Compared to other forms of investments, cryptocurrencies are the most highly volatile and hazardous investments. Suppose you have done your research on cryptocurrency’s history, especially Bitcoin. In that case, you will notice that there have been numerous occasions where Bitcoin’s market value would rise exponentially, but then it would come crashing down in an instant without any warning. With that in mind, that could mean that the investors would either have significant returns in their investment or they would have massive losses.
With knowledge and luck on your side, cryptocurrency can be highly profitable, whether you’re a new inverter or an experienced one. However, there are still things that you don’t know about cryptocurrencies in general, especially the things no one tells you about. For instance, when crypto was initially released to the public, it was the criminal’s primary choice of currency due to being harder to trace than regular online transactions. But there’s more, so here are a few things about cryptocurrency that one tells you about.
You can fall for a cryptocurrency scam
When investing in cryptocurrency, you can easily fall into the cryptocurrency scam from people who want to hide from the government and banks. Typical crypto scammers hide from banks and governments so that they can make suspicious transactions on the black market. So when the time comes when you’re going to buy, sell, or trade cryptocurrency, always be aware of the other party’s intentions.
There are no regulatory standards
Investing in cryptocurrency is a massive gamble as any form of government doesn’t set any regulatory standards. Cryptocurrency transactions commonly happen peer-to-peer without any middleman that links to any regulatory standards. Unlike stock investments, you cannot just calculate the returns if its market value falls or rises. Always keep this in mind whenever you plan to add cryptocurrencies to your investment portfolio for the long term.
Cryptocurrencies, in general, are unpredictable when it comes to their market value. Back in 2017, the market value of a single Bitcoin ranged from 900 dollars to 20,000 dollars. However, in early 2021, Bitcoin received its highest market price spike to around 63,000 dollars, and the latest price of the cryptocurrency is now approximately 56,000 dollars. The bottom line is that when you’re planning on investing, don’t be so hasty in making a decision. You must first observe crypto’s market values for a few weeks and do some research so that you’ll be able to invest in the right cryptocurrency.
Crypto’s instability will still continue
Cryptocurrencies, in general, are subject to quick changes in their market value, and you must know that Bitcoin is historically volatile. For instance, in early 2021, the price of crypto was sliced in half, and by November or at the end of the year, the cost of Bitcoin would only double. Unlike gold, the value of cryptocurrencies is highly speculative due to it having no intrinsic worth as it doesn’t serve any other purpose than to store value.
It can be very addictive
Being addicted to cryptocurrency might be one of the biggest secrets investors hold among those who like to support. Due to its volatility, it can be fascinating to see your investment making marginal returns, not to mention that fear of potentially losing it all in a day will get your blood pumping fast. In general, investing in cryptocurrency is exciting in more ways than other forms of investments are not.
The bottom line
At this point, if you are still new to the cryptocurrency game and were wondering whether to invest in it or not, here’s the catch. If you have a diverse portfolio for the stock market, don’t have any debt, and have enough funds to fall back on for at least six months, then you can start to think about risking your capital investing in cryptocurrency. However, it’s highly advised that you invest in crypto when you have researched enough on the subject to have a comprehensive analysis.