It is always difficult for a novice investor to decide on the choice of assets for investment. Especially when it comes to choosing the first cryptocurrency.
Is it worth investing in digital assets in 2023
Cryptocurrencies are gradually conquering minds, hearts, and investment portfolios. Despite the relatively large camp of crypto-sceptics who regularly predict the imminent collapse of the cryptocurrency market, blockchain technology and digital assets are finding new application areas.
Investing in any asset is to make a profit in the long term. However, the prospect of profit is always accompanied by the risk of loss. And cryptocurrencies are not an exception, but rather the opposite, a vivid illustration of this rule.
Pros of investing in cryptocurrency:
- Digital assets can be considered universal, and they are suitable for investment for any period.
- Large selection of assets.
- Good risk/reward ratio.
- The crypto market is growing fundamentally.
Cons of investing in cryptocurrency:
- It is possible to tighten the pressure from the regulators.
- In the near future it is not excluded the resumption of the fall of the market.
What coins to choose for a novice investor
Experienced investors recommend focusing on coins from the TOP-10 by market capitalization. They are the most predictable of all digital assets and most of them have stood the test of time. Special attention should be paid to diversification when forming an investment portfolio, as this is important to minimize possible losses.
Part of the capital should be allocated to purchase stablecoins pegged to the US dollar. Please note that the BUSD to USDT exchange rate also deviates slightly from parity, and the discrepancies with rates in pairs with other coins are more significant. Therefore, it is worth having several stablecoins in the portfolio.
Is it worth investing in ETH?
During 2022 and the past months of 2023, Ethereum has demonstrated high volatility and surpassed even Bitcoin in this indicator. This means that you can earn quite quickly on exchange rate fluctuations.
In addition, the Ethereum blockchain became the first platform for creating and deploying smart contracts and opened a new page in the history of the economy. Many market participants share the opinion about the big future of business process automation. This is one of the key reasons for choosing Ethereum to invest.
Relatively recently, analysts drew attention to the gradual desynchronization of ETH and Bitcoin price movements. The complete independence of the market behaviour of the leading cryptocurrencies is still far away, but the trend is definitely encouraging. Among the strengths of ETH, it is worth noting its high liquidity. A coin can be sold at any time without any problems on almost any crypto exchange, and it is traded not only in pairs with stablecoins and fiat currencies, but also with BTC and popular altcoins.
USDT as an investment tool
USDT belongs to a special class of crypto assets called stablecoins. The main distinguishing feature of stablecoins from classical cryptocurrencies is low volatility, which is achieved by tying the coin’s value to traditional assets. In the case of the USDT, the role of the reserve asset is played by the US dollar.
The coin serves as a bridge between fiat currencies and digital assets. USDT is almost universal, it can be exchanged at any time for any other asset on any centralized exchange or https://letsexchange.io/exchange/usdt-to-eth.
This coin is convenient for saving and performing current calculations; it is a safe-haven asset during periods of high volatility. It will not be possible to earn on fluctuations in the USDT exchange rate against the dollar. Still, part of the capital in a balanced cryptocurrency portfolio should be kept in stablecoins.
When choosing digital assets for long-term investment, you should not focus on one coin. ETH and USDT do not exclude but optimally complement each other.
