The crypto industry is going through a period of strong turbulence, with major movements detected for most assets. In particular, it is Bitcoin to monopolize the attention of insiders, in fact, after exceeding 61 thousand dollars in mid-March, the cryptocurrency invented by Satoshi Nakamoto corrected downwards.
This is a normal trend in some respects, in fact, taking into account the levels reached by the asset, it is understandable liquidation of some positions by investors. Furthermore, cryptocurrencies are now treated as financial assets, therefore they are subject to a series of factors that can influence their price.
From the analyzes by the professionals of Bestbrokerforex.net, Between the best cryptocurrencies to buy now there are some assets that are performing particularly well, such as Ethereum, ripple and Theta. As for emerging cryptocurrencies, however, they need to be monitored Uniswap, Polkadot, Avalanche and 1inch, projects capable of offering interesting growth prospects in the medium and long term, even if the risks must never be neglected.
Factors that can influence the crypto industry
Right now, cryptocurrencies are exposed to a number of external and internal factors, which must be carefully analyzed before investing in these speculative assets. First, it is essential to consider the investor needs, in fact, now that even the large hedge funds have important positions in cryptocurrencies, the price is linked to large buying and selling flows.
In some cases, even a significant devaluation could just be a physiological tendency, linked to the needs of easing of positions by institutional investors. In others, however, attention must be paid as the phenomenon could be structural, therefore due to non-positive forecasts on the future of cryptocurrencies and its long-term potential.
Also, you should always monitor the macroeconomic data, in particular the performance of the global economy and the monetary policies of central banks. When the money supply is high, a greater propensity towards high-risk investments is understandable, so if the Fed and the ECB keep rates low and money availability high, cryptocurrency prices usually rise and vice versa.
The same applies to i business cycles, as expansionary fiscal policies may impact the prices of crypto assets, increasingly seen as hedge investments against theinflation like gold. These parameters are complex to analyse, for this reason it is essential to study to improve one's knowledge, using the technical tools for financial analysis with the aim of creating effective investment strategies.
What are the risks today for cryptocurrencies
There are currently two main risk factors for investing in cryptocurrencies. The first is related to possible wave of regulations on BTC and company, especially after the harsh words of the Fed's number one, Jerome Powell, who indicated that Bitcoin is a speculative instrument and that it is urgent to intervene for greater transparency.
Similar positions were also adopted by US Treasury Secretary Janet Yellen, with a valuation of Bitcoin of extreme unreliability, while Christine Lagarde president of the ECB said that BTC is not a currency and central banks will never buy these financial assets. There China it even came to ban crypto trading in 2017, although despite the ban, investments in cryptocurrencies are growing strongly in the Dragon Country.
Another risk factor are i vaccines against Covid-19Indeed, an improvement in the health crisis could restart the economy as early as the second half of 2021, especially with the USA getting ever closer to the 200 million vaccinated with the Biden government. L'increase in economic activity it could drain investments from crypto assets to other sectors, reducing the volumes and prices of digital currencies.
These aspects must be evaluated with particular attention, in fact it is not certain that the cause-effect relationship is always so obvious, but it is essential study each factor in depth and try to understand how the markets and investors move. Without a doubt, cryptocurrencies are now one of the most appreciated assets in the financial sector, not counting the possible developments of blockchain technology for a global society grappling with the digital transition.
