Putting money into cryptocurrencies like Bitcoin has been a hot trend in recent years. Since the market’s upswing towards the end of 2017, more people have started considering investing in cryptocurrency.
The current downturn in the cryptocurrency market has struck investors. However, many analysts predict that a new bull market will begin within the next few years.
Most people who want to acquire cryptocurrency can’t since they don’t have enough money. Either they over-invested in the previous bull run, or they spent all their cash scooping up significant dips in the market during the subsequent lousy market.
The good news is that if you ever find yourself in one of these predicaments, all is not lost. You can still put money aside for a rainy day and invest it more wisely the next time.
As it turns out, the way gamblers handle their bankrolls can teach us a lot about how to manage our crypto assets. More on bankroll management and its benefits for crypto investors will be covered below.
Simply put, the high uncertainty around cryptocurrency has discouraged many potential investors. These financiers favor commodities and the stock market above crude oil, cattle, and soybeans.
When you add the risk of hacking and exit scams to the inherent volatility of the crypto market, it’s easy to see why some people might be hesitant to invest there.
However, you could feel more at ease after learning the factors contributing to the extreme volatility of cryptocurrencies. Here are a few of the reasons behind the market’s short-term volatility.
Cryptocurrencies Have Not Yet Gained Wide Acceptance
Most bitcoin investments are undertaken purely based on speculation. Aside from Bitcoin, no other project has managed to gain widespread use.
The widespread use of Bitcoin (BTC) remains doubtful. The number of daily Bitcoin users continues to rise. However, the network appears unprepared to handle a high volume of transactions.
The 2018 Lightning Network update has facilitated faster Bitcoin blockchain transactions. Since BTC had severe issues during the 2017 bull run, when users often had to wait days for a transaction to be processed, this upgrade is much appreciated.
We won’t know for sure how well Lightning Network works until Bitcoin once again faces high congestion. The current consensus holds that Bitcoin isn’t quite ready to execute as many transactions per second as Visa does (up to 24,000).
Let’s get back to the meat of the issue. The use of cryptocurrency initiatives is low. There is optimism that crypto will become an integral part of everyday life because some projects are forging large-scale collaborations.
However, at the present moment, the vast majority of cryptocurrencies see negligible use. Given the high degree of speculation that underpins the market, dramatic price fluctuations are part for the course
Takeaway
If you want to invest in the cryptocurrency market, check the crypto bankroll management. When investing in today’s turbulent market, it’s helpful to think of your money as a gambling bankroll. Divide the funds into units and invest them prudently.
