Are you thinking about investing in cryptocurrency but aren’t sure if it’s worth it?
According to a recent CNBC survey, 1 in 10 people invest in cryptocurrency, and those numbers continue to grow. While people have made millions of dollars off of cryptocurrency investments, there are far more people who have lost money.
Therefore, before you get started, you need to decide if investing in cryptocurrency is worth it. Read on to learn about the pros and cons of investing in cryptocurrency.
Risks of Investing in Cryptocurrency
Here are a few critical risks to keep in mind when it comes to investing in cryptocurrency:
Bitcoin and other cryptocurrencies are extremely volatile. They’ve seen huge price swings at the drop of a Tweet, as evidenced by Elon Musk’s Tweets regarding Dogecoin.
Cryptocurrency price volatility generally stems from three sources: speculation, sentiment, and market manipulation. Due to the unregulated and anonymous nature of cryptocurrency, the price can fluctuate at any moment, costing investors thousands if not millions of dollars. This is why it’s a good idea to diversify your investment kit.
While more and more businesses around the world have started to accept payments in the form of cryptocurrency, we don’t know if crypto will ever permanently adapt to the market.
This is primarily due to regulatory concerns, public misunderstandings around security, and technology shortfalls. If more people around the world don’t adapt to using cryptocurrency, the digital asset may not see much of a future.
Lack of Regulations
Because cryptocurrency is decentralized, there are essentially no regulations around it. This can lead to a high degree of uncertainty and volatility in the market.
Lastly, storing cryptocurrency safely is a major concern. There have been major incidents of theft not only on crypto wallets but also on exchanges.
Rebates for lost investments will depend on the policies of the exchange or wallet you’re working with.
Benefits of Investing in Cryptocurrency
Of course, there’s a reason why millions of people across the globe are investing in cryptocurrency. Here are some of the benefits:
When you invest in Bitcoin and other cryptocurrencies, you have complete control over your funds and transactions. Every transaction is anonymous, and private information is ever made public.
Also, you don’t need to deal with a centralized institution such as a bank to complete a transaction.
Good Potential for Appreciation
Perhaps the biggest benefit of investing in cryptocurrency is its potential for appreciation. Many market analysts believe that Bitcoin and other cryptocurrencies have a long way to go, giving investors the potential to make thousands and thousands of dollars.
You can complete a cryptocurrency transaction whenever you want, wherever you want. All you need is an internet connection, and if you want, you can even buy and sell crypto on your mobile phone.
Investing in Cryptocurrency: Are You Ready?
While there are drawbacks to investing in cryptocurrency, this is also the case with every other investment on the planet. If you decide that investing in crypto is right for you, make sure you do your research on the different exchanges, coins, and wallets.
And, check back in with our blog for more crypto news.