It's possible to get abundantly wealthy by investing in cryptocurrency. But you could also lose all your hard earned capital. How is it possible that both of those things could be true? Well, like most investments, crypto assets come with an arguably larger host of risks but counter with mind blowing potential rewards.
Cryptocurrency is a good investment if you want to gain direct exposure to the demand for digital currency and the projects or businesses they facilitate. Large Business are starting to trend toward the crypto market. High authority figures like Elon Musk or high profile companies like Paypal.
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Is cryptocurrency safe?
There are certain risks presently within crypto sector that are not as prevalent in traditional financial exchanges, such as those for stocks and bonds. Cryptocurrency markets have been prone to hacks and other cyber criminal activity. These security breaches have led to sizable losses for investors who have had their digital currencies stolen and are hard to trace.
Frauds and scams are also heavy hitti9ng in the crypto industry. Pumpers who promise investors dazzling returns are typically unable to fulfill their lofty promises since they far too often peddle "rags to riches" rather than legitimate blockchain backed endeavors. Investors who buy into the hype can suffer brutal losses when these projects eventually fail.
Moreover, it's not as easy to store cryptocurrencies as it is to store stocks or bonds. While exchanges such as Coinbase (NASDAQ:COIN) make it fairly easy to buy and sell crypto assets such as Bitcoin (CRYPTO:BTC) and Ethereum (CRYPTO:ETH), many people don't like to keep their digital assets on exchanges due to the aforementioned risk of cyberattacks and theft.
Rather, some prefer offline "cold storage" strategies such as hardware or paper wallets. But cold storage comes with its own set of obstacles — namely, the risk of losing your private keys, which would make it nearly impossible to access your cryptocurrency assets.
There's also the risk that the crypto project you invest in will not succeed. There are thousands of blockchain projects, and competition is is growing each passing day. Regulators could also crack down on the entire crypto industry if more governments begin to view cryptocurrencies as a threat to sovereign currency rather than just an innovative technology.
Lastly, and likely most important, it's beneficial to understand that cryptocurrencies and blockchain in general are cutting-edge technologies. While that makes them exciting, it also increases the risks for investors since much of this tech is in early developing stages and is not yet proven it can be tested in a failing or rising market. The history and data just isn't there yet. Buying cryptocurrency is a close second to angel or IPO investing, and investors should expect venture capital-like outcomes in which the vast majority of crypto projects get left behind and become worthless. Only a small number of projects will ultimately succeed in a competitive market, and it's unclear if these big wins will be enough to offset the many losses.
That said, the blockchain industry is growing bigger and stronger every day. A long overdue financial infrastructure is being built -- such as institutional-grade custody services
-- and this is providing professional and individual investors the tools they need to oversee and safeguard their crypto holdings.
Major corporations, including MicroStrategy and Square, have collectively invested hundreds of millions of dollars in bitcoin and other digital assets. Tesla (NASDAQ:TSLA) bought $1.5 billion worth of bitcoin in early 2021 and made plans to accept the currency as payment for its cars. These companies clearly see the potential of cryptocurrency -- as do a growing number of individual investors -- and they believe the industry has matured to a point where investing sizable sums in crypto assets is safe.
Is crypto a good long-term investment?
Whether crypto assets pay off for investors will ultimately be determined by whether they achieve wide-scale adoption around the world. Many signs point to yes but right now, it is still highly speculative. Here at bestgoldinvestmentreview we are of the opinion that crypto is a generational opportunity.
Bitcoin, for example, is seen by many as an investment akin to gold. Unlike fiat currencies, such as the U.S. dollar and Japanese yen, which can seemingly be printed at the will of any government, bitcoin has a maximum supply of just under 21 million coins.( This was created by the founder of Bitcoin) Many investors thus view bitcoin as a scarce asset that could increase in value as fiat currencies depreciate. Others believe bitcoin will gain extensive use as a digital form to replace cash. There some high expectation that it may actually be adopted as the first ever global currency.
Ethereum, meanwhile, wants to serve as a global computing platform. It serves as a launchpad for decentralized applications, or often referred to as "dapps," which are open source and not controlled by a single entity. Ethereum allows the use of smart contracts, which have their terms written directly into code and can be executed automatically.( This is troubling for some) These technologies could disrupt massive tech and financial sectors, such as payment gateways and online banking, and potentially create entire new self sustaining markets.
If Bitcoin and Ethereum can achieve these ambitious goals, then investors who buy the NFT (Non-Fungible Token) today will likely be richly rewarded in the coming years. However, there are many other projects competing with these cryptocurrency leaders, and their success is not assured by any stretch.
Are there better investments than cryptocurrency?
There are other ways to potentially profit from blockchain technology besides investing directly in cryptocurrencies.
One solid option is to buy the stocks of companies that are rapidly adopting this game-changing tech.
Of course, which of these options is best for you is something you'll need to decide for yourself. Hopefully, this article has given you some key factors to consider that will help you make the correct choice for your personal investment portfolio.
The Solution is not cut and dry. Investors must make their own decisions based on risk factors, time sensitivity and overall capital.
One thing that we believe is a big help for any expert or beginner is to find a broker that suits their specific needs. We have compiled a list of the top 5 Crypto brokerages that make buying, holding and selling crypto more straightforward and secure.
This is not advice, but a code that we follow.
Before you invest in risky/non proven investments. One should consider investing in a stable asset that has proven history. Once an individual or professional has secured a financial hedge, then they should consider higher risk investments.
We used Regal assets for buying a large position in gold and silver and used the rollover gains to purchase cryptocurrency incrementally. This can cost average amidst high volatility prices or even add to a winning position.
Ready To Get Started With Crypto?
If you are looking for a reputable broker, We have reviewed over 20 brokerages and have decided on the best 5 for new and experienced investors.
Please feel free to visit our overview page of the Top 5 Cryptocurrency Brokerages.
There you will find and be able to access full-in depth company reviews to help make a decision based upon your requirements. We test companies based on customer service, fees/pricing and most importantly, security.