Why Cryptocurrencies Present an Opportunity for Traders :Introduction
These days, a conversation is not complete without the talk of cryptocurrencies. It is a topic that is being discussed by people from around the world. Travel to any country and you will likely find local cryptocurrency experts. On the other hand, watch financial media at any day and you will likely see the commentators talk about cryptocurrencies. Listen to the speeches of CEOs and Central Bank officials and this topic will not be missed.
The industry has evolved a lot in the past few years. In fact, the industry is yet to turn ten years. The industry was started in 2009 by Satoshi Nakamoto, an anonymous person or group. They published a white paper on blockchain and went ahead to introduce the concept of cryptocurrencies. Today, the currency he founded is worth more than $150 billion and the industry is worth more than $300 billion.
Every decade, something new comes out that goes on to change the world. In the 19th century, crude oil was discovered. Today, it powers the world. In another decade, the wheel was discovered. In the early 1900s, two brothers discovered the airplane. Today, people can travel anywhere in the world. In the 80s, the DNA technology was discovered. Today, it is used around the world. In the 90s, the internet was introduced to the mass market. Today, people from around the world are using the internet for everything. Companies like Google and Facebook have changed how we interact. It is impossible to imagine a world without internet.
In the past few years, blockchain has been the most talked industry. All companies including Google, IBM, and Goldman Sachs have entered into the industry. IBM has developed blockchain related tools to help companies do trade. Futures companies like CME and CBOE have already created cryptocurrencies futures and Nasdaq has talked about the industry. In addition, there are more than 1,800 cryptocurrencies.
The role of blockchain technology for future transactions cannot be understated. As global trade intensifies, the need for a currency that is decentralized will continue to be needed. People will want to trade to avoid sanctions and being tracked. Therefore, there is a possibility that some – not all – cryptocurrencies will be the next big thing.
As mentioned above, there are more than 1,800 cryptocurrencies. Most of these currencies are fraud and I would not advise you to trade them. However, this is how innovation happens. In the early days of the internet, many fraudulent companies were formed. In 2000, the dot com bubble busted and most of these companies disappeared. Today, the technology industry is better and safer because these companies were destroyed. The same thing will happen for the cryptocurrencies industry.
As we had written before, there are only a few cryptocurrencies that we can recommend to anyone. Traders should start focusing on currencies like Bitcoin, Ripple, Ethereum, Bitcoin Cash, Litecoin, and Monero while ignoring the others.
As you trade in cryptocurrencies, you should understand the risks that exists. Since the industry is fast-changing, the currencies are highly volatile. It is not uncommon to see cryptocurrencies fall or rise by more than 400 points. Therefore, you need to be very careful any time you buy and sell cryptocurrencies. You should ensure that all your trades are protected. Also, you should try to hedge as much as possible.