Cryptocurrency has been growing in the last couple of years. Those who still think it is a fad are surprised why the industry is yet to collapse. There are no virtual currencies that can be compared to crypto. If you’re thinking about investing in cryptocurrency, it is important that you do due diligence as you don’t want to end up in the hands of scammers. You can check out bitcoin-code.org for more information. There are some tips that will come in handy if you’re looking to invest in cryptocurrency and we’re going to highlight some of them.
The U.S Wants to Regulate the Industry
The United States government has realized the significance of cryptocurrency and the impact it can have on the economy. There were two bills in support of cryptocurrency that was recently introduced in the House of Representatives. The purpose of the bills is to regulate the cryptocurrency industry and also protect consumers against people with ill motives. There is definitely a future for cryptocurrency if the federal government is stepping in to provide regulations.
Cryptocurrency Is Highly Volatile
This is something that should be clear from the onset. Cryptocurrency investments are highly volatile. In 2017, the value of Bitcoin was at its highest. Those who had bought the coin when it was still cheap became millionaires overnight. Two years later, the value has been slashed by almost half. This is the nature of cryptocurrency. Just like any other investment, you should only put money that you’d be willing to lose. You have to do serious research on a coin before you put your money. The key is to reduce the risks that come with trading cryptocurrency.
Investing a Portion of Your Portfolio
There are investment bankers who are of the opinion that cryptocurrency like bitcoin is the most important yet misunderstood asset. Those who have no idea how cryptocurrency work will say it is the biggest scam of our time. Cryptocurrency can be used as a means of diversifying an investment portfolio. It will be living in denial if you fail to acknowledge how cryptocurrency has disrupted technology and the financial systems in the last couple of years. Even though bitcoin is still the clear leader, there are some other cryptocurrencies that have started gaining popularity and it is only a matter of time before it becomes a mainstream form of payment.
It Can Aid Business Transactions
If you’re transferring money, there will be a need for a third portal for it to be successful. Cryptocurrency eliminates the third portal. The transactions between two parties are made possible through private and public keys. A user will need a wallet so as to link the account with the public and private key. This will eliminate the transaction fees which are usually charged by banks and financial institutions when sending and receiving money. The majority of cryptocurrencies have adapted Blockchain technology which minimizes the chances of hackers getting into their systems.
It Could Vanish
Although this is something that a lot of people don’t like talking about, all your cryptocurrency could vanish in thin air. There is no central storehouse and there is a high chance that everything that you have could be wiped out. Your cryptocurrency could all disappear if your computer crashes and there is no backup. Hackers could also gain access to your computer and steal the cryptocurrency.
The Market is Unpredictable
You might already be aware of this point by now. You can know the market cap for just about any coin. The Harmonycoin is marked at $32 while bitcoin’s market value is at $104 billion. It is hard to predict the next big coin given the volatility of the industry.
Invest With Open Eyes
Cryptocurrency is no ordinary investment. There are so many dynamics involved and it will be hard to establish a consistent pattern. Sometimes all you can do is speculate and hope for the best. You should take your time to learn the industry before you decide to put your money in it. Make sure what you’re investing is something you can afford to lose. Cryptocurrency shouldn’t be a get rich quick scheme.
To sum it up, there are so many coins that have been cropping up in the last couple of years and bitcoin still leads the race. Cryptocurrency is something that can’t be seen or touched and that is why a lot of investors are skeptical about putting their money on the trade of coins.