The crypto market is a place where people buy, sell, trade, and swap digital currencies. These currencies are called “coins” or “tokens.” They may be used as investments, but more often they are linked to a specific technological product that is being developed or rolled out. While this can make them less risky than stocks, it can also make discerning which projects are viable challenging. It can be helpful to talk with a financial advisor who is familiar with cryptocurrency and has an eye on emerging trends.
Unlike stock markets, which are regulated and overseen by a body of experts, there is no central authority over the crypto market. Instead, exchanges like CoinMarketCap list hundreds or even thousands of coins and tokens that can be bought, sold, traded, or swapped. The prices of these coins go up and down based on supply and demand.
Some cryptos are designed to be used as money, such as Bitcoin and Ethereum. Others have other uses, such as supporting decentralized applications, serving as a blockchain oracle, or providing in-game goods. Still others are intended as a form of investment, such as NFTs or tokenized real estate.
Some investors buy and sell cryptos over the course of months or even years, a long-term strategy that can produce significant returns. Other traders, on the other hand, focus on short-term trading, buying or selling a coin when it hits a certain price point or moves away from it. As with all types of investing, it’s important to do your research and consider your own financial situation before making any decisions.
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