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The Pros and Cons of Investing in Crypto

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The Pros and Cons of Investing in Crypto

Cryptocurrency. The hottest topic of the last few years. No matter where you go online or offline you will undoubtedly find someone discussing crypto. Telling you to invest. Giving you advice on which cryptos are worth buying and which ones to avoid.

 

But it isn’t quite as simple as just popping down to the crypto shop and buying a few cryptos. It is a lot more complex than that. There are a lot of risks involved with investing in cryptocurrency. As well as a large number of potential rewards if you play it smart.

 

We have been speaking to the investments advisor Sim Gakhar and the lovely people at Cryptotutors to find out all the pros and cons of investing in crypto. And we are going to share them with you so that you can venture into your crypto journey fully informed. And we might even throw in some useful investing tips along the way!

 


Crypto is a Rising Market

 

Cryptocurrency has become increasingly popular in the last few years and is showing no signs of slowing down. Despite different coins constantly fluctuating, it is still a fantastic market to get into. Particularly right now while it is still in its infancy. This might be the biggest positive to investing in crypto. You are securing your position in a massive market that spans the globe. As more companies and businesses start accepting cryptocurrency as a form of payment, it is only going to become stronger.

 

There is a lot of Risk Involved in Cryptocurrency

 

You might see a lot of people talk about cryptocurrency as if it was gambling. Much like the stock market, cryptocurrency is a gamble in a way. You can never be 100 percent certain how well crypto is going to do. It could be worth a lot one day and worth nearly nothing the next. This is the biggest and most dangerous risk with investing in crypto. You can potentially lose a lot of money.

 

This is true of nearly any financial investment, but crypto carries a lot more risk than the traditional stock market just because it is so decentralized. There are no strict regulations surrounding it and, as such, means there are greater losses to be made.

 

Investing in Cryptocurrency can Teach you a Lot

 

Normal finances and economics can be confusing. Our world economy is hundreds of years old now and has become a complex maze of rules and regulations. It can be difficult to navigate. Cryptocurrencies, while still complex, are a lot easier to grasp. And as you do research into crypto and invest in it, you will inevitably learn a lot about finances, economics, and business as well.

 

So you stand to gain a lot more than just money from investing in crypto. You stand to develop a lot of useful and practical skills that can be employed in a number of fields. The skills you learn from navigating a crypto market will potentially allow you to break into the world of finance. And it is a great skill to list on your CV as well.

 

Investing in Crypto can become Addictive

 

As we said before, investing in crypto is a form of gambling. And gambling is addictive. Crypto runs a greater risk of addiction simply because of its volatile nature. Take dogecoin for example. It went from being a simple joke coin to one of the most powerful cryptocurrencies on the market. All because of a tweet by Elon Musk. This just proves how volatile crypto is.

 

People like to dream that their small investment into crypto will make them a millionaire overnight. That they will wake up to see their wallet is now worth enough that they can quit their job and retire. It is an appealing dream. But one that can lead people down a dark path of addiction that threatens to leave them in financial ruin.

 

It Is a Great Way to Earn Money on the Side

 

The biggest advantage crypto has over the regular stock market is how accessible it is. Apps like Coinbase make it easy to buy and sell crypto and monitor it. This is why crypto works so well as a ‘side hustle’ if you will. Rather than making it your primary source of income, you can just dedicate a few hours a week to it on the side. Investing small amounts and watching them grow over time. Even if you only make a few hundred dollars extra, that is still a worthwhile investment.

 

Our Top Tips for Investing in Crypto

 

Our first, and most important bit of advice is this: Never invest more than you can afford to lose! This is THE golden rule. Unless you are a financial wizard who has years of experience under your belt, the risk is not worth it.

 

Invest small amounts, to begin with. Maybe a few hundred a month if you can afford that. You should never put yourself in a position of losing all your money.

 

Our second tip is to be patient. Miracles don’t happen overnight. Sure, there have been times a cryptocurrency will skyrocket instantly. But it is a rarity. You will need a lot of patience if you want to see any serious returns from your investment. In the crypto community the phrase ‘Hold’ is thrown around a lot. This basically means holding onto your coins even when the price starts to plummet. This leads to the next point.

 

Buy low, sell High. This is age-old advice that is still relevant today. Not just in crypto but any form of investment. You should never really sell at a loss unless your situation is really dire. It is always better to just ride out the storm and hope the coin will go back up in value. Otherwise, you have just wasted your investment. It can be scary watching the price plummet. But you need to have a strong stomach if you want to succeed in the crypto world.

Article Categories:
Crypto Currency · Intro to Crypto

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