If the pandemic demonstrated anything, it is that their livelihood depends on a stable income. Many people were left stranded, with no savings or alternative means of earning money when their jobs were suspended or eliminated. Right now, everyone is scrambling to find a way to make sure they don’t end up praying for the government to give them a handout.
There is another category of people – those who look with joy at their wallet. Yes, we’re talking about the annoying neighbour/ friend/colleague who went on and on about Bitcoin a while ago. The most popular cryptocurrency in existence has increased in value from $5,000 when the pandemic was announced in March 2020 to $42,000 in January of this year.
And it’s not just about Bitcoin: the cryptocurrency market now has more than 8,000 coins and represents an investment of more than 1 trillion dollars. Many people who viewed this phenomenon with suspicion are beginning to realise that it is now too big to ignore. It’s also stupid to ignore the opportunity, especially since the future doesn’t look very bright for the traditional financial system.
There are millions of detailed articles on what Bitcoin is and what cryptocurrencies are in general. We won’t go into details about that, we want to explain to you why it is a good time to invest in cryptocurrencies.
The mini-printer goes away
When the economy came to a standstill due to lockdowns, governments needed an emergency solution to prevent the financial system from collapsing. The easiest way to do this was to print more money. For example, the US Federal Reserve has injected more than $9 trillion into the US economy in the last year. Basically, more than 20% of the dollar in circulation today was created last year.
The European Central Bank has also implemented several measures to support the financial system and generated 120 billion euros last year. ECB President Christine Lagarde has pledged to inject as much liquidity as necessary to ensure that states can issue as much debt as they need to deal with the crisis.
When you generate unlimited money, the value of money decreases, so everything becomes more expensive. It’s not necessarily a problem if managed correctly, but we also need to keep in mind that the real economy is not improving quickly.
Yes, we have a vaccine for the virus, but it will take months to distribute it and restart normal life. All industries in the world were greatly affected and will take a long time to recover.
So what does this mean for the average Joe (or Jane)? You need a safety net. Whether it’s a way to make money in your spare time or you want to have some funds stashed away, you need a solution.
Cryptocurrencies are one of those solutions. It is a separate economic system from the stock market or the real estate market, in the sense that it does not fluctuate in the same way. It also allows you to choose how to invest your money and have full control over it.
Long-term investment or playing the market?
There are two ways to use cryptocurrencies. Well, more than that, but let’s start simple.
You can invest some of your money for the long term in Bitcoin, Ethereum, or another currency that has proven it can stand the test of time. As we mentioned before, since March of last year, Bitcoin has increased in value from $5,000 to approximately $37,000 right now. Ethereum, the second largest cryptocurrency on the market, has risen from $200 to $1,200.
In the last 2 years, both currencies have seen growth of over 1000%. How many other assets can claim the same? As a long-term investment, it is difficult to find something that can generate the same return.
There is also the opportunity to make money in your free time by playing the market in the same way you use FOREX or the stock market. The crypto ecosystem has the advantage of rapid fluctuations, so you can earn (or lose) money much faster.
Of course, this means that you have to know how to invest and use trading robots and many other skills that only some people have. What we are trying to show is that there is something for everyone in the cryptocurrency market.
Warning, dangerous waters ahead
If you decide to invest in cryptocurrencies, there are several caveats that we must mention. First, it requires a bit of technical knowledge, something that can be learned in about an hour of surfing the Internet.
For example, cryptocurrencies must be held in digital wallets (hardware versions also exist).
Secondly, unlike regular investments that are insured, you have full control over your coins.
But as Spiderman said: “With great power also comes great responsibility.” Full control also means that you are responsible for it. If you forget your private keys and your computer crashes, you will lose everything.
Thirdly, the cryptocurrency market works very fast. Prices go up and down in the blink of an eye and one wrong move can mean big profits or a total loss. If you’re in this for the long haul, this doesn’t matter much. Over time, your investment will most likely increase in value,
even if it stumbles a little along the way.
But if you are interested in day trading, make sure you don’t put all your eggs in one basket and watch out for foxes that will try to eat your chicken (yes, this is a metaphor for scams and criminals).
Never invest more than you can lose.
How to start?
Now that the warnings are behind us, we can move on to the practical side. There are several ways to buy your first cryptocurrencies. We recommend avoiding peer-to-peer sites like LocalBitcoins or other similar places, it is risky for a beginner. Start with an official exchange platform; there are several types.
Some are simple: you have US dollars or euros, they sell you Bitcoin, Ethereum or another currency. There are not many, because banks are not very happy with the competition that cryptocurrencies represent.
Other platforms accept fiat money like USD or Euro, but convert it to a fiat-pegged cryptocurrency like USDT or USDC before adding the funds to your account. Basically, one USDT is equivalent to one US dollar.
Vtrader.io is one such platform: it is designed to be welcoming and intuitive for both advanced users and beginners. Users can transfer the money to the exchange’s bank account and the USDT equivalent is added to their user account as soon as the deposit is processed. Once the funds are available, you will be able to purchase one of the five available currencies and use them however you want.
There are also exchanges that offer a variety of trading options for those who are interested in playing the market. For example, Binance offers many crypto derivatives such as futures contracts, leveraged trading, staking options, etc. This type of trading requires advanced knowledge, but can be a very rewarding way to spend your free time.
Overall, the cryptocurrency market has room for everyone and is an opportunity not to be missed considering the difficult days ahead.