With the recent plunging prices of cryptocurrency, a lot of investors are seeing red. Would-be investors have to think twice or thrice before they even jump into this ocean of "unpredictability". Is cryptocurrency investment still safe? Can it still be regarded as a secure investment? You may have asked yourself this, you may be hesitant to invest your hard-earned cash in this relatively new type of investment. Enticed by tales of instant millionaires, investing in crypto is very tempting, no?
Is Cryptocurrency Investment Still Safe and Secure?
In reality, investing in cryptocurrencies is as secure as any other kind of investment available today. Before investing in cryptocurrencies, it is necessary to go beyond the hype, comprehend the market's fundamentals, and adhere to a few investing guidelines. Consequently, if you are interested in diversifying your investment portfolio, let's evaluate cryptocurrencies using the same criteria that apply to traditional assets.
Is Cryptocurrency The Future?
Most individuals are familiar with the major cryptocurrencies, such as Bitcoin and Ethereum, and frequently use them as a market investment signal. Instead of focusing solely on the worth of the coins, we should examine their underlying technology.
For the uninitiated, blockchain is a relatively young technology that is the driving force behind all cryptocurrencies. It is simply a very secure digital ledger that cannot be altered, hacked, or cheated.
And the beauty of blockchain is that it can be applied beyond the financial sector. In reality, we Malaysians are using a blockchain-powered application every day without even realising it. Because our MySejahtera app utilises blockchain technology, your data is protected and your immunisation certificate is authenticated.
Is cryptocurrency investment still safe to be your piggybank?
Compared to the Internet, blockchain technology is being embraced at a considerably faster rate, with more than 80% of publicly traded corporations utilising it for supply chain and financial activities. In conclusion, blockchain technology is not a passing fad and is here to stay. It is a real technology with applications in the real world.
Of course, you might ask, what does this have to do with bitcoin investment? How to invest in cryptocurrencies and blockchain technology.
How To Invest In Cryptocurrency Wisely?
Now that we understand the potential of blockchain, if you wish to invest in that technology and platform, you must invest in cryptocurrencies as if they were company stocks.
If you wish to invest in a publicly-traded company, for instance, you must purchase their stock on a licenced and controlled stock exchange. Similarly, if you believe it is worthwhile to invest in blockchain technology, you might purchase a reputable cryptocurrency through a licenced digital currency exchange.
Currently, investment in crypto is comparable to investing in corporate stock. A brief examination of global events reveals that cryptocurrency is here to stay.
- Over 7 per cent of Bitcoin's 21 million coins are currently owned by publicly traded companies
- Payment processors such as PayPal have enabled customers to pay using cryptocurrencies
- Governments throughout the globe (most notably in California and the United Kingdom) are beginning to consider the adoption and regulation of digital currencies.
As a result, it is essential to consider crypto investments in the same manner as for regular assets. You must diversify your portfolio so that you are less likely to experience severe financial losses during market declines.
Four Simple Rules To Follow For Cryptocurrency Investment
1. Invest In What You Can Afford To Lose
The cardinal rule of investing: You should never invest money you cannot afford to lose. There are low-risk investments with assured but modest returns, such as fixed deposits, and high-risk investments, such as Futures, Options, and cryptocurrencies, with the potential for higher profits but the possibility of losing everything.
2. Always Use Risk Management Strategies
By now you should know that you should never put all your eggs in one basket. Do you have a contingency plan? As an investor, you should always have a strategy to limit risk, such as entering at support and quitting at resistance, reducing portfolio volatility by diversifying your investments, and spreading the risk over a variety of asset classes divisions such as properties, commodities, cash and shares just to name a few.
3. Invest in Reputable Cryptocurrencies
If it is too good to be true, then it is for sure, especially for new cryptocurrencies with seemingly unbelievably high returns. Similar to investing in stocks, if you want to invest in cryptocurrency, you should conduct extensive studies first and invest in projects you truly understand. Leave speculation to seasoned investors with extensive market understanding. Remember that you are supposed to be investing, instead of gambling away your money.
4. Only Use a Safe Platform
Where you choose to invest is also a significant consideration, as certain cryptocurrency sites are unregulated and frequently offer highly volatile currencies. Only use regulated platforms, such as Luno, Tokenize and Sinegy just to name a few. These credible companies provide cryptocurrencies that have been reviewed and approved by regulators, taking into account a variety of characteristics that ensure the coins offered are safer long-term investments with stronger fundamentals.
Conclusion-Should I Invest in Crypto?
Cryptocurrency is a digital asset that employs cryptography to safeguard its transactions and regulate the issuance of new units. Decentralized cryptocurrencies are not subject to government or financial institution control. This makes it a desirable investment for individuals seeking protection against inflation and economic upheaval.
There is no denying that cryptocurrency is also a wonderful way to diversify your portfolio, as its value is independent of traditional assets such as equities and bonds. Then again with great returns come great risk. So is cryptocurrency investment still safe for all of us? As long as you make your investment wisely, you can still gain profit from your cryptocurrency investment.
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