12th October 2021

Risk and Opportunity in Today’s Crypto Market

For millions of new and experienced traders and investors all over the world, cryptocurrency represents one of the best ever opportunities for making a profit.

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Risk and Opportunity in Today’s Crypto Market
Crypto currency coins infront of a stock screen


For millions of new and experienced traders and investors all over the world, cryptocurrency represents one of the best ever opportunities for making a profit. Prices are volatile but still aimed in a general upward trajectory and opening a trading account takes just a few minutes. Before getting started, it’s important for people to catch up with the latest news about regulations, industry developments, pricing trends, and other factors that directly affect their potential for making money in this exciting marketplace called cryptocurrency.


How Things Stand in Late 2021

After a couple of extremely up and down years with prices, the major cryptocurrencies like bitcoin and ethereum, are currently on an upward price surge. For example, market leader bitcoin began 2021 at $29,388 and has since risen to just above the $54,000 mark. That’s an excellent run by any definition. To put that good news into perspective and get an idea of how fast the crypto marketplace moves, consider that bitcoin’s value in July dipped to $29,789 from an astounding high to $63,237 just three months prior. Anyone thinking about entering this niche should be ready for plenty of action in both directions. The most important news in the cryptocurrency world in the second half of 2021 came out of China, a country whose government decided that alt coins were not in the best interest of national security or economic stability.

The translation is that the totalitarian communist regime that runs the mainland doesn’t like the independence and freedom that cryptocurrencies give to those who own them and invest in them. What was the fallout of the national ban? For about a week, most of the major alt coins experienced declining prices but soon shot back up as bargain hunters moved in and bought bitcoin and ethereum at those temporarily low prices. The growing acceptance of crypto coins in most nations, and the fact that the price charts tend to move up over the long-term, are just two reasons that 2021 and 2022 are set to be potentially profitable years for newcomers to the market who want to learn how to trade cryptocurrency in UK, U.S., Asian, African, and other regions.


Overview of Opportunities and Risks for Traders and Investors

In today’s unique economic scenario, what are the pros and cons of getting into the alt coin trading and investing world? There are dozens of factors to consider, but the following top the list.

Risk: High Volatility

One look at a bitcoin or overall crypto market chart for the past five years tells the story. The good news is that, in general, values are going up. The not so good news is that anyone who buys, owns, holds, or trades assets like bitcoin and ethereum should be ready for major swings in both directions.

Opportunity: Unlimited Potential Returns

Perhaps the biggest draw of the alt coin sector is the unlimited potential for profits. Unlike stocks, bonds, and even precious metals, cryptocurrency is a relatively new asset class, with untested highs. In just over a decade, the new form of money has gone from a low value investment that only a few people bought or sold, to a massive influence on the global economy. The major coins have attracted the interest of governments, financial institutions, retirement funds, and individuals. Offsetting the downside of volatility, for many, is the fact that a modest stake in crypto today could yield extremely high profit margins.

Risk: Security

It’s become less common, but there are still occasional news stories about this or that alt coin being hacked or suffering a security breach. In the past, several high-profile breaches and hacks have caused coin owners to lose money. Rarely have investors or coin holders lost significant amounts. However, it’s essential to remember that account holders need to secure their coins in hard wallets, which are offline forms of digital storage.

Opportunity: Anonymity

For working people who want to keep their financial business private, there’s no better place to park monetary assets than in one or more cryptocurrencies. While all transactions are traceable and verifiable on the blockchain, the identities of users are kept private. If you like financial anonymity, cryptocurrency can be a smart addition to a personal portfolio.

Risk: Coming Regulation

China was an extreme case in which a national government completely banned the use of all cryptocurrencies. But other nations already have some controls, laws, and rules in place regarding taxation and mining of cryptos. In Europe and the U.S., for example, governments are in the midst of crafting legislation that would require full and detailed annual reporting of all alt coin assets on tax filings.

Opportunity: Ease of Doing Business

Once you add alt coins to your personal account, whether in a soft or hard wallet, it’s easy to use the assets for spending, re-investing, trading, or speculation. Transaction fees are extremely low, there are no taxes on transactions (though your government might legally require reporting and paying tax), and payments for goods and services takes place instantaneously.

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