The prospect of investing in the various different cryptocurrencies that are now available may seem attractive to some individuals out there given the many stories out there are people getting rich from them.
However, things are not as straightforward with them as things may first seem and there are a number of things that one should remember before putting any substantial amount of money into any one cryptocurrency.
These include:
An unproven return rate
Investing in any cryptocurrency, regardless of how big and established they are, is still very much a gamble. This is due to the fact that they are all exchanged via a peer to peer network that is not subject to any sort of regulatory standards, therefore, there are no patterns to the rise or fall of the cryptocurrency’s value. As a result, there is no way to calculate returns or predict changes, the same way that you can with mutual fund growth stocks. There is currently a real lack of data and credibility in cryptocurrencies in order to be able to establish a long term investment plan.
Plenty of unknowns
With cryptocurrencies still being relatively new, there are still a number of aspects around them that still need ironing out surrounding how they work exactly. After all, no one really knows who even founded the biggest cryptocurrency in the world, Bitcoin, and only a small handful of people actually know how it works and operates.
A high level of volatility
The price of many cryptocurrencies has a tendency to both rise and fall by extreme values. For example, the price of Bitcoin ranged between $20,000 at its highest and $900 at its lowest in 2017. However, it should also be remembered that any type of investing comes with a certain level of risk anyway.
Fraudulent use
Because of the anonymity that cryptocurrencies provide and the lack of regulation involved around them, they are prone to use on the black market for shady deals. Similarly, the process of money laundering is also an issue associated with cryptocurrencies.
After reading all of this, it will likely leave you posing the question of whether or not you should risk your hard-earned money investing in cryptocurrencies. The answer really comes down to the individual, what their personal financial situation is, and what they are looking to get out of investing their money.
For anyone that can afford it, is free from any debt, and already has some much more secure investments, in the form of growth stock mutual funds or something equally not as volatile, then investing in any type of cryptocurrency can be a quick and fun way to make some extra money.
If this sounds like you and you live down under, then you can buy crypto with low fees in Australia directly from Swyftx. You just need to remember that when doing so that there is also the chance that you may lose a lot, if not, all of your money if you don’t know what you are doing.
Read more at: https://southfloridareporter.com/what-you-should-know-before-investing-in-cryptocurrencies/
