Should You Invest in Crypto Currencies?

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Over a decade ago, crypto was a strange concept. It was launched in 2008 to mitigate the possibility of another financial crisis. By then, it was a reserve of the few tech-savvy. Most people were sceptical about the potential of crypto becoming a hit. The prospects of a new currency seemed non-viable. 

Fast forward to today, the coins have gained massive market traction. Almost all quarters that had opposed the coins are now in support. Governments that had earlier banned the currency are now pushing for it. They are already looking for the possibility of central bank-backed crypto. 

Several traditional financial institutions had also opposed the coins. They discouraged their clients from investing in them. Most sited the possibility of Bitcoin failing in the long run. It is different from now when most are putting them into their portfolio. They are currently offering services or partnering with other crypto exchanges. 

While the cryptocurrency world is fast becoming mainstream

There are still concerns about stability. The cryptocurrencies are quite volatile. Bitcoin, for example, has had some changes since its start. It rose from beginning to hit an all-time high of $20k in 2017. It then took a downward spiral to trade the lows of $3k around March 2020. The same is evident with the other cryptocurrencies. 

Bitcoin has afterwards had a bullish run to move past the resistance levels of $10k. It is at the moment trading at around $12k. In that same period, it has established itself as one of the most valuable investments. The growth has come when most of the traditional economy is going down. The Coronavirus pandemic has messed up the system. 

Even after the steady rise, some traders are not sure of the viability of the cryptos. They are yet to get conversant with the crypto world as assets. 

Cryptos are a viable investment. It requires proper planning and knowledge. Here are some of the topics for anyone considering investing in cryptos; 

Diversify Your Investments 

Every notable investor understands the importance of diversity. You have to avoid “putting all eggs in one basket.” Like any other investment, crypto is risky. The best way to ensure survival is by having different investment portfolios. 

There have been cases of scams in crypto. The industry has experienced fake ICOs and other coins that failed to pick up. Some of these have come with losses prompting investors even to commit suicide. You don’t want to have the same experience. 

Diversifying investments also come with higher returns. Different coins come with various uses. They also experience different growth rates. By spreading the stakes, you get to enjoy the different benefits. You also won’t lose too much in case of a single coin decline. 

Invest Through Regulated Professionals 

Investing as an individual is quite risky. You are never too sure of the future of the assets and the best one for you. That is where there are experts in almost every asset. Since its a new asset, crypto experts are still not as common. Yet, you still have to make the best investment decisions. 

Look for a Registered Investment Advisor (RIA) approved by the Securities Exchange Commission. These experts come with knowledge and experience. They have everything you need for successful crypto investment. The RIA also has the professional obligation to work for the investor interests. 

Working with an RIA also comes with the needed security. As registered entities, they are regulated. You can report to the SEC in case of any irregularities. 

The professionals also help in saving time and money. There are thousands of crypto to consider. Understanding all might take ages. The professionals assess your needs to recommend the right asset.

Focus on Research and Education

Working with a crypto expert doesn’t relieve you of an active role in your investments. You have to do your due diligence and research before making an investment decision. There are several sites for training on crypto to consider. There also courses and books to learn about crypto. 

There are also several helpful Reddit crypto groups. 

With the right knowledge, you get to understand the market better. You also get to learn different investment options. You can then settle on the best that works for you.

Also, only rely on reputable training sites. Crypto is an expanding world. Using outdated information won’t be of any help.

Things to Keep in Mind When Investing in Crypto

There are several underlying information to know about cryptos. Having this information keeps you safe when putting your money on the asset. The first thing to understand is that investing is risky. 

Crypto investment is not for you if you are looking for a “get-rich-quick” scheme. Several market factors affect the value of coins. You are better off investing the money you are willing to lose. 

It would help if you also kept emotions in check when investing in cryptos. The crypto whales have mastered emotional manipulation to control asset prices. Most people trade based on the fear of missing out (FOMO). The whales would trigger a few minutes drop for others to sell coins while they repurchase at low prices. Your investment decisions should be a result of research and evidence. 

Also, you have to understand different cryptos have various roles. While some act as currencies, others are financial transaction platforms. Others are also sector-specific like SOLVE is for healthcare. The more solutions crypto offers, the higher chances of success. 

You need to understand that cryptos are still a work in progress. The future of crypto is never assured. Other coins are also coming up, and the values can always change. Some coins might also vanish after some time. Take time to understand the future of the specific currency. Consider the regulations and all the services it offers. Only invest in stable coins that look to have a permanent lifespan. 

Bottom Line 

Making investment decisions takes time. Most investors are all about return on investments. Cryptos have so far proven to be ideal investments. They have maintained high values even as the traditional financial sector suffers. 

The best way to invest in a crypto is by diversifying investments. You also need to work with a professional and keep on learning. 

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