You might have noticed that at the moment the cryptocurrency markets are flying high. Values are on the up and as are our investments. Overall, this is very positive news given that generally the past year has been quite a depressing one for us. With the markets moving in the right direction, it can be quite easy for us to get ahead of ourselves, so we must remember to hold back at this stage and not let our excitement get the better of us.
Cryptocurrency investment is risky. Even the leading cryptos like Bitcoin, XRP and Ethereum do come with a large element of risk. Whilst the markets look positive today, they could drop at an instant and value could start to bleed out of the markets again. Whilst we don’t want this to happen, we should declare that it is likely to happen as a result of correct. When bull runs occur and when the markets spike, the laws of mathematics always come into play and start to push values back down. Good investors use this knowledge to try and get their investments in just before a bull run. However, once prices hit a peak, people start to withdraw and sell off their cryptocurrency in order to reap the benefits of their recent investment. When this happens, value starts to bleed out and thus, money can be lost.
The best thing to do in this climate is to do your research and only invest money you can afford to lose. Don’t get too excited, stay calm and keep an eye on the markets. It looks as it we are about to enter a very volatile spree. Volatility can mean huge price climbs and huge price declines, so be careful and always remember to trade safely.
Many believe that the current climate has been triggered by political uncertainty. FIAT currencies are on the decline and thus, people are starting to turn to Bitcoin for its element of security.. Whilst this is great, it also means these people are likely to sell off again in the future, so don’t be surprised if the next period of correction is quite a heavy one.
Let’s celebrate this up time and try to make the most of it, overall, lots of investors will be feeling pretty pleased right now and so you should be. Hopefully we see Bitcoin continue to run up to $20,000.00 and continue to pull the rest of the markets up with it!