Gold vs Crypto

What if You’ve Invested in Cryptocurrencies One Year Ago?

2021 was labeled as the year of cryptocurrencies as crypto investment became more of a mainstream. Digital coins, like Bitcoin and Ethereum, hit all-time highs and made millionaires of investors around the globe. The crypto market total cap surpassed $3 trillion for the first time, thanks to growing popularity of digital assets. The emergence of new digital assets, like the non-fungible token or NFTs, also contributed in bringing crypto trading to the mainstream. 

Altcoins showed an impressive rally through 2021. Dogecoin price, for example, rose by more than 3,500% making it one of the top performing coins during last year. Ethereum also reached an all-time high of more than $4,800 per coin. 

Top Gaining Cryptocurrencies - 2021

Frankly, the world of crypto assets has gone mad in 2021. The unfolding of NFTs reshaped the crypto horizon. Described as the future of digital work and rapidly captured the world’s attention. 

Non-fungible tokens are digital assets that cryptographically represent the ownership of real items like art, music, collectibles and even real estate, created to identify things in a unique way and can be perfectly used on platforms of collectible items. Modern collectibles that can be bought and sold online like any property, mainly using cryptocurrencies, but with no tangible form of their own. 

Check Non-Fungible Tokens Explained

Not to mention all the metaverse hype. The metaverse was described as the future of the internet. Simply put, the metaverse is a virtual reality for living an online second life using a computing platform. It’s about living in the computer rather than accessing it.

Cryptocurrency Trading

Cryptocurrency trading began back in 2009 with the top cryptocurrency; Bitcoin (BTC).  Though it would be a couple of years before the first exchanges would open, launching a digital exchange for bitcoin has resulted in the emerging of numerous cryptocurrencies. Today, the market has a daily volume of more than $100 billion, with most of that going through exchanges. Trading regulations on many of these platforms can vary wildly due to different parts of the world having different rules and regulations concerning cryptocurrency trading.

The crypto market is about 11 years old and exclusively deals with digital assets. It operates 24 hours a day, seven days a week.

Cryptocurrencies are digital assets that use cryptography, an encryption technique for security. Cryptocurrencies are primarily virtual currencies designed to buy and sell goods or services that lack intrinsic value as they are not redeemable for another commodity, like gold for example. Unlike traditional currencies, they are not issued by a central authority. 

In recent years, crypto trading has been booming. Investors are speculating the future possibilities of this new technology, which have driven most of the current market capitalization and valuations so far. Many see cryptocurrencies as the money of the future. This is likely to remain the case until a certain measure of price stability and market acceptance is finally achieved. Aside from the declared price of the cryptocurrency, investors seem to be relying on a perceived inherent value including the technology and network itself, the security of the cryptographic code, and the decentralized network. 

The crypto market is known to be highly volatile. However, the volatility is seen by many as an advantage. The Crypto market is less vulnerable to global events or financial markets such as traditional currencies. Traders are less likely to be scanning headlines and more likely to be paying attention to price charts and technical analysis.

Check also Forex vs Crypto Trading: What Is Your Best Choice?

Are Crypto Investments Worthy? 

Investing in cryptocurrencies and digital assets is becoming more appealing and entices new traders every day. Not only because of the skyrocketing prices, but also the growing value of the crypto market. Despite the forever controversy around the crypto trading, crypto assets are here to stay. 

Remember that past performance doesn’t guarantee future returns. Experts usually warn to put no more money into crypto trading than an investor can afford to lose. 

If you decide to invest in cryptocurrencies, consider: 

  • Never risk more than you can afford
  • Do your research 
  • Choose a reliable broker 

Read more on How to Choose the Best Broker for Cryptocurrency Trading?

Still skeptical? Let’s assume you had $1000 to invest in early 2021. Let’s see how much money you’d made out of crypto investments. 

What if You’ve Invested in Cryptocurrencies One Year Ago?

A $1000 investment in the top cryptocurrencies at early 2021 would’ve generated impressive returns by the end of the year. Let’s use the three top performing popular cryptocurrencies as examples. 

Bitcoin: BTC started the year at a high of $29,600.62 on 1st Jan, 2021 and ended the year at $46,306.45 per coin. A $1000 investment would’ve bought 0.0338 BTC that was worth $1,565.16 by Dec 31st. The value of Bitcoin increased by nearly 65% and the market cap hit $1 trillion in February 2021 before pulling back to $700 billion in January 2022. 

Ethereum: ETH traded at $749.20 on the first day of the year and closed at $3,682.63. The price was up more than 400% over the 12 months ended in December. A $1000 investment would’ve been worth $4,915.57. 

Dogecoin: DODGE traded at $0.005685 and ended the year at $0.1705. A $1000 investment would’ve been worth $29,991.12. Dogecoin price rose 12,000% thanks to Elon Musk support, before pulling back. The coin ended the year with nearly 3,500% gains. 

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