Was 2021 the best year for Cryptos?
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The cryptocurrency market has been booming since the post-pandemic period. The digital coin was first available in the financial world with the inception of bitcoin back in 2009. At the time, no one knew the potential of the currency and the future it held. Over the years, Bitcoin and other cryptocurrencies became popular amongst most investors as a major piece of trading.
At the end of 2021, we have seen major coins show a good uptrend led by their parent Bitcoin. Our article will discuss the significant events for cryptocurrencies for the year and shed some light on how traders can trade cryptocurrency online in the future.
What are cryptocurrencies, and how can you trade them?
Cryptocurrencies are a form of digital asset that can be traded online, similar to traditional financial instruments. No one can hold these instruments in their hand as the trading activity takes place only on the internet. The data of cryptos is secured by cryptography, ensuring that no one can fraud.
Cryptocurrencies are immune to any watch-over by government or financial institutions. This makes them a prime choice of investment for everyone.
These financial instruments are available on brokers that list them out for traders. Speculation can be done on both the long and short sides after investors open an account with one of the exchanges. It is easy to trade cryptocurrency online from the comfort of your home with the use of a laptop and internet connection. With XTrade Cryptocurrency platform you can access multiple cryptocurrencies and trade them with ease.
Features of Cryptos
Like any other financial instrument, Cryptocurrencies have unique characteristics. Let us go through some of them below.
Blockchain Technology
Blockchain technology is used to store all the necessary information in the form of blocks. These are apparent to the public, which makes it hard to commit fraud while speculating cryptocurrencies. The first digital asset to use the network was Bitcoin.
Altcoins
After the inception of Bitcoin, many other cryptocurrencies were introduced later on, including Ethereum, Litecoin, etc. These are referred to as altcoins. In most cases, they follow the same pattern as their parent Bitcoin in terms of price movement.
Mining Cryptocurrencies
In 2021 the mining of most major forms of cryptocurrencies was at an all-time high despite the ban in China. As mining is done through hardware such as GPUs, the market was short in supplying these units due to excessive usage. Most investors believe the semiconductor shortage in the current year is due to the aggressive buying of mining equipment worldwide.
Crypto Wallets
Crypto wallets are used to store cryptocurrencies. They are all secured by a private key that a trader should keep note of at all times. It is possible to send and receive digital coins through the use of these wallets.
Volatility and Liquidity
The volatility in the crypto sector is abundant which is driven by fundamental and technical factors alike. With Billionaires such as Elon Musk coming into the crypto market with huge investments, the digital instruments have skyrocketed in 2021. This leads to an abundance in liquidity where traders can enter or exit their positions with ease.
A final outlook on Cryptocurrencies in 2021
Cryptocurrencies have indeed seen a fair share of investment and price movement in the current year.
- Bitcoin has a current total market cap of $1.1 trillion. Only 21 million Bitcoins will exist, and the current circulating amount is at $18.9 million.
- Many new altcoins have surfaced in the current year, for example, Dogecoin, Shiba Inu, etc
- The cryptocurrencies and new tokens are under surveillance of many new traders who look after making good profits
- The mining is becoming harder as more rigs are set up.
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