Is it Safe to Invest in Crypto When Prices Hit All-Time Highs?

When it comes to investing, users always see a future with profits. Yet, some investors don’t understand which moments they can use to maximize profits. The cryptocurrency world carries many volatile assets.

Prices might remain uncertain for an extended period. An ATH occurs when the values of crypto assets record a higher price. In a price rally, the ATH values may exist for a short time before a replacement is done. Hence, there are safer instances where users can make investments during an ATH occasion.

Investing in an ATH Market

The choice of investing in digital assets brings good and bad experiences to users. To minimize the risk, users can invest in an ATH market during the following scenarios:

Platform News/Events

The headlines running in the market can serve as an investment opportunity for users. Digital assets announce various updates which usually intend to benefit users. Such news makes the value of virtual assets rise and reach an all-time high.

Users can invest if there are positive reports concerning the crypto assets. A digital asset like Solana has a bullish trend which made it reach an ATH of $146.47. The platform operates as a blockchain network hosting over 400 projects. One main reason that could be driving Solana’s growth is the launch of its hackathon.

The ignition event aims at giving developers the chance to build platforms on Solana. In return, the winning innovators receive prizes worth $5 million. Following the announcement, Solana’s price had an upward trend reaching highs of about $120. Hence, such news makes it possible to start crypto investments.

High Adoption Levels

Today, countries hold different opinions on digital currencies. Some regions view cryptocurrencies as risky assets, while others find them beneficial. According to a study, there is an increase of 880% in the global adoption levels.

Interestingly, upcoming economies like Vietnam have the highest adoption rates. A growing adoption can be a clear indicator for users to invest in virtual assets. It shows that investors have an interest in maximizing profits using digital currencies. When the interest grows, crypto assets also climb higher to achieve new prices.

An adoption case is seen in El Salvador after the country made Bitcoin a legal currency. The country plans on enforcing the Bitcoin law on September 7, 2021. El-Salvador set aside a $150 million fund to finance the adoption plan as part of the rollout. A crypto-friendly nation makes the values of digital assets move to the top.

The DeFi sector is another industry that may cause an increase in adoption. DeFi enables investors to access financial services without the help of central authorities. At the time of writing, the total value of locked assets stands at $99.16 billion. Thus, the new ATH in DeFi can be a green light to conduct investments.

System Upgrades

Crypto assets usually go through major changes over time. The modifications aim at improving the overall performance of digital coins. What’s more, users also get familiar with the platform’s emerging concept. By upgrading the system, digital coins can register new ATH prices and pave the way for investments.

The Alonzo hard fork on Cardano is one example of a system upgrade. Here, the Cardano network is planning to introduce smart contract features for users. The presence of smart contracts enables users to transact after fulfilling certain conditions. Hence, users can trade comfortably without any third-party involvement.

The upgrade will launch on September 12, 2021, with multiple community participants. Since the update announcement, Cardano’s ADA is among the digital coins registering ATH values. At press time, ADA has a price of $2.86. Investors can use these changes to generate more out of their holdings.

Lower Supply, Higher Demand

The laws of demand and supply are also applicable in the cryptocurrency world. Market demand and supply examine the number of people who want to buy or sell. Prices fall when the digital currency’s supply is high and the demand is low. Moreover, digital assets can hit an ATH if the demand is high and supply is low.

Some digital assets in the market have a known fixed supply. For example, Bitcoin has a maximum supply of 21 million coins. Thus, the value of the coin rises when it gets scarce in number. Users can make their move and invest when the asset’s value has a limited supply.

Final Thoughts

Monitoring the market activities is an integral part of an investor’s journey. Within a short time, the prices could change and either go up or down. Through market evaluation, users can determine which scenarios can affect the values of digital assets. Hence, certain factors make coins record ATH prices.

At the same time, several contributors can cause the prices to fall. An ATH price indicates that users can invest in the market. Remember, there is no guarantee of receiving profits even when prices hit an ATH. Thus, following some of the factors mentioned above can lower the risk of losing funds.