The crypto market is currently in a short-term bearish cycle. Cryptocurrency rates are under pressure from a negative macroeconomic background, continuing high levels of inflation in Europe, the United States and a tense geopolitical situation in the world, including in the Asian region, where an escalation of the conflict between China and Taiwan is possible, which will affect the supply of microchips.
Now the main emphasis of market participants is concentrated on the search for those assets that have fall in price, which will then show significant growth. Of these assets, I would single out Cardano, Ethereum as long-term investments for 1.5-2 years. Both coins are associated with blockchain systems focused on building decentralized applications, and this area continues to grow. So far, its growth has been constrained by the lack of scalability of the existing blockchain systems on which they run, but these problems are expected to be resolved soon. In addition, the number of cryptocurrency users is growing and the number of user-friendly applications is increasing, without which the growth of the decentralized applications sphere is also impossible.
If we talk about more complex instruments, then I would mention the staking of the algorithmic stablecoin USDN – now this is one of the most profitable and fairly liquid offers on the market with an APY of about 37%. There are certain risks, such as a depreciation of the USDN, which, in my opinion, if it happens, it will be temporary. But in general, this investment product deserves to be included in the investment portfolio in order to diversify the sources of profitability.
Risks
Now for the crypto market, the main risk lies in the macroeconomic field. If the very fears of investors regarding rising inflation continue to come true, then the high-tech sector, followed by cryptocurrencies, which are highly correlated with it, will continue to fall. And it can last until mid-summer 2022.
Thus, now, even if the price of ETH is less than $3,000, an investor who invests in this asset can receive losses rather than income in the short term. It is possible that bitcoin will fall to $30 thousand, and ETH to $2.3 thousand. But these are cryptocurrencies, which means there are no clear and accurate forecasts here.
If you do not decide to enter the asset, you can miss the moment of a successful entry. In order not to miss the moment, and not to make too risky a bet, investors evenly enter the asset, making a purchase, for example, every week for a certain amount. This will allow you to average the price of an asset, which either becomes cheaper or rises in price.
Coin Top Secret does not give investment advice, the material is published for informational purposes only.
Cryptocurrency is a volatile asset that can lead to financial losses.