Are you thinking about getting involved in the cryptocurrency markets but aren’t sure whether now is the right time? If so, you are like many other investors and traders who are somewhat reluctant to jump into a highly volatile, relatively new arena. By far, the most significant player in the sector is bitcoin, BTC in symbol form, and the major crypto attracts most of the capital in the entire niche.
What’s Coming Up for 2022?
What lies ahead for a bitcoin trading broker in the UK? Perhaps the single most relevant factor for crypto and other segments is the resolution of the COVID economic crisis. Businesses in the UK and elsewhere have gone bankrupt as a result of shutdowns and various social restrictions. Independent retailers, to name one of the hardest hit groups, suffered historic losses between March 2020 and now. Watch legislation pertaining to in-person business closures, the continuing oil shortage, and general economic downturns. If all those negatives continue and there is little resolution to the COVID situation, BTC could continue to soar in price as people view its safe-haven features and add it to their portfolios.
How to Analyze the Leading Cryptocurrency
Along with a few of the other top virtual coins, BTC comes with a long list of pros, cons, risks, and rewards for those who are interested enough to add it to their portfolios. If you’re on the fence about bitcoin, the best way to decide is to catch up on current developments and find out how the coin has been performing. It’s informative to study price action since the COVID pandemic began. But even more important than studying historical charts is looking at the future. That’s why it’s essential to investigate what’s likely in store for the asset during 2022. For instance, there are several national and international laws that could significantly affect the fortunes of BTC and all other cryptocurrencies.
What’s true for all other assets is true for bitcoin. Those who wish to expose themselves to any amount of the coin should review the opportunities and risks. Unlike traditional stocks, bonds, and commodities, BTC comes with a unique set of pros and cons, and every potential investor needs to do some in-depth research before making a financial commitment. Finally, if you choose to acquire BTC in any amount, be sure to learn a few of the techniques for trading crypto. Unlike more common kinds of securities, all the alt coins have a few unique features, which means that the methods you use to assess and invest in stocks are quite different from those used in the crypto niche.
After recently settling in around the $57,200 mark, the price of bitcoin has plenty of room for improvement during the upcoming year, 2022. One year ago, BTC’s price stood at $19,249, less than half of what it is today. Not only has 2021 been a profoundly good year for the asset, but the two-year historical chart is equally impressive. In late 2019, the value of one bitcoin was a just $7,315. Few stocks, index funds, commodities, or other asset classes have showed exponential gains like that.
However, taking a closer look at the charts reveals the inherent volatility of the world’s most beloved cryptocurrency. After a steep climb between late 2020 and mid-2021, the coin suffered a massive drop in value. Afterward, prices went on a gigantic roller-coaster ride that included big swings upward and downward before reaching the $65,000 range last month, in November 2021.
Opportunities and Risks
In addition to the opportunities related to the COVID pandemic, bitcoin possesses several other positive features and qualities that make it an attractive buy for individual and institutional investors. Above all is the unlimited potential for gains. Because the coin is not issued by a corporation or government and does not represent a product or service, its upside is infinite. Ten years from now, one unit of BTC could be worth an enormous sum.
Another opportunity, at least in the eyes of short-term traders, scalpers, and speculators, is volatility. No other major asset today experiences the kinds of price swings that bitcoin does. For the majority of working adults, that’s a disadvantage. But volatility is a plus for day traders and those who thrive on rapid fire price changes in both directions. There are a few significant drawbacks to owning BTC. Volatility, discussed in detail above, is the primary one. If you don’t like or can’t handle frequent price moves, stay away from the entire cryptocurrency niche.