By: Ruzaan du Plooy

Cryptocurrency- An Investment?

Recently with the COVID pandemic, more people have needed to look for alternate forms of income. With the stock market crash happening within the first few weeks of the pandemic, it was apparent that investing in the stock market might not be a right fit for everyone. This is where cryptocurrency comes in; it is a volatile market with the potential for massive monetary gains. With the possibility of gains comes substantial risks, and therefore a possibility for loss. The stock market is known for its investment potential; many financial institutions are available to help decide where to invest your money for optimal return. One can begin their stock market journey through a bank, but starting to trade through an exchange can happen instantly, where users can freely trade, 24 hours a day 7 days a week.

What is an investment? An investment is generally a choice of where to put one’s time or money. From this definition, there is potential for growth without further work from the investor. While trading in the stock market, there are two methods for receiving a return. The first is dividends, where a company will pay a small percentage of your investment back to the investor, generally a small trickle of passive income. Dividends vary by year, and between investments, ranging from an average of 0%-30%. The other method is to buy low and sell high, which is the most common method of trading. To be successful, one needs to accurately predict the future market value of a particular asset. Once the market value has increased enough the stock is sold for its respective worth. Generally, stocks increase in value slowly over many months, and investors see a slow return, but there are exceptions. While with cryptocurrency trading we can expect quicker return with the unpredictable markets. 

Crypto trading is extremely volatile but offers more customer support and information than is available for the stock market. If you want to have full control of your investments, crypto trading is the preferred method. Why is trading in a volatile market such a big lure for many investors? Volatile means that the potential loss and gains are generally large, which means that an investor can make a lot of money over a short period because the market is consistently making large fluctuations. The large fluctuations that are seen monthly in the stock market happen weekly, if not daily, in the cryptocurrency market. 


Where can you put your investment to retain its value? As with banks, when you sell your stock, it can be converted into a national currency that has a nearly consistent value. While you generally trade one coin for another, how do you know that the coin you acquire will keep its value? This is another area of the volatile market within cryptocurrency, as you need to trade within an exchange that you can “cash out” from or withhold your money from the fluctuations of the market. Outside of these specific exchanges, what does everyone else do to maintain their trading value in this volatile market? The answer is stable coins; stable coins are coins within the market that often hold their value over long periods. The most well known stable coin is Tether, while other stable coins have maintained value,  comparatively, Tether is by far the best option in our opinion. 


So is cryptocurrency a solid investment? Yes, cryptocurrency today is a good investment with various stable coin options available. Without stable coins, cryptocurrency could still be a viable investment option. With stable coins, trading between more volatile coins and stable coins gives investors the most security for holding their gains.


There are many exchanges all over the world, all with their pros and cons. The issue with many Canadian exchanges is the limit of what kind of coins you can trade within the exchange itself. Suppose an investor wants to trade among all the altcoins available. In that case, they will need to transfer their coins to a different exchange that allows for a different selection of altcoins available for trading. The issues here are the exchange fees and lack of security, therefore depending on where you are transferring your coins to,  it is essential to know which exchange is best for you and your investment needs.


Not all exchanges offer numerous options for stable coins, only a few exchanges within Canada provide top of the line security, customer support, and a wide variety of coins. CoinSmart delivers the perfect combination of coins, all within the same exchange. They offer coins with the possibility of large gains and losses to one of the most valued stable coins, Tether. With these combinations available all within one exchange, an investor can trade directly from, for example,  Litecoin to Tether with only one round of trading fees to move your investment from a volatile coin to a relatively stable one. Doing so avoids the fees of pulling your investment from the market, allowing you to get the most worth from every trade and investment.

So take a hold of your investment today and start trading with CoinSmart.


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