Cryptocurrency has been around for a while now and there are multiple papers and articles on the basics of cryptography. Not only has cryptocurrency flourished, but it has opened up as a new and trusted opportunity for investors. The crypto market is still young but mature enough to pour in an adequate amount of data for analysis and predict the trends. Though it is considered the most volatile market and a huge gamble as an investment, it has now become predictable to a certain point, and the Bitcoin futures are proof of this. Many concepts from the stock market have now been applied to the crypto market with some tweaks and changes. This gives us another proof that many people are adopting the cryptocurrency market every day, and currently more than 500 million investors are present in it. Though the total market cap of the crypto market is $286.14 billion, which is roughly 1/65th of the stock market at the time of writing, the market potential is very high considering the success despite its age and the presence of already established financial markets. The reason behind this is nothing else but the fact that people have started believing in the technology and the products backing crypto. This also means that the crypto technology has proven itself so much that the companies have agreed to put their assets in the form of crypto coins or tokens. The concept of cryptocurrency became successful with the success of Bitcoin. Bitcoin, which once used to be the only cryptocurrency, now contributes only 37.6% of the total cryptocurrency market. The reason for this is the emergence of new cryptocurrencies and the success of the projects that support them .This does not indicate that Bitcoin failed; in fact, the market capitalization of Bitcoin has increased. What this indicates is that the crypto market has expanded as a whole.

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These facts are enough to prove the success of cryptocurrencies and their market. And in reality, investment in the crypto market is considered safe now, to the extent that some invest for their retirement plan. Therefore, what we need next are the tools for analysis of the crypto market. There are many such tools that enable you to analyze this market in a manner similar to the stock market, providing similar metrics. Coin market cap, coin stalker, cryptoz, and investing are a few examples. Even though these metrics are simple, they do provide crucial information about the crypto under consideration. For example, a high market cap indicates a strong project, a high 24 hour volume indicates high demand, and circulating supply indicates the total number of coins of that crypto in circulation. Another important metric is the volatility of a crypto. Volatility is how much the price of a crypto fluctuates. The crypto market is considered highly volatile, so cashing out at the moment might bring in a lot of profit or make you pull your hair. Thus, what we look for is a crypto that is stable enough to give us time to make a calculated decision. Currencies such as Bitcoin, Ethereum, and Ethereum Classic (not specifically) are considered stable. Along with being stable, they need to be strong enough so that they do not become invalid or simply stop existing in the market. These features make a crypto reliable, and the most reliable crypto currencies are used as a form of liquidity.

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As far as the crypto market is concerned, volatility comes hand in hand, but so does its most important property, i.e., decentralization. Because the crypto market is decentralized, a drop in the price of one cryptocurrency does not always imply a drop in the price of another. giving us an opportunity in the form of what are called mutual funds. It's the concept of managing a portfolio of the crypto currencies that you invest in. The idea is to spread your investments across multiple cryptocurrencies so as to reduce the risk involved if any crypto starts on a bear run.

Similar to this concept is the concept of "indices" in the crypto market. Indices provide a standard point of reference for the market as a whole. The idea is to choose the top currencies in the market and distribute the investment among them. These chosen crypto currencies change if the index is dynamic in nature and only considers the top currencies. For example, if a currency "X" falls to the 11th position in the crypto market, the index that considers the top 10 currencies will no longer consider currency "X" and will instead consider currency "Y," which has taken its place. Some providers, such as cci30 and crypto20, have tokenized these crypto indices. While this might look like a good idea to some, others oppose it due to the fact that there are some pre-requisites to investing in these tokens, such as a minimum amount of investment needed. While others, such as cryptoz, provide the methodology and the index value, along with the currency constituents, so that an investor is free to invest the amount he/she wants to and choose not to invest in a crypto otherwise included in the index. Thus, indices give you a choice to further smooth out the volatility and reduce the risk involved.

Conclusion

The crypto market might look risky at first glance and many might still be skeptical about its authenticity, but the maturity that this market has attained within the short period of its existence is amazing and proof enough of its authenticity. The biggest concern that investors have is volatility, for which there has been a solution in the form of indices.

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