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Opportunities and risks ahead for bitcoin traders and investors

Have you been following the cryptocurrency market this year in the hopes of finding an opportune time to enter? If so, you are like many other people who have a gut feeling that cryptos, especially sector-leader bitcoin (BTC), will have a good year. But, before taking on the challenge of this exciting asset class, it's important to find out what the current state of things is. Bitcoin offers both risks and opportunities for traders and investors alike, and 2022 could be a very big year for virtual forms of currency, particularly the leading coins like BTC. Bring yourself up to date on what's happening with crypto in general, how bitcoin is faring, and what the most recent global economic developments mean for prospective investors.
What's going on with BTC right now?

Bitcoin is in a unique position right now in terms of price, social acceptance, and regulatory status. More individuals and investors are buying, holding, and using the asset than ever before. In fact, at least one national government, El Salvador, has adopted it as their national currency after failing to maintain their own fiat currency.

In terms of price, the year-to-date data, one-year, and five-year charts are highly instructive. For starters, since the beginning of 2022, BTC's price has fallen from nearly $48,000 to the $42,500 mark. But that data makes more sense when we view a longer-term track. For instance, one year ago, in early 2021, the alt coin's value was near the $34,000 level, which means it has risen about 25 percent in the past 12 months. What about the five-year timeline? BTC was selling for $925 in early 2017, so the increase since then has been truly astronomical. As the virtual currency gains acceptance, not only do overall pricing levels continue to rise, but volatility tends to lessen.

What does 2022 hold for cryptocurrency investors?

It's one thing to study the past and use old data to make predictions about the future. An even better, more informed way to choose where to invest money is to study current economic conditions, financial trends, social news, and other up-to-date data. For example, 2022 poses some unique advantages for people who want to buy, hold, or trade bitcoin.

One of the key trends taking place in 2022 is the widespread acceptance of BTC within the retail, investing, and international economic realms. No longer an oddity, the alt coin is gaining followers among some of the world's largest and most established governments, notably the US, the UK, Japan, and several others. Even when those nations don't outright invest in BTC for a profit, they are all actively purchasing and holding it.

Keep in mind that millions of traders take part in the forex markets on a daily basis. Many of the newer currency pairs include bitcoin as a quote or base currency, even though it is not officially a fiat form of money anywhere but in El Salvador. You can learn how to trade BTC-USD and speculate on the relative strength between bitcoin and the value of the US dollar.

Pros of trading cryptocurrency

If you choose to trade one of the leading alt coins, it's essential to understand the ups and downs of doing so. Not only do cryptos offer unlimited upside value, they have been steadily gaining ground as accepted forms of money all over the world. Bitcoin's situation is even better because it's the leader of the alt coin sector, which means its liquidity is extremely high, and it is more stable than others.

Cons that crypto traders should remember

The biggest single downside of crypto trading is volatility. At least for the larger coins, viability and long-term success is no longer a major worry for most people. However, even for the main players in this sector, price swings can be fast and large. That's just one reason that it's crucial to keep a close eye on investments that are denominated in cryptocurrency. That includes forex pairs where one side is a crypto asset, stocks in companies that have vast cryptocurrency holdings, and positions in the alt coins themselves.

How to own and trade BTC

Keep in mind that it's possible to hold cryptocurrency just as you would any other financial asset. Even if your side job is trading and investing in cryptos, consider holding at least a portion of your account for long-term appreciation. If 2022 turns out to be a banner year for alternative currency, those who are holding BTC and other crypto assets could be in for a very profitable year.

About Boris Dzhingarov

Boris Dzhingarov graduated UNWE with a major in marketing. He is the CEO of ESBO ltd brand mentioning agency. He writes for several online sites such as Tech.co, Semrush.com, Tweakyourbiz.com, Socialnomics.net. Boris is the founder of MonetaryLibrary.com and cryptoext.com.
Read more: bitcoin, cryptocurrency

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