Is crypto coin a good investment?

Crypto coin, cryptocurrency, crypto, digital funds, digital assets… There are many names for this emerging yet popular asset class. In essence, crypto is much more than an investment opportunity. Cryptocurrency was originally designed and launched as a decentralized, alternative currency to traditional FIAT money (dollars, euros, yen, etc.) following the 2008 Wall Street Crash. As word of these digital assets spread, they have evolved into a solid and functioning ecosystem, as well as a legitimate asset class, redefining how we perceive value and conduct transactions in an increasingly interconnected world.

But, is crypto coin a good investment? The answer will depend on who you ask. In this article we explore the ups and downs of the crypto market, why crypto can be a great investment for some, but devastating for others, and where the experts predict crypto going in the near-medium future. 

The ups and downs of the crypto market

Among investors, the crypto market is perhaps best known for its extreme volatility, which creates both significant opportunity and risk. When Bitcoin was first launched in October 2009, each crypto coin was valued at around $0.00076, a price based on the cost of electricity required to mine it. The first significant price milestone was seen in 2010 when Bitcoin began trading on exchanges, and reached $1 for the first time in February 2011. In December 2017, Bitcoin reached its first all time high of approximately $19,783, and in March 2024, Bitcoin exceeded $73,000. 

Other cryptocurrencies, such as Ether, Solana, and Cardano, have also experienced their own dramatic price fluctuations and milestones. Ether, for instance, reached an all-time high of approximately $4,878 in November 2021, driven by the growing popularity of decentralized applications and smart contracts on the Ethereum blockchain. Solana and Cardano have also captured investor interest, with Solana peaking at around $258 in November 2021. However, like Bitcoin, these digital assets are subject to extreme volatility, and just as their prices inflate, they can also shrink by thousands of dollars, sometimes overnight. 

Is crypto coin a good investment?

As seen above, crypto can be a good investment for some due to its potential for high returns, and the flexibility of diversifying a crypto portfolio between several different digital assets. Many early adopters of Bitcoin and other cryptocurrencies have seen substantial RoI, having been lucky enough to capitalize on the market’s explosive growth and the increasing acceptance of crypto onto the more mainstream investment and finance sectors. 

However, it is precisely this volatility that can be devastating for other investors. Sudden market fluctuations, often unpredictable, have caused some to lose thousands overnight. Rare scams and scandals (such as FTX) have also resulted in huge losses, often without repercussions given the autonomous and decentralized nature of the blockchain. That being said, there are always risk-management protocols that can be put in place, such as stop loss orders, to minimize the risk of loss. Ultimately, success in crypto investment will depend on a careful balance of risk, research, planning and diversification. 

The future of cryptocurrency as an investment

The future of cryptocurrency as an investment looks promising, particularly when focusing on what is left of 2024. According to Forbes, Ether (the native crypto of the Ethereum blockchain) is evolving beyond a mere transactional currency to become a potential “store of value” for investors to enhance their wealth. Many are attracted to the project’s protocol, which supports decentralized applications (DApps) and smart contracts, among other innovations. 

While Bitcoin also shows long-term potential —strengthened by improvements in scalability and ongoing interest in Bitcoin ETFs— its future does face challenges, including scrutiny from governments and concerns surrounding energy consumption derived from mining. As for Solana, its price has remained relatively stable during 2024 so far at between $120 and $160, but analysts believe a solid bullish trend is approaching, with some even predicting that Solana will break the $200 threshold by December 2024. 

For more on crypto as an investment, discussions of current crypto trends, and how to integrate crypto payments into your business’ workflow, visit www.forumpay.com, or get in touch with our sales team to discuss any questions you may have.