Hello friends. In this video, I want to touch on the topic “is cryptocurrency a scam or not”? Is it realistic to make money on the crypto market and what are the chances in terms of risk-reward ratio? I’ll also tell you how the digital money market works and its relationship to the bond market and the S&P 500 index. Let’s get started!
How does the cryptocurrency market work?
Many of you have already heard that the cryptocurrency market is decentralized and cannot be controlled by any organization, company, bank, or even government. In the history of Bitcoin on botcryptotrade.com, I already said that the main idea of creating the world’s first digital coin was the independence and decentralization of the world system. It was important to create anonymous coins for fast transactions and payments online without the participation of intermediaries – BTC.
Following Bitcoin, other altcoins began to appear, which fully or partially copied the basis of BTC, or were a unique product. Other popular tokens are ETH, BNB, LTC, XRP, ADA, ZIL, THETA, LINK, and many others. However, among this digital money, there are quite centralized projects that are controlled by their developers, for example, ADA and XRP.
Bond and cryptocurrency market
All markets are characterized by the same laws – volatility, cyclicality, phases of growth, decline and flat, exposure to news, and fundamental factors. However, the nature of the markets is very different. Unlike, for example, the bond market or funds, which are more than one hundred years old, the cryptocurrency market is the youngest and most volatile.
The capitalization of digital money is much less than that of bond markets and funds, but tokens are easier to manipulate. Since there is less liquidity here, then if you sell just a couple of billions in BTC directly through the exchange, you can bring down the value of Bitcoin by almost 50%. Tokens are subject to social, economic, and political factors that affect their value.
Cryptocurrencies and the S&P 500 Index
However, not all fundamentals can operate on digital money. Let’s say the deterioration of the financial health of Amazon, Google or Apple will not affect Bitcoin and other altcoins. As for the news about the onset of the global crisis, it has the same effect on tokens, the fund, or the bond market. There is even some correlation between the token market and others, for example, the S&P 500 index.
Analysts saw a strong connection between cryptocurrency and the S&P 500 back in 2019. The impact was strongest in 2020, after the coronavirus pandemic. Investors saw in Bitcoin an analog of gold since it is not associated with financial markets and its supply is limited. BTC and some other cryptocurrencies have even come to be called “digital gold”.
Therefore, the main conclusion is whether cryptocurrencies are a scam or not, you can answer that no! Of course, there are “shitcoins” and scam projects, but the top 50 coins according to coinmarketcap are trustworthy to trade. You should trade tokens taking into account the risk management and enter the traces in parts so that there is money left for averaging or for safety orders in the 3commas bots.
The video on the topic “cryptocurrency is a scam or not” has been completed. You learned how the digital money market works, its relationship with other markets, in particular with the bond market and the S&P 500 index. Crypto is a real monetary asset that you can use to pay or buy something. This is not a scam, but one of the tools for investing or keeping money in the long term. That’s all until new videos on botcryptotrade.com