Of all the cryptocurrencies that saw massive success in 2021, Uniswap is possibly one that has gained the most traction. According to data on CoinMarketCap, Uniswap (UNI) started off with an exchange value of $5.17 at the beginning of 2021. By May it had already climbed up to a value of $44.97. Should you buy Uniswap?
Although the value of Uniswap has gone down by a bit since then, many traders and investors alike are scrambling to get their hands on UNI before it’s too late. Therefore, it is important for all enthusiasts to understand what Uniswap is and why it has become so popular in 2021. To know more about bitcoin trading you may visit BitIQ.
This article is a guide about Uniswap (UNI), outlining what Uniswap is, how it works, and lastly, whether or not you should buy it. By the end, you will have a much better understanding of whether you should buy Uniswap in 2021.
What is Uniswap?
Uniswap is a decentralized cryptocurrency exchange. Moreover, UNI is the native cryptocurrency of the Uniswap exchange. Decentralized crypto exchange gives users the ability to make trades and transactions without any third-party intermediaries regulating them.
Decentralized exchanges have the advantage of being entirely transparent and peer-to-peer, which means that the Uniswap exchange is completely collectively managed and community-run.
Moreover, like other decentralized exchanges, Uniswap is anonymous, which means that you don’t have to provide the site with any kind of personal data to be able to trade. All you have to do is connect your crypto wallet and you’re ready to go.
However, this has proven concerning for authorities, who claim that the unregulated nature of anonymous trading apps makes it possible for them to be used for finance terrorism or money laundering. For this very reason, most centralized exchanges require proof of the user’s identity before they can begin trading. Moreover, this is the reason why the E.U has recently proposed to ban all anonymous trading apps and services.
Having said all that, in the year 2021, Uniswap proved itself to be one of the few decentralized exchanges in the U.S that is trying its best to stay on regulators’ good side. As an example, in response to what it dubbed as the ‘evolving regulatory landscape’, Uniswap announced that it would discontinue the trading of certain tokens on the exchange.
Should You Buy Uniswap?
After seeing the massive hike in the exchange value of UNI within the first 5 months of 2021, many average internet users, crypto traders, and crypto investors/stakers alike are wondering whether or not they should buy UNI in 2021. Before you invest your hard-earned money into this seemingly promising cryptocurrency, however, consider the following points.
First of all, cryptocurrency values are very unpredictable and fluctuate all the time. Moreover, just because UNI saw a massive increase in value at the start of the year, does not mean that this trend will continue. As such, it probably isn’t the best idea to invest based on the hopes of another value jump before the end of the year.
Furthermore, it can prove more useful to invest in a cryptocurrency or crypto project that you think will perform well in the long term. Therefore, before investing in a cryptocurrency of your choice, make sure you do ample research. This includes reading reviews, studying the whitepaper, and researching about the company that developed it.
As cryptocurrency projects continue to expand in reach and capability, more people will inevitably flock to what they consider to be the next promising crypto investment out there. However, before investing in any cryptocurrency, including Uniswap, it is essential that you understand the risks involved and do your research to understand where the cryptocurrency stands and what its trends look like.