4 Statistics Everyone Needs to Know Before Investing in Crypto

Cryptocurrency is one of the fastest-growing investment opportunities in the world but it is complicated. Before taking the plunge, read these statistics to gain a better understanding of the intriguing world of cryptocurrency.

As the US dollar continues its slow decline investors are scrambling to find safe-haven assets. Some are choosing traditional options, such as gold or the Swiss franc. Indeed, since the spread of the coronavirus pandemic, traders and investors are considering new opportunities in a bid to recover losses and find shelter from the economic crisis.

Some, including institutional investors, are taking a serious look at cryptocurrency investing.

It’s not an easy market to understand. So to give you a hand, we’ve picked out four statistics we think every budding crypto investor should know before diving in.

1. Bitcoin Dominates More Than 60% of the Crypto Market

Bitcoin is still king of the crypto world and that isn’t likely to change any time soon. According to CoinMarketCap, bitcoin alone currently controls 62% of the total crypto market. Since August 2018 Bitcoin has dominated more than 50% of the total crypto market by market cap.

The Bitcoin dominance index is a strong indicator of the state of the crypto market generally. Bitcoin holds the role of “digital gold” so in times of turmoil it is often used as a safe harbor by crypto investors. If bitcoin dominates the market, it is usually a sign that altcoins are on the wane.

2. More Than 1,600 Cryptocurrency Projects Have Died

In 2018, there was an explosion of crypto projects, often taking the form of initial coin offerings (ICOs). Since then, according to Coinopsy, more than 1,600 cryptocurrency projects have died. This is either due to lack of funding or activity, or simply because the project was an outright scam.

This figure helps to demonstrate the high-risk nature of crypto investing. Many projects, even those with good intentions, will fail and it’s up to you as an investor to do your due diligence so that you aren’t harmed.

3. Bitcoin’s Fixed Supply of 21 Million Coins Could Hedge Against Inflation

Bitcoin is often flippantly described as digital gold but there’s more truth to this statement than you might think.

One of the big advantages of Bitcoin is that just like gold it has a fixed supply of tokens that can be mined. This prevents the creation of new tokens that could lead to runaway inflation as the market is flooded. Around 18 million of the 21 million total have already been mined.

Some analysts believe that this feature is slowly leading to Bitcoin becoming a hedge against inflation. This controversial argument is attracting more attention amid anxiety due to The Fed’s expansion of its balance sheet by trillions of dollars in the wake of COVID-19. Other central banks around the world are taking actions similar to the Fed’s.

 4. 83% of Business Leaders Think Cryptocurrencies Will Become a Strong Alternative to Fiat by 2030

Deloitte’s 2020 global blockchain survey revealed that executive’s attitudes towards blockchain technology have begun to change. Business leaders are now viewing blockchain in a more practical manner and are considering how to effectively implement the technology into their own operations.

Additionally, a rising number of leaders are beginning to view Bitcoin and other cryptocurrencies as an effective alternative, or even replacement, for traditional fiat currencies.

You Can Never Know Enough

Crypto investing is not for the faint of heart. In order to succeed, any budding crypto investor needs to make sure that they’re armed with the latest knowledge.

This list has hopefully helped you get started. But remember to take time to really understand the crypto market before risking your hard-earned cash.

By Toni Allen, who is a contributor and editor at Commodity.com, a leading resource on commodities markets and trading.  She has over two decades of experience running online businesses with a focus on technical publications. She has contributed to well-known websites such as Digital.com, HTML.com, Sitepoint.com and many others. Toni enjoys sharing insights that help new investors save money and avoid common pitfalls. Originally from Michigan, USA she is now based on an island off the west coast of Canada.  In her spare time Toni enjoys spending time with her family and exploring the outdoors — especially foraging for edible wild plants and mushrooms.