Analysis of the cryptocurrency market

Cryptocurrency has been around for a while and there are many articles and articles about the basics of Cryptocurrency. Cryptocurrency has not only flourished, but also opened up as a new and reliable opportunity for investors. The cryptocurrency market is still young, but mature enough to shed the right amount of data for analysis and predict trends. Although considered to be the most volatile market and a huge gamble as an investment, it has now become predictable to a certain point and Bitcoin futures are proof of that. Many of the concepts of the stock market have now been applied to the cryptocurrency market with some modifications and variations. This proves to us that many people are adopting the Cryptocurrency market every day and now more than 500 million investors are participating. Although the total market capitalization of the cryptocurrency market is $286.14 billion, which is about 1/65 of the stock market at the time of writing, the market potential is very high given its success despite its age and the presence of already established financial markets. This is because people are starting to believe in the technology and products that support cryptocurrency. It also means that the crypto technology has proven itself and companies have agreed to put their assets into cryptocurrency in the form of coins or tokens. With the success of Bitcoin, the concept of cryptocurrency has succeeded. Previously the only Cryptocurrency, bitcoin now contributes only 37.6% to the total Cryptocurrency market. The reason is the emergence of new Cryptocurrencies and the success of projects that support them. This does not indicate that Bitcoin is failing, in fact Bitcoin’s market capitalization has increased, but rather that the cryptocurrency market as a whole is expanding.

These facts are enough to prove the success of Cryptocurrencies and their market. And in fact, investing in the Crypto market is now considered as safe as some investing in a retirement plan. Therefore, what we need next are tools for analyzing the cryptocurrency market. There are many such tools that allow you to analyze this market in a similar way to the stock market that provides similar metrics. Including coin market cap, coin tracker, cryptocurrency and investment. Even if we consider these metrics to be simple, they provide important information about the cryptocurrency under consideration. For example, a high market cap indicates a strong project, a high 24-hour volume indicates a high demand, and a circulating supply indicates the total amount of a cryptocurrency’s coins in circulation. Another important indicator is the volatility of cryptocurrency. Volatility is how much the price of a cryptocurrency changes. The cryptocurrency market is considered to be very volatile, cashing out at a moment can bring a lot of profit or pull your hair out. So what we are looking for is a cryptocurrency that is stable enough to give us time to make a calculated decision. Currencies such as Bitcoin, Ethereum and Ethereum-classic (not particularly) are considered stable. Being stable, they must be strong enough not to become invalid or simply cease to exist in the market. These features make cryptocurrency reliable and the most reliable Cryptocurrencies are used as a form of liquidity.

When it comes to the cryptocurrency market, volatility goes hand in hand, but so does its most important feature, which is decentralization. The cryptocurrency market is decentralized, which means that a price drop in one cryptocurrency does not mean a downtrend in any other cryptocurrency. So it gives us an opportunity in the form of so called mutual funds. This is the concept of managing a portfolio of cryptocurrencies that you invest in. The idea is to spread your investments across multiple Cryptocurrencies to reduce risk if any cryptocurrency starts with a bear.

Similar to this concept is the concept of Indices in the cryptocurrency market. Indices provide a standard reference point for the market as a whole. The idea is to choose the best currencies in the market and spread the investment between them. These selected cryptocurrencies change if the index is dynamic and only considers the best currencies. For example, if currency ‘X’ falls to the 11th position in the cryptocurrency market, the index that considers the top 10 currencies will now not consider currency ‘X’, but will instead consider currency ‘Y’, which took its place. Some providers like cci30 and crypto20 have tokenized these Crypto indexes. While this may seem like a good Idea to some, others are against it due to the fact that there are some prerequisites for investing in these tokens, such as a minimum investment amount being required. While others like Kryptose provide the methodology and index value along with the currency components, the investor is free to invest the amount he wants and can otherwise choose not to invest in the cryptocurrency included in the index. Thus, indices provide an option to further smooth volatility and reduce the risk involved.

The result

The cryptocurrency market may seem risky at first glance and many may still be skeptical of its authenticity, but the maturity it has achieved in the short time it has been around is amazing and is enough proof of its authenticity. The biggest concern of investors is volatility, which is addressed in the form of indices.