Busting Common Myths About Cryptocurrencies

Bitcoin, launched in 2009, has been experiencing a dream run ever since. Numerous cryptocurrencies are operating in the market today with a combined value of more than $ 2 trillion. There are thousands of cryptocurrency millionaires after the recent mining activities.

The transformation in the investment perspective of most people due to cryptocurrencies is changing the entire landscape. It brings us to various myths surrounding crypto. 

This article highlights some of these myths and compares them with facts. It will help you make a better call while investing in these currencies.

Cryptos Are Real Money for Payment

The basic design of cryptocurrencies like Ethereum or Bitcoin tried to reduce the dependence on the traditional financial model. These include debit cards, credit cards, currency notes, or checks. Any two individuals can carry out a cryptocurrency transaction without a third party overseeing it.

In the current era, numerous cryptocurrency exchanges help carry out such transactions. The presence of numerous players and a high volume of non-active crypto coins often deter traders from taking positions in the market.

It is leading to an increase in transaction fees. However, significant growth is visible from past trends.

A Good Investment Opportunity

A proliferation in the amount invested in cryptos took place over the last few years. The landscape saw numerous changes as major financial institutions and banks came on board. This aspect has led many investors to get a higher return on investment. 

But you must remain vigilant in a market that pulls investments worth billions of dollars and a large pool of individuals. Tight control of cryptocurrencies by computer algorithms keeps supplies in check.

The capping is in place for the number of Bitcoins that can get added. A maximum of 21 million Bitcoins can be available in the system. 

It is not just the scarcity creating value but also a steep demand for crypto. The high value of these cryptos is due to the popular belief by many that these instruments will serve as a good investment tool. If this belief goes out of the equation, cryptocurrency values could experience a sharp decline. 

Altcoins Are the Future

Bitcoin has been in existence for the longest time. It is precisely the reason why cryptocurrency investors and speculators consider it to be a benchmark. However, numerous cryptocurrencies, such as Dogecoin and Litecoin, are available today.

The establishment of certain altcoins like dogecoins took place around a meme. This aspect does not qualify it as a suitable instrument for financial transactions. It is worth mentioning that there are no underlying factors that drive such coins. A simple tweet or political event can change the trajectory of such cryptocurrencies.

The technology in use by Bitcoin can seem outdated with new launches of cryptocurrencies. However, the volume of transactions and Bitcoins contributes to the major chunk of the crypto topline. Therefore, altcoins or meme coins will not cross Bitcoin in the future. 

Crypto Will Topple Fiat Currency

Established financial institutions like Morgan Stanley stated cryptocurrencies pose a challenge to dollar supremacy. Such a stance is debatable, and various aspects should be part of the consideration set.

There is no backing behind crypto except for the people’s faith. Any legal tender, like the US dollar, has federal backing. The investors’ trust in the currency is high, as they know their money will not get wiped off even during a turmoil. That poses a significant difference between crypto and fiat currency.

It is worth mentioning that there are new stable coins with backing from the government. For such cryptos, the cryptocurrency price gets altered by the currency backing. So, the dollar can become a lesser-used currency for payments, but its supremacy will not devalue sooner. 

A Fad That Will Vanish Soon

A transformative change is visible via cryptocurrencies. There are numerous players, like OKX, operating in this space and providing investment vehicles to traders. There is a significant change in finance and money due to digital currencies.

The rapid transactions and flexibility are allowing more people to get on board. This aspect makes it look like this phenomenon will remain for longer than anticipated by most experts.

As you can see, you need to conduct research while getting into the crypto market. The above aspects will help bust the common myths that are often associated with crypto. We hope it will help you make better decisions while investing in crypto. It is essential to go through the data sets properly before finalizing a trade.

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