More and more people today are making an investment in cryptocurrencies. One of the most commonly asked questions are “Should I invest in crypto?”, “Is cryptocurrency safe”?, “What are the risks?”.
The truth is, there is no correct answer to any of these questions. Investing in crypto is a risky game that can make you filthy rich, but could also lose all your money.
Let’s have a closer look at the pros and cons of cryptocurrencies.
Is it safe?
Like we already mentioned, investing in cryptocurrency is not safe, at least for now. The value of cryptocurrencies goes up and down, and this is one of the reasons it is a risky investment. For example, in 2015, Bitcoin lost 84 % of its value.
Bitcoin and other cryptocurrencies run on a blockchain, and to hack that you will need to hack more than %50 of the miners on the network, so it’s almost impossible to break the security. Besides that, if you don’t keep your crypto in a wallet, you are not completely safe.
Is crypto insured?
There are some decentralized insurance options for crypto wallets and exchanges. With them, you are able to insure your cryptocurrency for theft or key loss.
Anyway, crypto insurance is going to be a thing in the future, as the crypto markets mature.
Short-term investment
Cryptocurrencies could be a short-term investment, for anyone who wants to gain profits fast. Of course, this doesn’t reduce the risk of the investment. Most traders, who want to make a short-term crypto investment, look mostly at the price history of the coin. If the price has a long history of instability, you could use that to make a quick profit.
Long-term investment
Investing in cryptocurrencies hides lots of risks, so you should be aware of what exactly you are investing in. Keep in mind that some cryptocurrencies have been created to easily raise money from beginners.
Anyway, if you believe in this technology, cryptocurrency can be a good long-term investment. Bitcoin, as the most valuable cryptocurrency, is said to be the future gold. Another large crypto is Ethereum. It keeps the second place on the market and also has a huge potential of growing.
Actually, Ethereum is building a global computing platform to support other cryptocurrencies, which creates an opportunity for Ethereum to benefit from the huge network. This makes it a good long-term investment.
How to invest
There are a lot of options for investment in crypto, and all of them are centralized cryptocurrency exchanges. So, before you invest your funds, you need to trust the chosen exchange. It must guarantee security and support to the cryptocurrency you invest in. This is part of the risks you have to consider.
When you choose the right exchange for you, you can deposit your funds through their website or mobile app, using a debit card, bank transfer or other crypto.
Should we invest in crypto?
You can’t gain profit, without the risk of losing it all. This is one of the biggest disadvantages of crypto investment. Some cryptocurrencies will fail, so before you make an investment, be sure that the coin has an accredited team and a solid foundation.
Also, before you make an investment in cryptocurrency, you need to do market and history research. This will surely help you make a better choice.
Why investing in cryptocurrencies holds a risk, it also has a huge potential. As we already mentioned, Bitcoin is expected to replace gold as a store of value. This means, it is going to reach over $300 000 for a coin, and some investors say that it will reach over $1 million.
So, if you are still considering investing in cryptocurrency, it may be a good idea to invest in these two.
And it doesn’t really matter if you are looking for a short or long-term investment, you should watch the markets often, as changes appear all the time.