Cryptocurrencies for some time now are seen by many as a shortcut to making some quick bucks. Although many positive things can be said about it, there are still risks involved that one must look out for.
Whiles that may be true, there are still heavy risks involved. Investing in cryptocurrency is gaining popularity and for obvious reasons, people are rushing into it without taking into consideration the many things that might go wrong. Seems the hunger for profits has overshadowed the fundamental technology of cryptocurrencies.
Many people have lost a lot of money from cryptocurrency investment. Logically and obviously, they sure didn’t enter the business to lose money, but hey this is the crypto world, where everything is possible.
The world where a coin can increase in thousands of dollars in a few days, as well as lose thousands of dollars over the course of a single hour. Taking advantage of a situation here might quickly escalate to a very uncomfortable zone for you.
The risk in crypto investment are numerous and here are a few.
To kick start, the word “volatility” in the cryptocurrency world shouldn’t be something to play with. Cryptocurrencies are over the top volatile. Their value can change at any point in time, making the market highly unpredictable.
The volatility can, however, be of an advantage to an investor by buying at a low price and then selling when their value rises. The possibility of buying at a reasonable price and later encountering a decrease in value shouldn’t be overlooked as well.
Some unprecedented rise like what happened in the early stages of last year was great for the market and investors as well, but on the negative side, it sure means things can also change anytime and this aspect of the crypto market is here to stay.
It is also advisable for new and young investors to invest what they can afford to lose. People who invest huge sums of money even when the market is booming, tend to suffer the most when there is a dip.
In some scenarios, the market gets back up and large part of the money is recouped but in others, there is no coming back once the money is gone. Investing is good, but you should test the depth of a river with both of your feet.
Finding the ideal coin should also be a priority. Forget the current price and rather look at the coins with the least risk, a high market cap and also take into consideration the available supply. Low priced coins also aren’t always advisable because you are looking to make a cut.
The established coins (BTC, LTC, and ETH) are almost the ideal ones. Investment, however, involves time and patience and the alternative coins to these big ones might also blow up with time to come.
