A Case for Crypto Currencies: Capitalizing on Market Volatility.

Cryptocurrencies once a fad, are six years old and have steadily gained relevance and popularity as the World is increasingly fraught with conflict and uncertainty, they are seen by Investors as a tool to capitalize on market volatility. Market volatility, caused by the COVID-19 pandemic and the geopolitical risks has forced Cryptocurrencies to become long-term investments that offer unique advantages and potential benefits to consumers, seen as a hedge against inflation and poverty.

Cryptocurrencies, a generally volatile investment, experience rapid fluctuations within short periods. This may be daunting for some investors, but it presents lucrative opportunities for traders as they can utilize price movements to generate profits for stakeholders. The market operates in downward and upward trends (known as bear and bull respectively). Logic dictates that the simple saying “ Buy low, sell High” is evident when the market is bullish (upward trend) and conversely, in bearish times, traders use short-selling to profit from falling prices.

The second reason why cryptocurrencies are traded is because it involves a huge amount of technical analysis as it involves analyzing price charts, patterns, and indicators to make informed decisions. It provided valuable insights into market trends and potential price movements by studying historical price data and applying theories and trends to make future decisions that increase their chances of profiting from short-term price movements.

Thirdly, investing in cryptocurrencies is seen to be a bulwark and vanguard against risk and manages risk effectively. While holding cryptocurrencies exposes investors to significant market downturns, trading provides opportunities to mitigate risks. This can be done through stop-loss orders which automatically sell a cryptocurrency if its price reaches a predetermined level. Furthermore, the crypto market operates 24/7 providing traders with ample liquidity and trading opportunities. They can be sold and bought at once without a significant drop in prices, hence traders can take advantage of short-run market movements to execute trade on time.

Lastly, it can be a valuable learning experience for investors as they gain practical insights by trading in the market hone their market strategies, and learn more about price behavior. This hands-on experience helps traders develop essential skills such as risk management, decision-making, and emotional discipline.

In Conclusion, while holding cryptocurrencies can be a viable long-term investment strategy, trading offers unique advantages and opportunities for investors in the crypto market. Cryptocurrencies, allow traders to seize opportunities in volatile markets, hence calling for greater technical analysis and managing risk effectively, so essential trading skills are developed and honed. Traders should approach the market with a well-defined trading plan, conduct thorough research, keep abreast of contemporary market trends, and seek guidance from experienced traders.

Disclaimer: This information is for informational purposes only and should not be considered as financial or investment advice. Trading Cryptocurrencies is risky and an expert financial advisor should be consulted before engaging in trading activities.

?This Article was conceived by Charles Martin, an expert Financial Manager and my personal friend and mentor who encouraged me to write the Article and it his idea of crypto-currencies and their role in preventing market volatility. I remain ever so grateful to him and his unflinching support.

?