Cryptocurrency: Is It a Good Investment?
Whether you like it or not, cryptocurrency is almost everywhere these days. In reality, a growing number of established firms are incorporating cryptocurrency into their platforms or leveraging it to launch new products.
Regardless of the risks, cryptocurrencies and the blockchain business continue to develop. Much-needed financial infrastructure is being created, and institutional-grade custodial services are becoming more accessible to investors. Professional and individual investors are increasingly gaining access to the tools they need to manage and protect their crypto investments.
So, what does it all mean? As more organizations and platforms discover ways to use cryptocurrency or allow their consumers to do so, it will become much more widespread than it is now. Nevertheless, is cryptocurrency a good investment?
Claire Lovell, Associate Director of Product Management at Gemini, a cryptocurrency investing platform, says that cryptocurrency provides people with more financial choice, independence, and opportunity. Furthermore, the decentralized, open-source structure of bitcoin aids in “eliminating the weak points of the modern banking system by bringing access directly to consumers,” she claims.
Attorney Len Garza, Esquire of Garza Business and Estate Law, agrees that investing in a new investment instrument such as Bitcoin has the potential to result in huge returns, as well as massive losses.
According to Garza, the extreme volatility we’ve witnessed so far is the opposite of cryptocurrency’s “newness.” Simply said, cryptocurrency investment is not for the faint of heart.
Aside from the volatility, Garza believes cryptocurrency is ideal for scammers since the different marketplaces are unregulated. “Buyer beware,” he advises.
Cryptocurrencies may grow in value, but many investors consider them as speculative investments rather than genuine investments. What’s the reason? Cryptocurrencies, like traditional currencies, have no cash flow, therefore in order for you to benefit, someone else must pay more for the currency than you did.
To sum up, there are a few things you need to know before you invest in cryptocurrency, i.e. (1) Cryptocurrency is volatile; (2) Cryptocurrency has many unknowns; (3) Cryptocurrency makes scam easier; and (4) Cryptocurrencies have an uncertain rate of return.
Investments are always risky, but according to Consumer Reports, some experts believe cryptocurrency is one of the riskier investment options available. However, digital currencies are among the most popular commodities.
If you decided to invest in cryptocurrency, here are four tips you need to know, i.e. (1) Research exchanges; (2) Know how to store your digital currency; (3) Diversify your investments; and (4) Prepare for volatility,
So, back to the question at hand, do you think cryptocurrency is a good investment?
References:
Crypto is Everywhere, But Should You Invest? Forbes. (2021). https://www.forbes.com/sites/robertfarrington/2021/01/18/crypto-is-everywhere-but-should-you-invest/?sh=623eb09c7e73
What is Cryptocurrency? Here’s What You Should Know. nerdwallet. (2021). https://www.nerdwallet.com/article/investing/cryptocurrency-7-things-to-know#:~:text=To%20buy%20cryptocurrencies%2C%20you'll,such%20as%20Bitcoin%20or%20Ethereum.
What is Cryptocurrency? Cryptocurrency Security: 4 Tips to Safely Invest in Cryptocurrency. kaspersky. (n.d.). https://www.kaspersky.com/resource-center/definitions/what-is-cryptocurrency
Is Cryptocurrency a Good Investment? The Motley Fool. (2021). https://www.fool.com/investing/stock-market/market-sectors/financials/blockchain-stocks/is-cryptocurrency-good-investment/#:~:text=Investing%20in%20crypto%20assets%20is,companies%20with%20exposure%20to%20cryptocurrency.
