SHOULD YOU INVEST IN CRYPTO-CURRENCIES?

Crypto-currencies have been a hot topic for a while now and many people have come forward stating that they have made a fortune from these investments. At present, the major players in the industry are Bitcoin, Litecoin, and Ethereum. They all come with different features and advantages, and they thus attract different investors. The question remains though: should people invest in crypto-currencies?

The crypto-currency market is still young, and therefore, it is highly volatile. As such, there is no given answer as to whether you should dive in or not. You could end up making loads of money or could end up losing your earnings. This situation applies to most investments and as such, you should not stay away for fear of losing. The ideal way to go about it is to research the options available before going in. Here are some suggestions to aid you in making an informed decision on the same.

There are multiple ways in which you can invest in crypto-currencies. The most common method is by trading in crypto-currency. You could choose to go another route such as investing in a trust, IRA or an exchange-broker-wallet. It is important to note that there is no guarantee that you will recoup the money spent. As such, we advise that you start off small. Some investors start off with a small fraction of their investable funds such as 1-3%. In this way, you can get a feel of the market before getting into exchanges and mining. You could decide to go all in from the beginning, but given the state of the market, you could end up losing a lot.

A tip that can help you in this regard is that you should look into which players have dominated the market for a long time. Take an example of Bitcoin, Ethereum and Litecoin. These coins have been around longer than most options you will find on the market, and they thus have high market caps and volume. They are therefore less risky as compared to new entrants. There are many advantages and disadvantages as to investing in crypto-currencies.

Disadvantages

The crypto-currency market has been volatile from its beginning. Take an example of Bitcoin whose prices fluctuate at alarming rates. You could be having coins worth thousands of dollars, and by the end of the day, their value could have reduced or increased by a couple of hundred dollars. This uncertainty has discouraged many people from getting into the market. There is also the bubble burst that took place in 2013 which too scared off some investors. In 2017, investors saw the price of coins quadruple, and many people got into the market at that point. Though one could steer clear of these investments for fear of another bubble burst, there are some other determinants in play which ensure that the market does not crumble.

Another downside to crypto-currencies is that there are many entrants on the market. As such, though a given coin may be on the lead and you may see it as a long-term option, there is no guarantee that it will stick around. As such, it is always best to hold on to the popular coins as they are less likely to go down.

The bright side of things

This volatility serves as an incentive to invest in these crypto-currencies. True, the market may be facing many challenges at the moment, but projections show that the value of these coins will improve over time. As such, anyone getting into the market now will have a chance to watch the value increase, and you could later trade your coins for a handsome amount of money. That said, be sure to start off slow as you never know how things could turn out.

Crypto-currencies are on their way to being an accepted mode of exchange, and when the time comes, you will be one of the players with a say on the market. What’s more, they are the impressive development of the century, and you will get to have a place in history!

Though crypto-currencies are yet to exist in a stable market, they present an exciting form of investment and can lead to high returns in the future. Ensure that you conduct adequate research on available options. There may be many impediments in your way at the moment but remember; do not let the fear of striking out keep you from playing the game.

Want to learn more about investing in Cryptocurrency? Make sure to read this article