If you also invest in virtual currency, what is the latest buzz in the currency circle? I believe you are also very clear, but today I don’t want to involve too much about the unauthorized embezzlement of investor funds, data privacy, lies or conspiracy theories on the FTX cryptocurrency exchange. Today I just want to start from the perspective of an ordinary person. Let's discuss how to invest your hard-earned funds, especially in the current situation of rapid currency depreciation, should you still invest in cryptocurrencies?
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Hello everyone, I'm Charles , if you ask me if I should deposit my funds entirely in a cryptocurrency investment trading platform, my answer is no. exist What is Web3.0 I mentioned in the article that Web 3.0 is a very forward-looking Internet technology. It is undeniable that its development potential is huge, and it is likely to bring a revolutionary future to mankind. Before the endowment, various forms of investment projects / industries are still full of many uncertainties and high risks. The industry mentioned here naturally also includes cryptocurrency exchanges driven by demand.What is a cryptocurrency exchange
A cryptocurrency exchange is a business that allows customers to trade cryptocurrencies against other assets, such as converting traditional fiat currency (USD) into cryptocurrency (USDT). Cryptocurrency exchanges can be market makers, matching platforms that charge bid-ask spreads as a service for trading commissions, or pure commissions. To put it simply, it is like the stock exchanges we are familiar with today, such as HKEX in Hong Kong, SGX in Singapore, and KLSE in Malaysia. Investors cannot directly invest/purchase cryptocurrencies, because it involves too much technical work, so the cryptocurrency exchange acts as an intermediary among them. Investors only need to transfer the currency in their hands to the exchange, and then convert the cryptocurrencies. You can start trading.In order to expand their market and influence, many exchanges will launch various operations to attract investors to deposit funds. There are a variety of styles, and the most eye-catching ones include earning high interest every day, and the interest offered is even higher than that of banks. Term Deposit Rates! It is because of this that many people put most of their funds into this high-interest "fixed deposit".
Cryptocurrencies VS Stocks
There has never been a lack of investment opportunities around us. Today, I still firmly believe that the blockchain is our future. The more mature the development of the blockchain, the investability of cryptocurrencies will increase. An investment that the world expects, but even so, I dare not recommend any cryptocurrency exchange casually, because so far, no country or institution has given any endorsement. But if you really want to step into this field, you might as well see if you can afford the following three factors before deciding whether you should start investing money.Three Factors That Determine If You Can Afford to Invest in Cryptocurrencies
1. Regulatory differences, substantive differences
The stock market buys stocks, which are securities issued by every listed company to raise funds. If you invest in a company’s stock, you are a shareholder of the company, which means you have a share in the company. You participate The development of the company, so when the company makes money, you can naturally enjoy various rights and interests and get dividends, and the listed companies in the exchanges of various countries are subject to strict supervision; while the currency market buys digital tokens, the essence of tokens It is a string of digital codes. Buying cryptocurrency is equivalent to truly owning digital currency. You can choose to store it in an exchange or apply for a separate online wallet to store in your own wallet, but no matter whether you put it in a cold wallet or a hot wallet. It can’t bring you any income, so many investors will choose to store it in cryptocurrency exchanges and get daily interest, but one of the disadvantages of cryptocurrency is that it has no clear regulatory position. Compared with the strict supervision of stock exchanges, if the governments of various countries regulate too much, they may violate the original intention of cryptocurrency decentralization and stifle industrial innovation; The LUNA coin incident and the FTX exchange incident, where people lost their money, can really change the situation by investors holding the currency, but how can we ensure that there is no black box operation that affects the willingness to vote?
▲The world's second largest cryptocurrency exchange, FTX , filed for bankruptcy without warning, which had a great impact on the virtual currency circle. The picture shows FTX founder and former CEO Sam Bankman-Fried . (Photo/Associated Press/Dazhi Image)
2. Price change mechanism
The stock market in each country will have different limit-up and limit-down mechanisms, which means that the rise and fall of the stock market is limited. For example, in March last year, the U.S. stock market experienced 4 circuit breakers within 10 days, which is a good example. , most stock markets cannot rise or fall more than 10% in a single day; on the contrary, the currency market will not have any restrictions, it can rise several times or dozens of times a day, and it may be cleared at any time, such as the most classic example of the LUNA coin incident . The market is open 7 days a week, and the time and energy required to watch the market is far more than the stock market with 5 trading days a week.
3. Differences in market valuations
Investing in stocks is essentially investing in the stocks of an actual company. The company's quarterly earnings report discloses the company's expenses and profits very well, and is a good reference indicator for investors. Companies that can be listed have their own business models and mature products that have been introduced to the market, and people invest in the company's operating conditions and development prospects; while the value of cryptocurrencies often fluctuates with community sentiment, Most of the trading strategies and valuations of cryptocurrencies rely on factors other than business information, so cryptocurrencies are extremely lack of predictive reference indicators similar to stocks, so when investing in cryptocurrencies, we simply do not have corresponding data for valuation .
▲ Cryptocurrency FTX. (Photo/Associated Press/Dazhi Image)
So, does that mean I shouldn't invest in cryptocurrencies?
No, it is appropriate to invest in an appropriate proportion, for example, 95% of the funds are invested in stocks, and 5% of funds are invested in cryptocurrencies, so as to avoid unnecessary risks as much as possible. Comparing cryptocurrencies and stocks, those who determine the ultimate investment goal must recognize that demand brings opportunities, demand will bring crowds, and crowds will bring hot money. You need to know that it is people, not dogs, who come to buy dog food. How to increase the value of that hard-earned money depends on how much time you are willing to spend on the preparation work before investing the capital. A layman can never make money from an insider!Cryptocurrency Trading Platforms VS Stock Trading Platforms
For cryptocurrency exchanges, there are many options in the market, but I will not give any advice, maybe I will give advice when the blockchain industry matures; if you choose to invest in stocks in the end, then you can consider Moomoo as a platform, because For a busy person, preparations such as analyzing industry trends, forecasting trends, and searching for timely news are very energy-intensive and time-consuming, and it is difficult. However, Moomoo has the above functions and actively pushes the financial reports of various companies for us. Timely news, real-time news includes news such as cryptocurrencies, and they are all Chinese-version analysis reports. If you want to know more about this, you can read this article about the five advantages of Futu Moomoo .
free registration:
Singapore/ Southeast AsiaAustralia
in conclusion
▲Cryptocurrency trading is becoming more and more popular, but if you are not familiar with it but enter the market rashly, you may suffer heavy losses. (Photo/Associated Press/Dazhi Image)
How to choose an investment platform that suits you is very important. The cryptocurrency market will never lack projects that can earn several times in a few weeks, but whether you invest in cryptocurrencies or stocks, you should focus on investing in In the long run, invest steadily and be cautious at every step. Unless you are a professional day trader with sufficient funds and have a lot of time to trade, try to avoid all short-term market fluctuations, and whether you can add value to your funds depends largely on your understanding of the industry. If investors are after a predictable, long-term investment strategy, stocks are a better fit. If investors want to deploy cryptocurrencies early, they can allocate funds appropriately, but it is really not recommended to store all funds in cryptocurrency exchanges.
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