How to know if it is a good time to invest in cryptocurrencies?

Are you interested in venturing into the world of cryptocurrencies? We solve some of the most common doubts about this world of digital currencies.

The concept of cryptocurrencies and all that it entails is increasingly relevant today. However, there are still multiple uncertainties surrounding the world of digital assets.

Although we have talked about some of the most valuable cryptocurrencies of today, now that the price of Bitcoin - the best known digital currency - has exceeded 50,000 dollars (more than one million Mexican pesos approximately) for the first time in history agree With Coinbase, questions are raised about whether or not it is a good time to invest in these assets.

Coinbase data shows that the value of this currency has soared 70% this year alone, with strong momentum in late 2020, but how do you know if the momentum will continue?

The rise in its value projects the importance of this cryptocurrency and we have clear examples such as Tesla, which has already made more money in two weeks with Bitcoins, than after twelve years manufacturing autonomous cars.

The company invested $ 1.5 billion in the cryptocurrency, and since its value soared exponentially, Tesla has already generated in ten days what it had never done in a decade.

And not only that but other internationally renowned companies such as Uber are already contemplating the possibility of accepting Bitcoins as a payment method.

In an interview with CNBC, Dara Khosrowshahi, CEO of the company, pointed out that accepting the cryptocurrency in terms of currency to carry out transactions was going to be considered.

What is the business-level cryptocurrency boom?

To go into more detail and understand this boom, Adrian Sánchez Rodríguez, economist and founder of Momentum 3.0: XRP on YouTube, comments that the rise and importance of cryptocurrencies are centered on the urgency of streamlining the means of payment.

"The importance of cryptocurrencies today is based on the need to streamline the means of payment, savings to have deposits of value and in general to have financial options to move money as we move information," he said in an interview.

Regarding the case of Tesla, the economist explains that it is a fact that sets a precedent for other companies to follow that example. Other firms that have joined to accept this digital currency is also PayPal, one of the largest payment gateways in the world.

Sánchez Rodríguez emphasizes that Bitcoin is not the only cryptocurrency, since in the future there will be new projects that have their own place within the treasuries of large companies and banks.

Who wins with all this? Is it convenient for users?

The fact that cryptocurrencies are beginning to be considered by different entities, has raised doubts about how convenient it could be in certain parts.

“Several parties would be winning, including the government if it wanted to collect taxes on digital assets; A smart contract could be programmed and no bureaucracy would be required, so in that sense it also suits users. In general, everything that is innovation is good for society, although at first, it is not so beneficial for everyone. In the long term, the human being ends up adapting, so by evolutionary philosophy we are on the right track, "he said.

While it is true that cryptocurrencies have managed to excel in the last decade due to the lack of intermediaries, how do we know if this is a good time to invest?

The finance expert proposes a method that consists of averaging, buying a little each month and having a true discipline in this type of savings and investments and not simply looking for a specific moment.

"It is true that a moment can be very beneficial, but in the long term, the interesting thing is to average and accumulate projects that we like and that have good potential," he commented.

As a new investor, you probably have doubts about the reliability of each of the cryptocurrencies, but the founder of Momentum 3.0 recommends observing if they have survived over time as is the case with XRP, Bitcoin or Dogecoin.

“We have protection not because it is for the best, but because it has simply survived. If they haven't knocked him down, it will be much more difficult for the projects we have right now to be discarded.

Finally, the analyst concluded that the growth of this phenomenon will be very beneficial for everyone, so the population will have to educate itself to know how to invest and enter this field.