Three factors to consider when investing in the cryptocurrency market

In recent years, the cryptocurrency industry has added more and more interested parties. In fact, in the case of Colombia, it is estimated at least so Five million people use these assets.

Despite this growth, the aspect that still raises concern among those seeking to integrate into this market is… High volatility recordedBecause it may pose a risk to your investments.

(Join our WhatsApp channel here and get all the economic information from Colombia and the world).

But what is the reason behind this instability?

First, there are news and announcements regarding regulations, institutional adoption, technology updates, or unexpected events that can generate dramatic movements in the prices of some cryptocurrencies.

Added to the above is the perception that investors have regarding assets like Bitcoin, etc It can lead to sudden changes in demand and supplyWhich directly affects its price.

(See: Encouraging saving and investment, the main key to the economy)

Likewise, macroeconomic conditions (interest rates, inflation, market movements) can affect the behavior of these crypto assets.

Therefore, if you are planning to be part of this digital financial ecosystem, Take note of these recommendations.

First, it is important to dig deeper when it comes to cryptocurrency market volatility.

According to Andres Gomez, Director of CryptoMarket Colombia, although the decline and rise in prices of this currency is part of the normal cycle of any type of investment, The key is to look at the long-term behavior of the asset.

(More news: G20 and IMF recommendations for managing crypto assets)

With that clear, keep in mind the following:

1. Rising and falling prices are normal. Therefore, it is recommended to study, analyze, and be calm when negotiating.

2. If volatility bothers you, never invest money that you will need to use in the short term. That’s why it’s best to organize your finances, pay monthly fixed expenses, and if there is money left over, allocate it to saving or investing.

(Read more: Bitcoin: Five essential facts to know how this cryptocurrency works)

3. Although Bitcoin and Ethereum are the most popular assets in this market, it is important to remember that there are many other options. In this case, it is necessary to familiarize yourself with the project behind each one, who are its creators and what is their proposal to have more security in investing.

luggage