Considering historical risks in investment in Crypto, this is an obvious question to come in investor’s mind – ‘Is Crypto a better investment?‘. These are very high growth (at same time high risk) investments. In last couple of years crypto markets have grown number of times.
In this blog, we will discuss different aspects of cryptos and come to some general conclusion regarding investing in cryptos?
What is Crypto?
Cryptocurrencies are digital or virtual currencies that use encryption techniques to regulate the generation of units of currency and verify the transfer of funds.
Cryptocurrencies are a type of digital currency, which uses encryption techniques to regulate the generation of units of currency and verify the transfer of funds. They use cryptography in order to generate new units, keep track of transactions, and prevent double-spending.
The first cryptocurrency was Bitcoin, which was created in 2009 by an individual or group under the pseudonym Satoshi Nakamoto. The inventor remains a mystery, but many believe it is either a person or group who goes by Satoshi Nakamoto.
What is history of Cryptocurrency?
Bitcoin was first stable virtual currency. Bitcoin (a peer-to-peer electric cash system) was registered as
cryptography in year 2008. Later, in 2009 it became available for public. Initially bitcoin was not traded, rather bitcoin mining was there.
As soon as people liked decentralization and encrypted currencies ideas, later alternate currency of Bitcoin was invented i.e., known as ALTCOIN.
In 2010, 1 Bitcoin has value of $0.08, while in Oct 2021 value reached to $61000.
Which are Popular Cryptocurrencies?
| Popular Cryptocurrency |
| Bitcoin (BTC) |
| Ethereum (ETH) |
| Tether (USDT) |
| USD Coin (USDC) |
| Binance Coin (BNB) |
| Ripple (XRP) |
| Cardano (ADA) |
How to invest in Cryptocurrency?
Anyone, who wants to invest in cryptocurrency has to follow general steps:
- Step 1: Choose cryptocurrency exchange.
- Step 2: Consider storage and digital wallet option
- Step 3: Choose what cryptocurrency to invest in
- Step 4: Decide how much to invest in
- Step 5: Manage your investments
What is Future of Cryptocurrency?
Some economic specialists predict a big change in crypto is forthcoming as institutional money enters the market. There is the possibility that crypto will be floated on the Nasdaq, which would further add credibility to blockchain and its uses as an alternative to conventional currencies. Some predict that all those crypto needs are a verified exchange traded fund (ETF). An ETF would definitely make it easier for people to invest in Bitcoin. However, this is still prediction. Until there is institutional money invested in cryptos, there will always be great risk and volatility.
Who should invest?
Cryptocurrencies are speculative investments, in our view. We don’t believe that Bitcoin fits within traditional asset allocation models at this time, as it is neither a traditional commodity, such as gold, nor a traditional currency. Bitcoin’s dramatic volatility is driven primarily by supply and demand, not inherent value. Bitcoin doesn’t have earnings or revenues. It doesn’t have a price-to-earnings ratio, price-to-sales ratio, or book value. Traditional value metrics don’t apply, so there are no methods for assessing its value that we endorse or find persuasive.
This all depends upon goals and preferences as an investor, as it does with any asset or security. We suggest that clients approach it as a speculative investment and consider the high volatility and risks involved. For those who already have a diversified portfolio and a long-term investment plan, we see ownership of cryptocurrencies as outside the traditional portfolio.
What you need to know before you invest in Crypto
Crypto is a new, emerging market. It is important to be informed before investing in it. There are many things to consider before investing in crypto.
The first thing to consider is the regulatory environment of the country you live in. You need to make sure that your country has not banned cryptocurrency trading and that there are no restrictions on withdrawing money from crypto exchanges.
The second thing to consider is the volatility of cryptocurrencies. The prices of cryptocurrencies can fluctuate wildly and it can be difficult to predict which way they will go next.
The third thing to consider is the security risks associated with cryptocurrency exchanges and wallets, which can be hacked or lose data due to hardware failure or human error, especially if you do not have a good backup strategy for your data. It’s also important that you keep your passwords safe and don’t share them with anyone else or write them down where someone else might find them, as this will make it easier
Conclusion – is crypto a better investment?
Investing in cryptocurrency is a risky decision and should not be taken lightly. It is important to understand the pros and cons of investing in cryptocurrency before making a decision.
Pros:
– Cryptocurrencies are all over the news, which means there is a lot of hype surrounding them.
– They are easy to buy, store, and sell.
– There are many different types of cryptocurrencies to choose from (Bitcoin, Ethereum, Litecoin).
– You can invest as much or as little as you want (in some cases).
Cons:
– Cryptocurrency markets are volatile and unpredictable. This means that your investment could go up or down at any time without warning.
– Since they are unregulated by governments, there isn’t much protection for investors if something goes wrong with the company they invested in or the currency itself.
In summary, we can say that it can be one of best long term investment asset and at same time it can be high rewarding.
Video Credit: Big Think YouTube Channel