, Tim Draper, and others
- Official websites and blogs of top altcoins – Litecoin, Ethereum, Ripple, Cardano, and others.
While there’s no harm in using forums like Reddit, you should take everything written there with a grain of salt and have a habit of fact-checking info before using it for decision-making.
3. Security in crypto is everything
Since crypto is a fully digital asset, you definitely want to protect it and make sure no one can access your wallet. To ensure the security of your crypto holdings, follow these helpful tips:
- Keep your assets on a cold wallet (with no access to the Internet).
- Don’t hold tokens on exchanges and transfer them to crypto wallets as soon as possible.
- If you want to mine PoW coins like Bitcoin, do a background check for crypto pools and make sure you join reliable miner communities.
- Use VPN, password protection, and security software to up the ante on investment safety.
Should You Invest in Bitcoin or Ethereum is Better?
While you might have expected a straightforward answer, there’s none. Bitcoin and Ethereum serve fundamentally different purposes: as such, people buy them with different goals in mind:
Investing in Ethereum makes more sense when:
- You believe in smart contracts and want to support the network.
- You want to back a project with a wide range of applications (just recently Ethereum blew up after the start of the DeFi and NFT booms).
- You prefer PoS over PoW and see it as the consensus algorithm of the future.
- You want to mine Ethereum and then stake it on Redot, Binance or Kraken.
Investing in Bitcoin is reasonable if:
- You want stability. Bitcoin is a first-mover and the equivalent of digital gold – over the years, it’s become the poster face of crypto. A lot of investors believe that, for as long as there will be cryptocurrencies, so will BTC be going strong.
- You want to make relatively risk-free investment decisions. Investor interest in Ethereum is not a one-time fad. Large-scale financial institutions like JP Morgan and corporations like Tesla have investment funds in BTC – it makes sense to follow the same trajectory.
- You believe that PoW is a more secure consensus algorithm than PoS.
Alternatively, you can hold both Ethereum and Bitcoin – this way, you’ll be winning no matter which one goes up.
Seeing crypto prices go up it’s natural for investors to wonder “Why didn’t I do it before?”. However, rationally speaking, the crypto market is far from reaching its peak, so it makes sense to jump on the bandwagon in 2021.
Before you invest, take some time to narrow down a list of coins to buy, choose a reliable wallet to store crypto, and shortlist reliable sources that will keep you posted on the updates of crypto projects.