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Should You Invest in Crypto Currencies?

Investment

November 8, 2021 | 

1570 Views | 

Jesus Guzman | 

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More than a decade ago, cryptocurrency was a strange concept. It was introduced in 2008 to mitigate the possibility of another financial crisis. At the time, it was the preserve of only a few tech-savvy people. Most people were sceptical that cryptocurrencies could be a success. The prospects of a new currency did not seem feasible.

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Today, the coins have achieved enormous market traction. Almost all quarters that were against the coins now support them. Governments that had earlier banned the currency are now pushing for it. They are already looking into the possibility of a central bank-backed cryptocurrency.

Several traditional financial institutions had also come out against the coins. They advised their clients not to invest in them. Most pointed to the possibility that Bitcoin could fail in the long run. Now that most are adding them to their portfolios, it's different. They are currently offering services or entering into partnerships with other crypto exchanges.

Cryptocurrencies are fast becoming mainstream

There are still concerns about stability. Cryptocurrencies are quite volatile. Bitcoin, for example, has seen some changes since its launch. It rose from the beginning, reaching an all-time high of $20,000 in 2017. It then went down until it reached a low of $3,000 in March 2020. The same is true for the other cryptocurrencies.

Bitcoin was then in an uptrend, breaking through resistance at $10,000, and is currently trading at around $12,000. During this time, it has established itself as one of the most valuable assets. The growth came at a time when most of the traditional economy was down. The coronavirus pandemic threw the system into disarray.

Even after the steady rise, some traders are not sure if cryptocurrencies are viable. They have yet to familiarise themselves with the world of cryptocurrencies as assets.

Cryptocurrencies are a worthwhile investment. They require good planning and knowledge. Here are some of the questions for those who want to invest in cryptocurrencies.

Why do you need to diversify your investments?

Every serious investor knows the importance of diversification. You need to avoid "putting all your eggs in one basket". Like any other investment, cryptocurrency is risky. The best way to ensure survival is to have different investment portfolios.

There have been cases of fraud in cryptocurrencies. There have been fake ICOs and other coins in the industry that have failed to catch on. In some of these cases, there have been losses that have even driven investors to suicide. You do not want to have the same experience.

Diversification of investments also leads to higher returns. Different coins have different uses. They also have different growth rates. If you spread your bets, you will enjoy the different benefits. Moreover, in case of a decline in a single coin, you will not lose too much.

Invest through regulated Crypto exchanges

Investing as an individual is quite risky. You can never be sure about the future of investments and which one is the best for you. This is why there are experts for almost every asset. Since it is a new asset, crypto experts are not that common yet. Nevertheless, you need to make the best investment decisions.

Look for a registered investment advisor (RIA) who is licenced by the Securities Exchange Commission. These experts have knowledge and experience. They have everything you need for successful crypto investment. The RIA also has a professional obligation to advocate for investors' interests.

Working with RIA also brings with it the necessary security. As registered companies, they are regulated. In case of irregularities, you can contact SEC.

The professionals also help you save time and money. There are thousands of cryptocurrencies to consider. It can take forever to understand them all. The professionals will assess your needs and recommend the right investment.

Focus on research and education

Working with a crypto expert does not absolve you from taking an active role in your investments. You need to do your due diligence and research before making an investment decision. There are several websites where you can learn about cryptocurrencies. There are also courses and books to learn more about cryptocurrencies.

There are also several helpful Reddit crypto groups.

With the right knowledge, you can understand the market better. You will also learn more about the different investment options. You can then choose the best one that suits you.

Also, only rely on reputable educational sites. Cryptocurrencies are a growing world. Using outdated information will not help you.

Thing to consider when investing in cryptocurrencies

There is some basic information you should know about cryptocurrencies. If you know this information, you will be safe when investing your money in this asset. The first thing you should understand is that investing comes with risks.

Crypto investments are not for you if you are looking to make a quick buck. Various market factors affect the value of the coins. It is better to invest the money you are willing to lose.

It would help if you also keep your emotions in check when investing in cryptocurrencies. Cryptocurrencies are masters of emotional manipulation to control asset prices. Most people trade out of fear of missing out (FOMO). The whales would spend a few minutes triggering a price drop to get others to sell the coins while they themselves buy back at low prices. Your investment decisions should be the result of research and evidence.

You also need to understand that different cryptocurrencies have different functions. While some function as currencies, others are financial transaction platforms. Others are also sector-specific, such as SOLVE for healthcare. The more solutions a cryptocurrency offers, the higher the chances of success.

You need to be aware that cryptocurrencies are still evolving. The future of cryptocurrencies is never certain. Other coins come onto the market and values can change at any time. Some coins may also disappear after some time. Take time to understand the future of each currency. Consider the regulations and the services offered. Only invest in stable coins that seem to have a long life.

Check our Article about Solana Price

Invest in Crypto Currencies Bottom line

Making investment decisions takes time. Most investors are primarily concerned with the return on their investments. Cryptocurrencies have proven to be ideal investments so far. They have maintained their high values even as the traditional financial sector suffers.

The best way to invest in cryptocurrencies is to diversify your investments. You should also work with a professional and constantly educate yourself.

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COMMENTS (1)

batholomew brown  batholomew brown . I’m a bitcoin trader and the time I’m writing this blog I can’t find a single review about many bitcoin trading signal services and companies. I have lost lots of money testing them for over an year. I don’t want you to be scammed too.   1 year ago from Canada

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