If you’ve got some money set aside and want to invest in cryptocurrency, you’ve come to the right place. There are some fantastic opportunities out there, but it always pays to do some research before jumping into the deep end!
The potential profits are astonishing and crypto is one of the best options available to prospective investors today. Returns on investment capitalize on the chaotic nature of the economy and the uncertain future. There’s a lot of money to make, but it’s just as easy to lose it all.
Is cryptocurrency a good investment? Well, that’s a good question and one that isn’t so easy to answer. We’ve got you covered though, read on to find out more!
Cryptocurrency and Inflation
As things stand there’s a lot of speculation surrounding cryptocurrency as a potential solution for a lot of problems. Currently, the world is experiencing the beginning of a serious economic downturn. This is due to the inflation occurring worldwide to shore up the need for solvency as banks continue to lend more money than they have.
While this is a necessary tactic to keep the economy growing, some analysts believe that it’s only a matter of time before things come crashing down. You’ll likely remember the housing collapse of 2008 which led to The Great Recession. Many people lost their savings, their jobs, and even their homes to the common practice of lending money that never existed.
Cryptocurrencies are an interesting investment because they’re designed to have a fixed number of coins that will never increase or to have a set amount of inflation per year to ensure supply. This is by design and eliminates a lot of the glaring problems of legacy currencies and their tendency to be manipulated. Investment based upon the future popularity of a decentralized answer to these problems is enough to get people interested alone.
Is Cryptocurrency a Good Investment?
Speculation on the future of our economic growth and its evolution has placed the world of cryptocurrency in the limelight for a while now. Cryptocurrencies are immune to government manipulation due to their decentralized nature. This means there’s nobody dictating price or availability, creating a free and open market.
There are a great many different coins available to choose from if you want to invest, and they all work differently for the most part. Despite the range of philosophies behind them, there’s an underlying truth that many have decided to bet on as a foundation for a good investment. They believe that crypto is the future of currency and that it’s only a matter of time before being adopted.
In terms of popularity and adoption, as of the time of writing only 4.2% of all people own any form of cryptocurrency. As this number steadily increases so will the price and global interest in all crypto. If you’re wondering if crypto is still worth investing in, these numbers ought to speak for themselves.
Crypto Use Cases
Part of the reason that crypto has yet to become widespread is because of the small number of available use cases. As things stand at the moment, it’s not yet common practice to pay for your groceries with crypto. While some early adopters are accepting their chosen crypto as payment, it’s not possible to avoid using FIAT currency altogether.
Adoption is increasing steadily though, and it’s not hard to imagine a world where that could be the case. Cryptocurrency ATMs are popping up everywhere, which seems to point toward a world where mass adoption is inevitable. You may have seen them already, but if not there are websites available to help you find the closest one if you’d like to discover more.
Billionaires Mark Cuban and Elon Musk are both vocal supporters of crypto, stating it’s only a matter of time before their use becomes widespread. They’ve taken the gamble of being amongst the first to accept Dogecoin for Dallas Mavericks and Tesla merchandise. With these corporate giants speaking out about the future of crypto, savvy investors are taking note.
The Reality of Investing in Cryptocurrency
It’s important to stay grounded during your research. While you look into past returns and the profits some people have made from cryptocurrency investments, you might be tempted to go all in. While there’s always a chance you could make a substantial amount of money, it’s possible you could lose it all if you invest it in cryptocurrency.
Without some in-depth research into past market trends and potential future catalysts, you may as well gamble your money away at a casino. Knowledge and strategy are what separate good investing results from simple sheer luck. Multiplicative returns are possible, but that’s due to the chaotic nature of the economy as a whole and an opaque view of the future.
If you plan to invest your hard-earned cash into crypto, you must first be aware that you could lose it all at a moment’s notice. Some catalysts are impossible to predict, even after hours of work researching possibilities. Sometimes all it takes is a rogue tweet from someone influential to make the price of your investment go through the floor.
The Allure of Volatility
Part of the allure of crypto is the chance that your investment might net you returns beyond your wildest dreams. It’s easy to look back and wish you’d known to put fifty dollars into Bitcoin five years ago. Investing in crypto has ensured a life of luxury for many who held onto their investments to sell at the appropriate moment. The best cryptocurrency investment is the one that doesn’t lose you all your money, while still having the potential to “go to the moon” with returns.
Unfortunately, volatility goes both ways. Just last year people were buying into Bitcoin at over $60,000 each, feeling confident that the price would continue to rise even higher. Instead, the price plummeted, losing many investors hundreds of thousands of dollars in a single fell swoop.
A quick google search will confirm just how easy it is to lose it all. There are horror stories everywhere! Reading a few cautionary tales will stand you in good stead going forward.
If there was a foolproof way to predict the direction the market would take, everyone would be a millionaire. The nature of the beast is one of second-guessing and uncertainty. This doesn’t stop a lot of people from pretending to understand where the market is going to go, so always take crypto advice with a grain of salt.
A Fear of Missing Out
Popular cryptocurrency investments are often bolstered by people not wanting to miss out on the next moonshot. Fear is a powerful force when the worry that you’re about to miss out on the ground floor of a life-changing opportunity begins to settle in. This is well-known leverage to trick newcomers into investing in crypto that isn’t going anywhere.
Fear of missing out also comes into play while investing in one of the more well-established coins. Even if you’ve done well, doubling or tripling your initial investment, it’s hard to know when to cash out. Nobody wants to take their profits before they’ve reached their peak, but it’s impossible to know where that peak might be.
Crypto often lulls the investor into a place where they’re unlikely to sell for anything less than a life-changing high. While looking at fluctuating numbers and candles on-screen, it’s easy to forget how they translate into the real world. Remember that the next downward trend could be just around the corner, and how much better off you’d be if you took your profits as they are.
Risk and Potential Return
Risk is not synonymous with the potential return. While every investment has its risks, that doesn’t mean that the riskier the investment is, the more the potential return will be. Is cryptocurrency a good investment? It depends on the investor, but there’s undeniably a lot of money to be made in crypto if you’ve got the know-how or luck to pull it off.
If you plan to navigate the hazards of crypto investment, remember to exercise caution every step of the way. There are a lot of people out there with the sole intent of parting you from your money. Remember, if an opportunity seems too good to be true, it probably is.
If this article has helped you to get a better understanding of cryptocurrency and its potential, check out the rest of the site!
