Cryptocurrency

The term cryptocurrency is quite broad, and there are several popular definitions of the word. In general, however, we can define cryptocurrencies as virtual or digital money that has a certain value that changes over time based on the current exchange rate. These cryptocurrencies operate on a decentralized technology called blockchain, which is not controlled or regulated by any governmental or private authority, such as governments, banks, or other institutions. Currently, cryptocurrencies are used for anonymous payments, international transfers, and serve as an alternative to traditional money. These cryptocurrencies have become increasingly attractive to investors in recent years, who try to grow their money by investing in cryptocurrencies based on exchange rate developments of specific coins. The most well-known cryptocurrencies include Bitcoin, Ethereum, and Cardano. If you want to learn more about cryptocurrencies, how they came to be, and where they are used, you can read our article – “What are cryptocurrencies and why were they created?”

According to Statista, there are over 20,000 cryptocurrencies, but many of them are either inactive or no longer exist. The number of crypto tokens exceeds 13 million, and new tokens are created every day. This means there are over 13 million potential investment opportunities where you can put your money and hope that the price and exchange rate of the cryptocurrency will increase.

However, be cautious of the many scam cryptocurrencies whose prices and exchange rates rise only briefly before dropping to a minimum over time. That’s why when investing in cryptocurrencies, it’s important to verify each project – whether it’s trustworthy, whether recognized authorities are behind it, and whether it has real-world use, so you don’t lose your money due to fraudulent behavior.

If you’re not well-versed and informed in the world of cryptocurrencies, your analyses and research may be inaccurate, and the cryptocurrencies you choose may not show an upward trend. However, you don’t need to be a cryptocurrency expert or monitor prices daily, because at Fumbi, we take care of everything for you.

In our offer, you will find more than 100 verified cryptocurrencies you can invest in. We use sophisticated algorithms that replicate the entire cryptocurrency market and combine the cryptocurrencies with the highest market capitalization for our customers. This means that with our Fumbi Index Portfolio, you don’t invest in just one cryptocurrency hoping its price will go up. You invest in more than 20 top verified cryptocurrencies, which means that the risk is diversified across multiple cryptocurrencies.

At Fumbi, we regularly audit and analyze individual cryptocurrencies to bring you only the best from the crypto market. Some of the most well-known cryptocurrencies in our portfolio include:

• Bitcoin
• Ethereum
• Cardano
• PolkaDot
• Chainlink
• Avalanche
• Litecoin

These are some of the largest and most popular cryptocurrencies you’ll find in our portfolio – and you can start investing from as little as €50.

If you want to invest in specific areas of the crypto world, our Advanced Portfolios product offers categories such as:

Above, we introduced just a few areas of cryptocurrencies you can invest in through Advanced Portfolios. If you’re looking for a more conservative way to invest in cryptocurrencies, we have a product that combines investing in Bitcoin and PAX Gold, which mirrors the price of gold. This way, you benefit from the potential of the rapidly growing crypto sector and the stability of conservative gold. Check out our Bitcoin and Gold product.

Many beginner investors and interested individuals wonder, how the price and exchange rate of cryptocurrencies are determined. The price and rate are shaped by the dynamic interaction of supply and demand in the free market. There is no central authority like a government, bank, or other institution that sets the price of a specific cryptocurrency. Instead, the price is shaped by traders, investors, and overall market conditions.

Simply put, the price reflects how many people are buying the cryptocurrency versus how many are selling it. If there are more buyers, the price goes up. If more investors are selling, the price drops. This is a natural market mechanism that operates across the entire crypto market. This means that the price of cryptocurrencies depends solely on the investors and how willing they are to allocate their funds into cryptocurrencies, such as Bitcoin or Ethereum.

From a historical perspective, cryptocurrencies are still “in their infancy” and are relatively new compared to other investment assets. Many individual and institutional investors have yet to start allocating money into cryptocurrencies.

For this reason, cryptocurrencies remain an attractive alternative to traditional forms of investing such as ETFs, real estate, commodities, or other asset classes.

In terms of performance, cryptocurrencies can be one of the best ways to grow the value of your wealth. Over the last 5 years, the crypto market has grown, and cryptocurrency prices and rates have increased year over year by dozens or even hundreds of percent. To give you an idea, here’s a price development overview of the largest cryptocurrency – Bitcoin:

• 2020 – 7 195 $ -> 28 923 $ (+300%)
• 2021 – 28 923 $ -> 46 216 $ (+60%)
• 2022 – 46 216 $ -> 16 542 $ (-64%)
• 2023 – 16 542 $ -> 42 283 $ (+155%)
• 2024 – 42 283 $ -> 96 310 $ (+130%)

Data on Bitcoin’s online rates and price trends show that this cryptocurrency has steadily grown over the past 5 years – with the exception of one particular year.

To better illustrate this, we’ll show you a real example with concrete prices and numbers:

On January 1, 2020, if you had invested €1,000 in Bitcoin at a rate of $7,195 per Bitcoin, and sold it on December 31, 2024, at a price of $96,310, you would have received €11,400. That’s a return of 1,140 %.

As mentioned earlier, cryptocurrencies are still in their early stages and their potential is far from exhausted. So, if you’re thinking about investing in cryptocurrencies, it’s still not too late.

If you want to learn more, check out our article:
How to start investing in cryptocurrencies.

If you’re not an expert in crypto but still want to make the most of its potential, you can invest in the Fumbi Index Portfolio. It’s an innovative way to invest in crypto, where our sophisticated algorithms select the best-performing cryptocurrencies with potential, allowing you to invest in the entire market, not just one cryptocurrency.

As we mentioned above, cryptocurrency prices and rates change dynamically based on supply and demand in the market. Whether the price goes up or down depends on how investors behave.

However, there are various factors that influence investor behavior – whether they choose to buy or sell – and this behavior is ultimately reflected in the cryptocurrency’s price. The most common factors include:

• Regulatory factors and news – Government announcements about cryptocurrency regulations, significant investments from institutional players, or important economic news can dramatically affect the price.
• Limited number of coins – Cryptocurrencies like Bitcoin, which have a limited number of coins, are more lucrative and rare in the long term, because the fewer coins are available, the higher their price will be. Cryptocurrencies with a limited supply tend to appreciate in value over time.
• Media, institutions, and authorities – Large media, companies, or well-known personalities can have a direct influence on shaping the price of a given cryptocurrency. If an authority speaks positively about a specific cryptocurrency, its price may rise in the short term (for example, when Tesla started supporting payments with Dogecoin). On the other hand, if a negative event occurs, investors start selling their cryptocurrencies and the price falls (for example, the collapse and bankruptcy of one of the major exchanges FTX. As a result of this event, the price of Bitcoin dropped from approximately $21,000 to $15,500).
• Macroeconomic factors – Inflation, interest rates, and global economic conditions can influence investments in cryptocurrencies. For example, high inflation may motivate people to buy Bitcoin as a store of value. Likewise, if the economy is doing well and people have money, they are more open to allocating these free funds into new investment opportunities.
• Market sentiment – Market sentiment reflects the mood in the market and whether investors are more inclined to buy selected cryptocurrencies or rather sell these assets. This behavior can be identified through the fear & greed index.
• Adoption and real-world use – If a cryptocurrency is used in the real world (e.g. for payments, decentralized finance, NFTs or smart contracts), its value increases. For example, Ethereum benefits from extensive use in the DeFi (decentralized finance) and NFT ecosystem.
• Ecosystem development and partnerships – If a blockchain project establishes important partnerships (e.g. Solana with companies in the gaming sector), this may increase demand for the cryptocurrency and its price. Expanding the ecosystem, for example with new decentralized applications (DApps), may attract more users and investors.

There are even more factors that influence cryptocurrency price development. It is completely natural that the growth of cryptocurrencies will not always follow an upward trend – the market will go through both bear and bull periods.

That’s why when investing in cryptocurrencies, it is recommended to make use of both market cycles and apply the DCA strategy.

Investing is a long-term process that requires a clearly defined strategy. Below are 5 tips you should follow if you want to invest in cryptocurrencies:

• 1. Only invest what you can afford to lose – The crypto market can be unpredictable. Prices can be volatile. Be prepared for such scenarios and invest only money you don’t need for your everyday expenses.
• 2. Avoid checking charts daily online – Emotions play a key role in investing. Green charts and rising prices evoke positive emotions, while red charts and falling prices bring negative ones. Constantly watching your portfolio in difficult times can have a negative impact and lead you to sell prematurely.
• 3. Use regular investing – Investing regularly using the DCA strategy is one of the most effective ways to build wealth over time. You should set an amount to invest each month. With Fumbi, you can start investing almost immediately, from as little as €50.
• 4. Find a trusted partner – The world of cryptocurrencies is a fast-paced and ever-changing environment. If you’re not a crypto enthusiast and don’t monitor prices and trends daily, it’s easy to get lost in the chaos. That’s why when investing in cryptocurrencies, you should choose a reliable partner to guide you. At Fumbi, we work every day to improve our products and bring our customers the best of the crypto world. If you’re curious about who’s behind the project, you can find out via this link.
• 5. Be patient – Rome wasn’t built in a day, and neither is wealth. Don’t expect to become a millionaire overnight. Stay patient when investing and don’t expect miracles instantly. Investing is a long-term process and should be treated as such – results won’t appear immediately.

Fumbi offers an innovative way to invest in portfolio products as well as individual cryptocurrencies. You no longer have to monitor charts, prices, and crypto news every day to find the perfect time and coin to invest in.

You can choose from several products that let you invest in a portfolio of cryptocurrencies – for example, through the Fumbi Index Portfolio, which gives you access to over 20 top verified cryptocurrencies.

No more sleepless nights watching online charts and trying to pick that one lucky coin. If you want to invest in a specific area of crypto, take a look at our Advanced Portfolios. And if you’re a more conservative investor, we also offer a product focused on Bitcoin and Gold.

If you’re interested in cryptocurrencies and would like to invest in them, Fumbi could be the right solution for you. Anyone can start investing from as little as €50 – with just a few clicks. It’s simple and fast!