The crypto ecosystem boasts over 4.500 different cryptocurrencies, and choosing a few coins / tokens to trade or HODL (term coined for the occasion a few years ago meaning "hold"), might seem like a daunting task, especially at a time when the crypto market is in the process of correction. Each cryptocurrency operates in a different ecosystem and, at times, it becomes important to consider each of them as a separate asset.
What cryptocurrency experts think
Bitcoin, Ethereum, XRP, Cardano, just to name a few, have different underlying technologies and purposes. Commenting on how to choose the right asset, Brian Brooks, CEO of Binance US, said:
“It's really about what this network is going to do. If you believe the financial apps will go online, you will probably buy the ETH token because you think Ethereum will be the platform for those financial apps. If you think decentralized cloud storage is the future, you will probably buy Filecoin etc. etc."
“Fungible tangible Internet money” is the most common connotation associated with cryptocurrencies. But according to Brooks, people need to be educated beyond that, because of the "real value" these resources have. However, cryptocurrencies have been trading as a "high risk asset" in recent days. Evaluating the market situation, the executive said:
“In reality, most cryptocurrencies are not high-risk assets. Bitcoin is truly "a high risk asset" and has risen a lot in the last 12 months due to the inflationary issue.
Some coins could go up and then disappear
After the pandemic, the whole world, and the United States in particular, find themselves in a context of reducing macro-economic risk, thanks to inflation and international tensions. Uncertainty in the broader environment that underpins the crypto ecosystem has ultimately led to people losing their risk assets and has been a major reason for market volatility. Commenting, Brooks himself said: "The crypto sector will recover, but surely there will be some volatility to deal with along the way."
Brooks also pointed out that exchanges such as Binance intended to improve the ecosystem's long-term adoption rate. So he added:
“We are here to incubate the underlying technology of cryptography… The rate of cryptography adoption depends on how much trust people have in the networks that support the value of the tokens. This is what is to come next ”.
Currently, there are 1.647 cryptocurrencies that have already been forgotten in this world. Some tokens that are doing well today may cease to exist and become "dead coins" in the future. Investors should be warned, Brooks concluded:
“We have to accept and feel comfortable. The value of the token is based on your predictions of which will emerge as [long-term] winners. "
And what do you think of the statements by the CEO of Binance? Have you already found the token that's right for you? Let us know in the comments below.