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Can Cryptocurrency Become Less Volatile for the Masses Who Don't Invest Yet?

Currencies / cryptocurrency Nov 02, 2021 - 05:18 PM GMT

By: S_N_Chatterjee


Whether or not you are related to the finance world, you are bound to know or at least have heard about cryptocurrency. Cryptocurrencies are a type of e-currency or digital assets in which you can invest. However, the concept of e-currency is still quite new to the general mass. It can easily intimidate an individual and might be a big risk if you are not aware of what you are doing or where you are investing.

Despite that, many investors continue showing interest in cryptocurrency, which brings up the question— will cryptocurrency ever become less volatile for the mass? In this article, we will take our time to find an answer to that question. If you are ready, let us start right away!

Is it too big of a risk?

Ever since Tesla revealed that it had bought bitcoins worth $1.5 billion, the net worth of cryptocurrency hit the roof, making it its highest recorded market value of more than $800 billion. 

Obviously, investors were on the run to have their share of investment in this new hot-topic of the market. However, for the average mass, though there was an interest, the risks were too high.

The reason is, bitcoin, or cryptocurrency in general, is an investment that is too volatile and too risky. History stands proof of that statement because there were instances where the price of bitcoin would go up rapidly, only to come crashing down soon.

Therefore, though it can give you major returns, it can also incur huge losses. As such, many investors liken investing in bitcoin to gambling. One should invest an amount that one can afford to lose. Therefore, while investing in bitcoin or any other cryptocurrency for that matter, you need to be mentally and financially prepared to earn great returns, as well as lose them really quickly.

Will the average mass be able to invest in cryptocurrency?

While cryptocurrencies are volatile, the fact that it is gaining more interest and popularity is not fading any time soon. The market is continuously evolving, and you can expect only good things for cryptocurrencies. Hence, the world as a whole is coming up with ways and reasons to make cryptocurrency a more accessible means of investment for the average folk. Here are a few major reasons why:

Gold-backed cryptocurrency

Recently, gold-backed cryptocurrencies were launched by Dignity Gold as DIGau Crypto. These cryptocurrencies are priced at the value of gold, which makes them less volatile and more dependable. This can be a great way for average investors to invest in cryptocurrencies without the vigorous uncertainty of it.

Regulation of cryptocurrency rules

Due to the rising popularity of cryptocurrencies and their consequent uncertainty and risks, major authorities around the globe are continuing their discussions of regulating cryptocurrency to ensure safety and reduce the chance of cybercrime and damage.

Major law authorities around the globe, including those of Washington D.C and more, are in talks to understand and figure out ways to create laws for cryptocurrency trading so that it becomes safer for investors. This will help investors have better and clear ways of reporting their cryptocurrency transactions.

Big corporations adopting cryptocurrencies

From PayPal, AMC, and Square to,  of course, Tesla — all of the major corporations around the world have been taking great interest in cryptocurrencies, with some even openly investing and accepting payments in the form of cryptocurrencies.

This will greatly affect the confidence of the average investors to further invest in cryptocurrencies. The more standardized the use of cryptocurrency gets, the more its price will increase. Hence, cryptocurrencies will become ideal for long-term investment while getting less volatile.

ETF approval for cryptocurrency

ETFs or Exchange Traded Funds are investment funds that track the worth of an underwritten asset or index. Similarly, cryptocurrency ETFs will track the worth of a cryptocurrency and will enable one to trade in traditional markets instead of cryptocurrency agencies.

Having an ETF approval of cryptocurrency will help people invest in it more conveniently. This will open up new opportunities for the average mass and will give them more ways to get involved in this event.

There already has been a major development in this scene as the very first Bitcoin ETF was introduced in the New York Stock Exchange (NYSE) very recently.

By S N Chatterjee

Copyright 2021 © S N Chatterjee - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2022 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

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