One popular way of investing in cryptocurrency is to buy it and then sell it when the value increases. The question of the safety of cryptocurrencies as an investment option is one that many potential investors are probably asking. This is in a bid to decide whether or not to invest in cryptocurrency.
As simple as the question is though, it is not one that can be answered with a simple “yes” or “no”. As an investor trying to decide whether or not to invest in cryptocurrencies, you need to consider the pros and cons of cryptocurrencies even though there are platforms like Bitcoins Profit that help you make profit even when crypto markets are crashing. Also, sites like Algo Signals help you master crypto trading
Pros of Cryptocurrencies
- The cryptocurrency market is still young. This means that there is still an opportunity for growth and expansion. Investors, who invested when the market was relatively new, especially through Initial Coin Offerings (ICOs), have made huge profits. Since the market does seem like one that would be around for a very long time, investors who invest in it now, are also likely to make huge returns in a few years.
- Cryptocurrencies are becoming more popular as a medium of exchange. They are thus proving to be a worthy and safer alternative to fiat currencies.
Asides this, they are proving to be important assets as they are a good store of value.
- If an investor properly times the buying or selling of these, then he is likely to make huge returns on this trade.
- Cryptocurrencies are a welcome upgrade to the status quo methods of carrying out financial transactions. The fact that they are allowing for peer to peer transactions, as allowed by the blockchain technology on which they are built, is making them grow in popularity.
- Built using cryptography and the blockchain technology, cryptocurrencies are secure and do not allow undue interference by third parties. Plus, they don’t allow counterfeiting of transactions or illegal access by fraudulent people.
- The fact that it allows investors to get huge returns in a short timeframe makes cryptocurrencies have a quite high Return On Investment (ROI). This makes it have increasing investor’s interest.
Cons of Cryptocurrencies
- The fact that cryptocurrencies are still new makes them shrouded in uncertainty. Potential investors are wondering about things like; the longevity of the system, and what happens to their money if this collapse does happen.
- The price of cryptocurrencies is volatile. Never stable, it is constantly alternating between lows and highs, thus making it difficult for newcomers to keep up.
- Many governments are still clamping down on cryptocurrencies. Because of the uncertainty that characterizes it, some governments are putting in place policies that favor neither cryptocurrencies nor cryptocurrency investment.
- Cryptocurrency trading largely occurs on exchanges and peer-to-peer marketplaces that also charge their own fees, which could increase the overall costs.
- There is a constant inflow of new cryptocurrencies into the market. Many of these are low-quality ones that could cause investors to lose.
Wrapping It Up
Investing in cryptocurrencies is a very risky thing to do, yet it could be very rewarding. One only needs to analyze the pros and cons carefully, and then decide whether or not to invest in cryptocurrencies.
Author | Emily Forbes
An Entrepreneur, Mother & A passionate tech writer in the technology industry!