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What factors should be considered in cryptocurrency portfolio management?
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Investors should consider risk, time horizon, and asset classes, employing strategies like dollar-cost averaging to manage their portfolio effectively.
What are Initial Coin Offerings (ICOs) and their purpose?
ICOs are a way to raise funds for projects by creating and selling tokens, often offering equity-like investments.
Why is Bitcoin referred to as digital property and savings technology?
Bitcoin is viewed as digital property and savings technology due to its scarcity, decentralization, and potential to preserve value over time.
Define market capitalization in the context of cryptocurrencies.
Market capitalization refers to the total value of a cryptocurrency, calculated by multiplying the current price by its circulating supply.
What are the key characteristics of decentralized cryptocurrencies like Bitcoin?
Decentralized, non-government controlled, and have a fixed supply (e.g., Bitcoin's fixed supply of 21 million coins).
Explain the concept of 'on-chain analysis' in cryptocurrency.
On-chain analysis involves tracking and analyzing blockchain data to understand market dynamics and transaction flows.
How does the concept of fixed supply in Bitcoin impact its valuation?
The fixed supply of 21 million coins can make Bitcoin scarce and potentially increase its value as demand grows relative to its capped supply.
How does macroeconomic cycles influence cryptocurrency prices?
Cryptocurrency prices are influenced by cycles such as the business cycle, debt refinancing cycle, election cycle, and Bitcoin cycle.
Explain the significance of gas fees within blockchain networks.
Gas fees are payments made to blockchain participants to process and validate transactions, incentivizing network security and function.
Describe the role of decentralized finance (DeFi) in the crypto ecosystem.
DeFi provides financial services like lending and trading through blockchain technology without intermediaries, facilitating peer-to-peer transactions.
What differentiates coins from tokens in the cryptocurrency ecosystem?
Coins are layer one gas coins representing entire blockchain networks, while tokens are built on blockchains and can represent a wide range of assets (e.g., stablecoins, utility tokens).
How do smart contract chains relate to altcoins?
Smart contract chains are platforms like Ethereum that allow the creation of applications and tokens, which are often altcoins with unique functionalities.
What security advantages do self-custodial wallets offer?
Self-custodial wallets allow users to hold and manage their cryptocurrency assets directly, reducing dependency on third parties.
In cryptocurrency analysis, what is the significance of technical analysis?
Technical analysis uses historical price charts and indicators to predict future price movements, aiding traders in making informed decisions.
What is the difference between market orders and limit orders?
Market orders execute immediately at current prices, while limit orders set a specific price for buying or selling, ensuring trades only occur at those levels.
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