When it comes to investing, there are a few things everyone should keep in mind no matter what markets you’re involved in. For example, you should never put all of your money into one area. Likewise, you shouldn’t just hop straight into one industry and hope for the best. Investment strategy takes research, experience, and a careful eye on trends impacting the market.
With cryptocurrency emerging as one of the most promising areas for investment, these pillars of sound money management apply. With so many questions surrounding what crypto holds in store this year and beyond, the best place to watch for clues is in the trends surrounding the market. Let’s review seven trends in particular that look to be a huge impact on crypto in 2021.
A Crypto Crisis? It Might Be Coming
From the start of the crypto boom, traditional-minded investors warned bullish newcomers that a crisis was all but certain. As we’ll see in the other trends below, crypto investing is still a very new practice. For that reason, it’s likely to cause some problems as it finds its way among the other markets.
From environmental concerns to risky investments strategies, crypto investors need to be careful as they maneuver around this market. Below, we overview insights that can help you plan for whatever is ahead.
Crypto Transactions Costs are On the Rise
If you’re new to crypto, then you’re not alone. Over 21 million people invest in some form of cryptocurrency and that number continues to rise. Also on the rise: the cost of trading crypto.
Many trading companies and apps are seeing the rise in investments as an opportunity. As they watch dogecoin price levels rise to new heights, companies see opportunities to raise fees on transactions within their platform. There are transaction costs for any form of trade, and crypto is sure to see a rise in fees in the coming months. It shouldn’t deter you, especially with the money that you can make in crypto trading. Rather, it’s just something to keep an eye out for on your chosen trading app.
Data Leaks and Hacks in Crypto Trading Also Grow
Likewise, another area we’re seeing an increase in activity is the practice of cybercrime as it relates to cryptocurrency investing. Here’s the gist: a digital currency and trade market is going to have increased risks associated with sensitive data like bank information and personal data. Here’s the best way to keep yourself protected.
Utilizing an email account only for crypto activity and keeping a unique password for this account is crucial. Likewise, stick to well-established apps and websites when making transactions. It goes without saying that all your info should be yours only, so don’t share with others online.
Crypto Will Fall More in Line with Traditional Trading
For now, crypto feels like an uncharted land full of eager but aggressive explorers. As more time goes on, we’ll see strategy for crypto investing fall more in line with traditional trading pracitces.
Crypto investing strategy shouldn’t look that much different than other markets in your portfolio. If you’re wondering “Wait, what other markets in my portfolio?”, then you just found a great place to start with rethinking your approach to cryptocurrency. Diversify!
Regulation is on the Rise
If you’re someone who came to crypto trading because of the lack of regulations, then you’re in for a rude awakening. More and more countries are looking to increase regulation and taxation on cryptocurrency activity in the coming months. There’s a good chance places like the United States and other major nations make these changes in 2021.
Don’t panic; simply ensure you are fully educated on the new changes when they come. Crypto is still worth investing in, it’s just going to be a journey of changing regulations for the coming years.
Beware Crypto Harbors
The rise in crypto regulation chatter is leaving some to wonder if they should move their assets into an offshore crypto harbor. In short, this is a bank in another country with few financial regulations and taxes.
This might not be the greatest idea at the moment because many are setting up scams to trick worrisome traders. Play it cautious and assume you’re not going to need to dump your cryptocurrency into an offshore account.
Despite These Risks, The Best is Yet to Come
These trends aren’t meant to scare you. If anything, they should assure you that the crypto market is here to stay. There’s immense potential in this market, and it’s yours for the taking. Making sound investments and keeping a cautious eye on the latest trends will take you a long way in your cryptocurrency journey.
