Why people invest in cryptocurrency lets understand Psychology of Cryptos

Why invest in crypto?

The concept of blockchain technology and decentralized finance attracted investments across the globe. Every user transaction is broken down into multiple chains of a single transaction. These transactions are in turn stored in user computers across the globe. The process of validating each of these transactions is known as data mining and this, in turn, consumes a huge volume of power and internet consumption. Another factor that attracted global investment is decentralized finance. Lack of intervention by regulatory agencies, central banks, and any tax regulating authority works like a pro and con for crypto investment.

Despite the price volatility and huge market fluctuation, there is an increasing demand for crypto investments. Let us look at certain factors driving the psychology of investors driving investments.

Cryptocurrency has become a symbol of status and identity

Today, holding a crypto investment is a sense of pride. Be it your working group or friends circle, as an investor, you would feel proud about this investment model. Yet another factor is the reduced knowledge about this investment model. Not everyone is aware of this investment model or shares the same risk appetite. Hence, making your investment in cryptocurrency makes you different from other investment decisions.

Price liquidity and security of transaction

While it is true that crypto investments carry a huge volume of risk, it is also true that you can liquidity this investment. You can easily convert this investment into fiat currencies, other assets like gold and silver, or tangible and physical assets like real estate. Also, every crypto transaction has its level of security. A transaction cannot be completed until dual authentication and another verification process are completed. But, one important point that you might need to note is the security of your private key. Make sure that you always keep your key secured so that any third party is not able to access your transactions.

Flexibility in trading

Unlike the traditional stock market, investors are not tied down to any particular market timing for trading. Users and investors can carry out their trading activity 24*7 all through the year. There are no regional specific or other national holidays that affect the trading activity. Also, another important factor of attraction is the number of times the prices of each crypto varies. Between the cycle of 24 hours, an investor can make huge benefits or lose their entire money. It all depends on how the market behaves during the day along with other external factors attracting market conditions.

It is investment targeting long-term

Despite price fluctuation and market volatility, cryptocurrencies are the best option for long-term investment. Bitcoin has been able to stay active and provide profits to its investors. In November 2021, the price of Bitcoin reached an all-time high at $60K and reduced to $40K in 2022. This is a whopping increase at 400% compared to its launch price in 2009. In addition to Bitcoin, other altcoins currently in the market have also been able to provide similar returns. Popular names like Solana, Ethereum, Polkadot, Cardano, Dogecoin, and Shiba Inu have been gaining attraction and investments as well. While these coins are not pricey as Bitcoin or Ethereum, there is a promise for long-term benefits using this investment.

The cryptocurrency market will continue to grow. As an investor, you need to understand the investment terms before funding. You also need to understand and have a clear estimate of your risk appetite. One other important piece of advice that you can keep in mind while making your investment is to diversify your portfolio. Do not go ahead and make your entire funding on Bitcoin or Ethereum. Instead, try to invest your funds in a larger volume of cryptos that are low in prices. This will allow for better returns on your investment.

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