While we would love to see widespread adoption of cryptocurrencies, we always encourage beginners not to invest more than they’re willing to lose. Furthermore, Cryptocurrencies as things stand today are very volatile and their value can change quickly.
There is an argument that all governments could step in and ban Crypto at any moment (although we highly doubt it) there is however a possibility that some governments may have very strict regulations which could have an impact on the Crypto you’ve invested in. The other case is that some cryptocurrencies may suddenly change rules, split up, or even do a total “Rug Pull” which refers to basically going “MIA – Missing In Action”, running away which would result in the Crypto being completely dumped, leaving you with nothing but breadcrumbs.
Is cryptocurrency safe?
While some Cryptocurrencies continue to be hacked each day by bad actors, security is a great focus in the crypto community and this won’t stop Crypto from existing. The value of Cryptocurrencies is undoubtedly volatile, and it could be considered risky but so can investing in any other asset class. As with any investment, it’s important to DYOR – Do Your Own Research and only ever invest what you’re willing to lose!!
There’s no assurance that a cryptocurrency project you invest in will be successful. Thousands of blockchain businesses compete for investors’ attention, and fraudulent projects are plentiful in the crypto sector. As a result, only a tiny percentage of cryptocurrency initiatives will succeed.
Regulators may also target the entire Cryptocurrency industry, especially if governments perceive Cryptocurrencies as a risk rather than simply a technological innovation.
Another thing you need to be aware of with Cryptocurrencies is that there is a high degree for investors to provide an incentive to miners to keep the Blockchain database. As a result, because Cryptocurrencies are based on cutting-edge technology, investors may face additional risks if they invest in Cryptos that don’t have a strong development team. Furthermore, most of the technology is still under development and has yet to be thoroughly tested in some real-world situations. Security overall is a big concern when it comes to Crypto and we discuss it comprehensively on the Encryptoza Platform.
Is crypto a good long-term investment?
It would be nice if we had a magic glass ball that allowed us to look into the future and confidently tell you that Crypto will 1000% succeed but unfortunately we cannot give you that guarantee, but what we can say is that we strongly believe some Cryptocurrencies specifically Bitcoin will change peoples lives and will be good for the advancement of humanity. We are starting to see more and more people get on the Crypto bandwagon so we are sure to see more mainstream adoption in the future but in the short term there are certain risks that we need to all keep in mind.
By design, no currency can be guaranteed as it depends on the stability of its economy, which has many variables that may change with time.
Remember that buying currency means you’re only entitled to what that currency will be worth in the future and over its lifespan – which could be decades. However, most people find currency valuable because they believe it will gain value over time, so Cryptocurrency can also hold intrinsic value like gold does – even though some governments choose not to recognize Cryptocurrencies as legal tender.
As an unregulated market and investment, Cryptocurrencies also pose a considerable risk in the event of an exit scam.
The cryptocurrency industry is constantly evolving and offers new possibilities for people worldwide to engage in helpful, meaningful transactions that they might not be able to otherwise.
For any cryptocurrency project, long-term success is defined by achieving widespread adoption. If you want to know more you may visit Encryptoza.
Things to Consider as an Average Investor
1. Cryptocurrency is volatile
Crypto is indeed as irritable and contentious as a 12-year-old. Its value goes up and down erratically, leaving you wondering what might happen next day after day. Moreover, cryptocurrency values have been known to fluctuate significantly. To put it another way, cryptocurrency investing is not for the “weak hearted”.
2. Cryptocurrency has lots of unknowns
Cryptocurrency is so new and disrupting that there’s still a lot the market doesn’t know about it. Cryptocurrencies will continue to evolve, and uncertainties surrounding their regulation will remain.
3. Cryptocurrencies are unregulated
In real-world terms, cryptocurrency projects aren’t as closely regulated as traditional stock markets – but many investors see this as a plus rather than a minus.
4. Cryptocurrency makes fraud easier
Cryptocurrencies are at greater risk of fraud. Unfortunately, they’re also more vulnerable to theft and scams. Government regulators in some countries may have trouble keeping up with the growth of blockchain technology, which means that certain cryptocurrency businesses might get away with breaking rules that protect investors – just like they did before the internet came along.
5. Cryptocurrencies have 100% guaranteed return
Returns of up to several thousand percent are possible. That said, cryptocurrency investing is very risky – just like any other kind of investing.
6. Cryptocurrencies may not have inherent value
Some Cryptocurrencies other than Bitcoin are priced based on market speculation, not underlying value like the stock market. Because cryptocurrencies hold no physical presence (such as gold bars or coins), their real-world value depends on how much people will pay for them in the future. This fact alone makes it almost impossible to determine what they might be worth.
7. Cryptocurrencies aren’t insured against theft by governments
While it is difficult to predict the future of cryptocurrencies, one thing is certain: government intervention remains a wildcard that may significantly influence their development in the future. Most countries have taken a wait-and-see attitude to the date, but some governments are less optimistic about the long-term implications of cryptocurrencies.
Final Words: Should you invest in cryptocurrency?
Whether or not you should invest in cryptocurrency depends on how much risk is involved to you. If the idea of being part of an amazing technology that could revolutionize the financial industry while being conscious of the possibility to losing money excites you instead of scaring you, then you should possibly consider joining the party.
On the other hand, if you’re a cautious investor and want something that behaves more like a commodity than an investment, then cryptocurrencies might not be suitable for you. The important thing is to remember that all investments carry some level of risk and the potential for reward. The most important thing is ensuring you have the right knowledge and support to make smart decisions. Our goal at Encryptoza is to ensure that we make understanding Crypto simple.
Visit https://encryptoza.com and we will be glad to help you get started with your Crypto journey!