Viktor Kochetov
CEO Kyrrex. Knowledge of traditional markets comes with experience in crypto.
More and more people are interested in cryptocurrencies, an ever-growing asset and medium of exchange. As CEO of Kyrrex, allow me to share with you our team’s industry insider opinion on cryptocurrencies as a worthwhile investment.
Cryptocurrencies continue to grab headlines amid their rising exchange rate against the US dollar. Naturally, more and more retail and fund investors are considering adding crypto to their portfolios or have already done so. At this point, I must take a step back and make an important caveat: cryptocurrencies remain a highly volatile asset with rapidly changing value. These changes could result in substantial gains, as well as significant losses. So, a natural strategy would be to allocate a small portion of the portfolio to different crypto assets.
Consider the specific cryptocurrencies that have the greatest chance of gaining value over time. The two main approaches are to buy the larger cryptocurrencies because of their reliability and to look for smaller ones that will quickly rise in value and hopefully remain for the duration.
The easiest, and probably the most reliable, approach would be to consider the top and most important cryptocurrencies. In order to determine which ones, you can consider four characteristics: their age, their market capitalization, their general convertibility and their recent performance.
The age of cryptocurrency reflects its ability to remain in circulation over time. The process of determining market capitalization requires multiplying the number of crypto in the market by its value in fiat currency, most often the US dollar. At the same time, general convertibility requires monitoring companies and jurisdictions that accept cryptocurrency as a form of payment. Finally, recent performance analysis helps assess whether the crypto has recently been in a downward spiral, which could lead to its demise.
Bitcoin (BTC) has been around since its launch in January 2009, which means it’s been around for over a decade. The Bitcoin market capitalization reached 18.9 million at $46,802 per BTC, or $46,802 * 18.9 million = $884.6 billion. The biggest companies, like Tesla, have accepted BTC as a form of payment while some countries, like El Salvador, have made Bitcoin a form of legal tender.
BTC has remained very volatile recently, with its exchange rate dropping from $29,374 per BTC in December 2020 to $63,110 per BTC in April 2021. The rate went down to $29,807 per BTC in July 2021 and down to $66,972 in November 2021. The rate fell again. in January 2022. Variations greater than 100% over several months represent substantial investment risks. However, the general trend of increasing value makes Bitcoin a solid investment option.
Ether (ETH) holds a solid second place as the largest cryptocurrency. Its release came in July 2015 with the launch of the Ethereum open platform, a programmable blockchain allowing its use by third parties. The market capitalization of ETH reached $434.8 billion in 2021 at the rate of $3,629 per coin. Amazon, Overstock, Travala, and more than a dozen other companies have accepted ETH as a form of payment. Ether showed very similar volatility to BTC in 2021.
The third place among the biggest cryptocurrencies is not as obvious as the first two. Some sources suggest Tether (USDT)while others recommend Peas (DOT). Each of the mentioned alternatives definitely deserves the third place. For example, USDT is a stablecoin that has the support of the US dollar. Polkadot can connect to different blockchains, which gives it a unique advantage. Thus, the choice between these two will be very subjective.
Relying on the biggest cryptocurrencies has its limitations from the perspective of potential returns. Another approach would be to consider the smaller crypto with high growth potential and relative sustainability.
It is possible to cite Solana (SOL), Decentraland (MANA) and Kyrrex (KRRX) among these potential investment targets. Similar to ETH, SOL has its own programmable blockchain. It has demonstrated outstanding performance in 2021 with 13,000% growth, implying further potential for 2022. MANA is the currency of the Decentraland blockchain-based metaverse, and the significance of the concept may propel it into 2022 and beyond. -of the. KRRX is a TRON network token offering lower trading commissions at high volumes, social trading, multi-account management and online banking features. The Kyrrex Crypto Exchange behind the token contributes to its utility and long-term growth potential.
A conservative investor would dedicate between 5.0% and 10.0% of their portfolio to cryptocurrencies. Such an approach will allow them to benefit from bullish exchange rate movements without facing critical losses during market downtrends.
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