Cryptocurrency has been getting a lot of attention lately. It’s easy to see why: there’s the potential to make vast amounts of money with little upfront investment.
The anonymity of cryptocurrencies means they can be used in ways that cash can’t. But as with any investment opportunity, there are risks involved as well
Here are some things you should know before you buy cryptocurrency in order to protect yourself from scams and get the most out of your investment.
Why should you invest?
There are three main causes why you should invest in cryptocurrency.
- First, it’s a new asset class that is set to skyrocket during 2022.
- Second, Cryptocurrencies have now reached mainstream consciousness and will continue to capture headlines all year long (at least).
- Third, even if you don’t think cryptocurrencies are here to stay, they are an exciting technology and industry worth watching.
If you want to keep tabs on their development, it could be worth investing just for curiosity’s sake. You might also consider holding-holding onto your investment rather than selling it off.
Some coins may not hold value over time, but others will gain value with time.
Stabila, IOTA, Cardano, Stellar Lumens, and Monero are some examples of coins that seem undervalued right now but could prove themselves to be high-value investments five years from now.
Whatever you do, know what you’re getting into before jumping into any coin or token; remember. There is no such thing as a safe investment when dealing with crypto!
What are the risks?
At its core, cryptocurrency is just digital money.
It allows transactions to be conducted across a peer-to-peer network of individual users who don’t need to trust one another or even a third party like a bank or payment processor.
For years, cryptocurrencies have been considered impractical and unreliable-and too volatile for many people’s tastes.
But if you are looking for an alternative way to conduct transactions online, you can’t ignore them anymore.
Indeed, research suggests there will soon be no more than hundreds of major cryptocurrencies by market cap.
So before investing any time or money in them, it’s essential to ask yourself: How can they go wrong?
Instability and Volatility:
These are risks inherent to investing that can, unfortunately, strike at any time.
If you’re wondering what happened to some of your favorite crypto assets today, look no further than below $200 billion of market cap gone in a blink of an eye-in just one week!
Lack of Diversification:
With only a few market-leading cryptos, there’s little value for diversification in your portfolio. Suppose you think that crypto assets might be worth something someday.
In that case, it makes sense to hedge your bets and spread them out between different blockchains and tokens like Zoom before making any investments whatsoever.
Otherwise, you could end up holding just one cryptocurrency worth $1 trillion with nothing else to show for it, even if that turns out to be Bitcoin. (It won’t.)
The Risks of Maintaining Private Keys:
If you control your own keys, you have nothing to worry about by using popular mobile wallet apps like Bread Wallet or Blockchain Wallet.
But suppose you use an exchange to store your cryptocurrency.
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In that case, your funds could potentially be stolen or lost through a digital heist-like so many millions of dollars worth of Bitcoin already have.
That’s because third-party crypto exchanges are prime targets for cybercriminals.
When considering an investment, it’s essential to consider what could go right and what could go wrong.
If you’re thinking about investing in cryptocurrency, here are a few things to consider:
If you want to be part of a new industry on the cutting edge of finance, an investment could yield huge returns.
But remember: Not all cryptocurrencies will be winners.You can start your successful journey with Airdrop from Stabila Crypto.
Before you invest any money into cryptocurrency, make sure to educate yourself and understand how blockchain technology works.
And don’t invest more than you can afford to lose.