What's the Long-Term Future for Cryptos?

Why are smaller cryptos like Dash and Cardano getting more attention?

Pacing Yourself in the Crypto Marathon

The characteristic volatility of cryptocurrencies has made them a popular CFD investment instrument over the years, as investors are able to take advantage ofprice movements in both directions. However, some believe that as crypto grows in popularity, such volatility may begin to wane. As of JST Capital puts it, ‘In the long-term, as crypto becomes more and more normalized as an asset and more people trade in it, that it will tend to be a less volatile asset class.' Another factor that may attractinvestors is the improvement in the regulation of cryptos, so that there is more transparency in transactions and clarity about what is allowed. Technology is being upgraded too, for example on the Cardanoand Ethereum networks. Overall, there seems to be a lot of recent buzz about the crypto market, and this is despite the kind of sudden drops in crypto value we've seen recently.For those involved in CFD crypto trading with the iFOREX platform, let's take a look back at the recent story of the crypto market, including how many cryptos are there in the last two months, and touch on five big cryptos being watched by traders.

What Happened in September?

In early September 2021 there was a big sell-off in the crypto market, resulting in the entire crypto market losing16% of its value within a single day, yet recoveries were made. Even then, forecasters were predicting Bitcoin would rebound to hit anywhere between $67,000 and $100,000 by the end of the year. Take ETH as another example. It sank 10.5% at the start of September but was still up 12% in the previous month. ADA was falling even before the big sell-off and fell a further 15% in a week. However, keep in mind that it was still up 65% compared with a month before.

Later in September, having already banned crypto mining earlier this year and forbidden financial institutions from serving crypto-related companies, China declared illegal any trading in cryptos and their derivatives. Shortly after BTC fell by 6%, ETH by 8%, and Dogecoin by 7%. Also consider that Bitcoin has increased in value by 7000% in the past five years, 300% in the past year, and 46% year-to-year against the dollar. Many traders are unmoved by short-term crypto price movements and believe that the long-term still may hold both opportunities and risks.

The Big Five

The number of cryptos out there is hard to keep track of. How many cryptos are there in the last two months? It seems impossible to know. Many fade away and are forgotten but some, like these five, are getting plenty of attention.

• Dash, released in 2014 by Evan Duffield, offers improvements on bitcoin's blockchain technology which allow it to offer better transaction privacy and higher transaction speeds. The identity of Dash users is never revealed, nor can transactions be traced back to their source. The price of Dash started to climb in 2017, hitting a high of $1540 in December of that year.
• Dogecoin is also friendly to the environment and is viewed by many traders as one to watch. Right now, 1662 merchants around the world use Dogecoin, which actually uses a simpler cryptography than Bitcoin.
• Cardano flourished in 2021 with a growth of 1,200%. Compare this with BTC and ETH, which have seen growth of 53% and 330% respectively. Like Ethereum, it is a blockchain platform for building smart contracts, which organize agreements to work without time loss or intermediaries, with all parties certain of the outcome. Cardano's Proof of Stake system is eco-friendly and it offers very low transaction fees.
• Ethereum is a giant blockchain network and the reigning king of smart contracts. The new crypto sectors that rely on Ethereum have pushed it up to $1,000 in 2021, and the last time that happened was in 2018.
• Bitcoin has not been enjoying the kind of growth that the smaller coins have, anda big part of the reason for this is that smaller coins by definition canexperience higher percentage price moves, according to Greg King, CEO of crypto services firm Osprey Funds.Bitcoin, whose price movements are often shadowed by the smaller coins, is boosted by long periods of low interest rates, which we are experiencing now because fear of inflation can enhancethe appeal of digital currency.

The Final Word

Before CFD crypto trading with the iFOREX platform, it's important to do your research into the many factors which can affect the prices of cryptos. Some, like Bitcoin, are more well known, while we're still learning about the price quirks of newcomers like Dash and Cardano. Sign up today and take advantage of iFOREX's signature educational program including in-depth trading guides, interactive video tutorials, and 1-on-1 training with a live trading coach who can help develop your skills at your own pace.