Can we classify cryptocurrency as safe? What makes a crypto a safe investment??
We absolutely can classify certain cryptocurrencies as safe investments.
In one of my previous article's 'Crypto Value' I discuss major factors one must take to analyze the value of a cryptocurrency. The same factors can be attributed to the security of any investment.
These specifically are:
- market share
- maturity
- volatility
- long term prospects
- technology
What I mean by "specifically" is there are two spectrums to an investment's security:
- assessment of the individual asset
- analysis of it's market
Therefore we must analyze both to gauge how secure our investment is. For example a crypto could be very promising, but a bull market could render it's price overvalued, thus we would want to conduct analysis on both the market and the asset to manage risk.
To analyze a market we must account for the following
- Maturity
- Market Trends (bull or bear)
- Volatility (likeliness to change value)
- Long term prospects
These metrics could change at any given time, thus it is necessary to account for each one. This can be exemplified by the volatility levels of the early coin market compared to those of now.
As you probably noticed both metrics for analysis are almost virtually identical. This should make risk management much more facile for the investor as a market can be assessed as a collective of products.
Anyways I hope this info helps. If you enjoyed or learned from the information given please follow, like, share, or comment. I'd love to hear you guys feedback. Thanks :)