Can Predictive Analytics Identify Future Crypto Profitability?

Predictive analytics technology can be particularly useful for investors that want to gauge the long-term profitability of cryptocurrency.
predictive analytics and cryptocurrency trading
Shutterstock Photo License - By Travis Wolfe

Cryptocurrencies are undoubtedly the rave of the moment. There are stories all over the internet about how crypto made someone a millionaire overnight. However, the crypto market experienced a significant downtrend recently with prices plummeting as low as 30% from peak prices in a matter of days. This has raised questions about the future of cryptocurrency investments. Should you invest in them? Amid the recent volatility, this article focuses on whether crypto-assets can be profitable in the coming years.

Predictive analytics technology is very useful in the context of investing and other financial management practices. One potential benefit of predictive analytics that often gets ignored is the opportunity to make more profitable investments in cryptocurrencies.

Nations around the world are embracing cryptocurrencies and India is not an exception. Indians are becoming more interested in cryptocurrencies and many people are searching for how to buy cryptocurrency in India.

One of the major reasons people invest is to build their wealth. Whether you invest in stocks, bonds, mutual funds, or a combination of the listed, the main objective is to grow your fortune. It is not surprising that most people will always look out for the next big investment opportunity that will deliver high returns whenever they want to invest.

This is one of the reasons that predictive analytics has become so popular in investing in inefficient markets like penny stocks and cryptocurrencies. The price movements of assets such as stocks and bonds are very difficult to exploit, since the markets are so efficient. However, far fewer people are investing in cryptocurrencies and other small markets, which means that it is impossible to anticipate future prices with predictive analytics tools.

Predictive Analytics is Key to Successful Cryptocurrency Investing

This is something that data-savvy investors should consider carefully. Most time when people decide to invest, thoughts are first drawn toward options such as stocks, bonds, venture capitals, real estates, private equity shares, and many more. However, other alternative investment opportunities that promise much higher returns than traditional investments are emerging. Chief among these alternative investment options is Cryptocurrency.

Understanding Cryptocurrency

At its core, a cryptocurrency is a form of digital money designed to be used over the internet. They operate on a decentralized network called blockchain technology — the revolutionary technology powering the crypto network. Crypto makes it possible to facilitate fast P2P transactions without the need for third-party or intermediaries. The blockchain network ensures transactions are secure, impossible to counterfeit or double-spend, and improves the productivity of the crypto network.

The first blockchain-based cryptocurrency, Bitcoin, was launched in 2009. The success of Bitcoin gave rise to the creation of several other cryptocurrencies, collectively known as “Altcoins” — which includes Litecoin, Ethereum, Cardano, Ripple, and many more. Today, there are over 5000 cryptocurrencies making rounds in the market.

Over the past few years, cryptocurrencies have been receiving a great deal of attention and acceptance all over the world. Much of the increased popularity can be attributed to the improved accessibility, the numerous benefit they provide, and their potentials to improve the traditional financial system. Some of these benefits include greater security, instant transactions, low transaction fee, and elimination of intermediaries.

While accessibility is an enabler of adoption, it is the growing recognition of crypto’s potential to allow people to participate in a fully transparent and permission-less financial system without middlemen that are driving demand. In fact, they have managed to completely revolutionize the way we look at the global financial landscape. Aside from being used as a medium of exchange, cryptos are also been used as a store of value and a hedge against inflation. They have also shown they can appreciate in value, making them an option as an alternative investment asset.

In the last six months, the cryptocurrency space experienced significant milestones fueling the record surge of all crypto assets. Prices of many cryptocurrencies rose rapidly hitting a record high over the period, yielding remarkable returns for holders and investors. Following the explosive rise of the price and popularity of cryptocurrencies, you may wonder if cryptocurrency investment is sustainable? And should you add them to your portfolio?

Understanding Cryptocurrency Investment

Cryptocurrencies have turned out to be the most valuable investment vehicle of the last decade. In just over a decade of existence, Bitcoin, the world’s first cryptocurrency went from trading from a low of few cents to hitting a peak of $63,000 in June 2021. This price movement invited a lot of people into cryptocurrency investment. 

At the time of writing, Bitcoin is currently trading a little above $43,000 per coin — representing a remarkable ROI of over 300,000% over 10 years. Out-performing all of the stock market offering and gold by a wide margin. To further simplify it, Bitcoin has outperformed global stock market indexes, generating a 132% return YTD. Now is the best time to learn how to buy bitcoin in India so you can take advantage of the dip.

However, there have been numerous significant market downtrends recorded throughout this period. In fact, cryptocurrencies are extremely volatile and it is not uncommon to see wild price swings with their value quickly change by thousands of dollars in a short period. We cannot ignore the risk and speculative nature associated with crypto assets.

Is Investment in Crypto Sustainable?

Ever since they went mainstream, cryptocurrencies have come under increased scrutiny from governments, regulatory bodies, and critics. With concerns over its extreme volatility, environmental impacts, the potential for evading taxes, and use for illegitimate operations.

Governing bodies and regulatory agencies around the world have taken quite drastic and differing approaches to cryptocurrencies. Many are cracking down on cryptocurrencies and some crypto exchanges while some are proposing regulations to bring the sector under their control.

Despite this, cryptocurrency continues to grow stronger and interest in crypto asset from institutional investors and organizations keep increasing. Big organizations such as Square, Tesla, MicroStrategy have made significant investments in cryptocurrency and many more are set to follow.

Can predictive analytics determine if crypto investment turn profitable in the coming years?

Considering the incredible ROI that major crypto assets like bitcoin and ethereum have generated in the last 12 months, the future of crypto investment is bright. Investment and crypto analysts believe that the price of BTC is nowhere near its true value and will continue to grow in the future. The question is how long the profit opportunities will last and whether predictive analytics technology can help forecast them properly.

Long-term investments in low-capped crypto assets are great avenues to make money in the crypto market. Another way is to invest in new projects via ICO –  Initial Coin Offering. Crypto projects allow early investors to buy coins at cheap prices through the ICO with the hopes that the prices of the coin will rise when the project launches. Those that are knowledgeable about predictive analytics can apply these strategies more effectively.

Other projects allow people to mine their coins for free before they launch the coin. One of such cryptocurrencies that allow people to invest for free is RENEC. Predictive analytics might not be as important with mining, because investors don’t have to risk their initial investment. However, it can still be valuable for those that want to make sure their energy expenditures are used properly.

However, due to the volatile and speculative nature of crypto assets, it is important to understand cryptocurrency investment to avoid losing your investment. The rule of thumb for cryptocurrency investment is to never invest what you cannot afford to lose. 

Introducing RENEC – Remitano exchange native token

Leading peer-to-peer crypto exchange Remitano has launched its native token – RENEC, to improve the quality of services delivered to customers, reduce transaction fees and ensure secure and swift transactions.

Predictive Analytics Can Be Invaluable for Crypto Investors

Cryptocurrency investors can use predictive analytics technology to improve their odds of success. Predictive analytics can be particularly useful when it comes to identifying the long-term potential of investing in various cryptocurrencies.

Lilach Bullock
Highly regarded on the world speaker circuit, Lilach has graced Forbes and Number 10 Downing Street. She’s a hugely connected and highly influential entrepreneur. She is listed in Forbes as one of the top 20 women social media power influencers, named one of 10 top digital marketers by Brand24 and was crowned the Social Influencer of Europe by Oracle. She is listed as the number one Influencer in the UK by Career Experts and is a recipient for a Global Women Champions Award for her outstanding contribution and leadership in business.