The trend of investing in cryptocurrency is on the rise across the globe. With the cryptocurrency users crossing the 100 million mark, we can only assume the currency is gaining traction in an increasingly digitalized world. So, if you are one of those considering investing in any one of the cryptocurrencies, you should first consider all its pros and cons. Let’s take a look at what the financial experts have to say about it.
More and more traders now buy Bitcoins with eToro, Binance, Coinbase, and other exchanges and because these digital coins are becoming more mainstream, the market is expected to expand even further.
With the cryptocurrency users crossing the 100 million mark, we can only assume the currency is gaining traction in an increasingly digitalized world.
Profitable Returns, but no Regulations
“Investing in crypto can create life-changing wealth but the reality is most people lose money. Pro: Due to volatility in the markets, you can make a lot of money if you know what you are doing and buy/sell at the right time. Cryptocurrency trading enables people to take advantage of market fluctuations by buying low when prices are down, and selling high when prices are up. The professional traders can then automate these trades with robot trading software. Con: Cryptocurrency investing is still a young market and as such there isn’t much in the way of regulation for crypto exchanges yet. Cryptocurrency trading can be risky. If you don’t know what you’re doing, it’s easy to lose money on impulse trades or when the markets shift quickly against your position.”
Patrick Moore, Co-founder and Creator of CryptoWhat.com, which helps people understand cryptocurrency
“Cryptocurrency price volatility is a major problem. It may be that it’s still fresh, and people have a tendency to distrust intangible assets. Furthermore, even though it is not governed by a single country or body, news stories on major world events will influence the price of a cryptocurrency. If you want to trade with low risk and reap significant long-term rewards, volatility can be a drawback. However, you can see this as a benefit because it helps you to take advantage of periods when prices are very low to purchase a large number of properties, which you can then sell when the value rises after a short period of time.”
Adam Garcia, Founder of The Stock Dork
Cryptocurrency is Not Backed by Anyone
“The biggest drawback I see of investing in cryptocurrency is that It’s not backed by any government or company. Many people opposed to cryptocurrency investment would point this out as a source of concern. More people than you would think should be worried about this. There is some sort of guarantee like every other type of investment. Governments are the backers of fiat currency. Bonds are funded by governments and corporations. Companies are the backers of stocks. This does not seem to be a significant issue, but it is. This puts you at a higher risk of complete loss because if your account is compromised and your coins are stolen, you won’t know where to turn to get your money back. Because of the high risk involved, it’s better not to put any money into it that you can’t afford to lose.”
Benjamin Rose, Co-founder of Trainer Academy
Security is Really an Issue with Crypto
“Take a look at some of the stories that have dominated crypto news sites in the past, and you’ll find that there’s a major cybersecurity problem. Investing in cryptocurrencies is fraught with the risk of theft. Many cases have been recorded of hackers stealing Bitcoin accounts from people without being detected. Others have developed Bitcoin wallet scams that have caused people’s bank accounts to be ruined. For this reason, knowing how to spot a Bitcoin wallet scam is crucial, as is selecting one of the best Bitcoin wallets available.”
Jake Smith, Managing Director Absolute Reg
Easy Transactions, Yet no Authenticity
“The distinct advantage of cryptocurrency is the secure networking it offers while making transactions, which is an upgrade of doing deals with companies or business representatives as they require paperwork and commission which leaves little room for customer satisfaction. Crypto currency negates that trend and instead gives you complete control over your purchases with no need for a third party.” says Donna Tang, Budgeting Expert at CreditDonkey. Tang explains the main reason people are wary of cryptocurrency, “No regulation or authenticity. The only major reason why people avoid cryptocurrency is the vague authenticity of the whole setup. It is not accepted nor recognized by the government or the federals which makes it a dangerous investment, as you can be caught for fraud and spend considerable time behind bars due to making illegal money.”
While cryptocurrency brings in huge returns, it can also just as quickly and suddenly collapse or perhaps just get stolen. Despite its relative obscurity and flaws, cryptocurrency is gaining popularity as more and more people jump on the bandwagon. However, before hastily investing all our life savings into a cryptocurrency, we need to understand all the pros and cons and the workings of this relatively new and ambiguous currency. The key takeaway appears to be- don’t put into it what you can’t afford to lose.