This is a problem and a debate that is discussed daily. A lot of people believe that crypto has reached its peak and that there is nowhere else to go. The problem with this argument is that people never imagined Bitcoin would go beyond $5000 and slowly but surely it grew to what it is now. Bitcoin has become one of the best investments of the 21st century and during a lot of its points, people thought that it reached its peak.
A lot of new cryptocurrencies that are coming up are companies with clearly defined goals and a beautifully laid out roadmap. If you believe in these companies and the future of where they will lead their investors then the Answer is No, it is not too late to invest in crypto. A lot of people see crypto as a natural next step for us.
The trick to being confident in your investment is to do your research. Currently, the competition is very strong and a lot of companies are trying hard, with new innovative ideas and technologies to move forward and beat those who is in their way. Such heavy competition will lead to great strides in blockchain technology which means more adoption and more people knowing about the project!
Buy High, Sell Low
This is exactly what you should NOT do. Emphasis on research is important. The right time to buy something is when it is experiencing a dip. The million-dollar question is how to find out if it is a dip or the stock price is falling. You can analyse this by doing multiple checks on the future of the company and what it has planned long-term and short-term, you can see each quarter the reports of these quarters.
Moreover, you can also study market trends and try to predict what will happen in the coming hours, days, weeks and months. You can identify if the market is experiencing a bull run or a bear market and move from there.
There are various factors that contribute to buying in the right time and selling at the right time. People have lost a lot of money from panic selling so it is good to see what the company is doing.
It is not too late to invest in crypto but buying and selling at the right time is key to making money!
If you want to be part of the train, but do not wish to put in so much money, you can buy small chunks every month, that way your finances won’t take a big toll. This way will also avoid you having to do that much research because it will not affect you that much.
Always remember to invest what you are willing to lose. This way if the opposite of what you want happens and you end up loosing all your money, you will not be as disappointed.
Be cautious and plan your finances ahead. If you wish to read further you can look into the 70-20-10 model. This will help you to become financially free and be sure that your finances are being spread well.
Supply, Demand and Market Cap
Understanding this topic will lead you to understand the real value of the coin you invest in. For example, Bitcoin is so expensive because it’s a very scarce coin for how famous and adopted the coin is.
If you want to calculate your coins market cap you have to follow this formula:
Market cap = Total Circulating Supply * Price of Each Coin.
The point of creating a capitalization is so the coin will not be inflated. There were a lot of problems with governments and inflation. A very common problem is that a government is in-depth and they print more money. By printing more money you are reducing the value of the currency. Cryptocurrencies work in a way where they create a market cap and there can be no more coins made. That way the price is controlled.
The more adoption of a coin the more demand it requires, if the demand increases but the supply stays the same or it moves slower then the value of the coin will increase. The reason Bitcoin exploded in recent months is because large multi-million dollar companies have been buying large amounts of Bitcoin making the coin even more scarce.
Be wary, do not fall into the trap of FOMO (Fear of Missing Out). This is something that many people know about and yet still a lot of people find themselves in. FOMO kills. This is when you start researching and see a lot of comments about new companies emerging and new potential coins that will be game-changers and you start investing in them. FOMO will spread your investing too thin and your portfolio will be scattered as well as your finances.
When investing in crypto especially, due to the high volatility, be careful of this and do not fall into the trap of being afraid to miss out. DO thorough research so you will be confident in your investments and you are confident that you will turn over a profit.
Investing in crypto is an exciting endeavour because you will be part of the reason why you shaped the future. Always, be smart about your investment and make sure that you are dividing your finances well. If you keep to the 70-20-10 model you will have enough money to learn and earn money trading in cryptocurrencies.