3 Incomprehensible Reasons To Buy More Cryptocurrencies Now
You may not be overly excited about entering the cryptocurrency market right now. The market capitalization has fallen by more than $1 trillion since the beginning of the year. Even the biggest players love Bitcoin (BTC -1.01%) And the Ethereum (ETH -2.09%) It’s down about 60% in that time period.
But there’s a reason to look beyond the gloom — and focus on what could be a very bright future. In fact, there are three thought-provoking reasons to buy more cryptocurrencies today, even with the financial markets in the doldrums. Let’s take a closer look.
1. Attractive prices
Investors have moved away from riskier assets – such as cryptocurrency – amid concerns about the economy. This has led to declines, as I mentioned above, for even the best cryptocurrency players.
Promising cryptocurrencies like Solana (Sol -1.35%) And the Cardano (ADA 2.94%) suffer. They have lost more than 80% and 60%, respectively, since the beginning of the year.
It is tempting to buy assets as their prices rise. They often appear to be confident winners. But the time to enter the market – or buy more assets – is actually when the asset is for sale. And this is the case today with the cryptocurrencies I mentioned above and many others.
This does not mean that it is time to go and buy any cryptocurrency that is a bit lost. It is crucial to closely examine each player before purchasing. Is Cryptocurrency Attracting Users and Developers? Does it have the potential to change the way business is done? Does the technology work?
These are all major questions to ask. If the answers are positive, the low price of this particular crypto could be a great buying opportunity. It’s important to remember that cryptocurrencies have plummeted in the past – and eventually rebounded.
2. Stories That Haven’t Changed
Cryptocurrency prices fell across the board. High inflation and economic fears are hurting financial markets today. At the same time, the stories of cryptocurrency players have not changed.
Today’s economic situation does not hinder the ability of cryptocurrency to make blockchain faster or more efficient. And it won’t stop the player’s ability to progress, bring in new developers, and eventually introduce more and more applications on the blockchain.
So, the drop in cryptocurrency prices today does not reflect the potential of the industry. If, a year ago, you were positive about cryptocurrency’s ability to change the financial world – and even other areas, such as entertainment – there is reason to remain positive about it today.
3. Next major milestones
Significant moments are just around the corner for many crypto players. This could pave the way for future success – for these players and their investors.
For example, this month only we can expect two. Ethereum is set to complete the “merger”. This is the integration of the Beacon Chain with its main network. Results? Ethereum will officially switch the method it uses to validate transactions for Proof of Stake from Proof of Work.
This will reduce the grid’s energy use by 99%. It is part of a public update suite to increase transaction speed and reduce transaction costs.
Another big event this month: Cardano plans to release a Vasil hard fork. This is an update that will improve the performance of the blockchain. And that could attract more and more developers – and users – in the future.
Of course, before increasing your position in cryptocurrency, it is essential that you look at your comfort with risk. The industry is risky because it is so new. This means that it’s hard to fully predict what it will look like a few years from now. So never invest more than you can afford to lose.
But if you are willing to bet that cryptocurrency will succeed over time, for the reasons I talked about above, then this is a great moment to do so.
Adria Cimino holds positions at Ethereum. Motley Fool has positions in and recommends Bitcoin, Ethereum, and Solana. Motley Fool has a disclosure policy.