What you need to know before investing in crypto
With the rise of digital coins, investing in crypto seems to be a profitable venture nowadays. Here’s what you need to know before you get into one.
You have probably heard of cryptocurrencies like Bitcoin; they have been gaining a lot of attention in the media recently. They can be a worthwhile investment option, but you need to make sure you understand what you are getting into before you consider parting with your money.
Rise of crypto
The world is more technologically literate than it was a few years ago. As the population becomes more tech savvy, innovations like cryptocurrencies are able to flourish. We are seeing a constant rise in the number of Bitcoin-related articles being published—articles which reporting about Bitcoin’s value soaring, and then crashing again.
Undoubtedly, you will have noticed the rise of crypto as awareness of it has entered the mainstream consciousness. The tales you have heard of people becoming very rich off a relatively modest Bitcoin investment may well be true. However, investing in crypto is by no means a sure thing.
The current space
A variety of cryptocurrencies exists out there today. The most well-known is Bitcoin, followed by Ethereum and others, collectively known as “altcoins.” These altcoins came into being because of “forking,” a process whereby someone takes the core idea of Bitcoin and refines it to serve a particular niche.
There is now a multitude of cryptocurrencies competing for market dominance, and many of these are starting to erode Bitcoin’s long-reigning supremacy. This means that any potential investor is going to have some homework to do. The individual merits of each type of cryptocurrency could fill entire articles on their own. You can find an overview here by Investopedia.
Fiat currencies are the ones that we are most used to using on a day-to-day basis. It is important to realize that cryptocurrencies are not regarded as currencies by any international body. Although individual nations and stock exchanges might allow cryptocurrency investments, cryptocurrencies are not treated the same as regular fiat currency.
The most common venue for the buying and trading of cryptocurrencies is through online exchanges. Nowadays, a limited number of financial institutions allow their customers to bet on Bitcoin. Note that, as yet, mainstream financial institutions are not facilitating the direct purchase of Bitcoin. Instead, investors are betting on the future value of Bitcoin in the form of futures.
Before you deposit any funds, whether they’re in fiat currency or cryptocurrencies, you should research them thoroughly—as you would any exchange. There have been some high-profile incidents where people have lost huge amounts of money because of hacking or malicious behavior.
Investing in crypto
The most important aspect of investing in crypto is doing your research. Make sure to thoroughly vet any of the services that you are considering to use. With any form of investing, you should make sure you do your due diligence. If you aren’t familiar with many of the terms surrounding cryptocurrency, you should make sure to learn these first. This guide to common cryptocurrency terms can help you get started.
Investing in cryptocurrency is not something you should enter into lightly, or without due diligence. However, as long as you tread carefully, an investment in cryptocurrency can provide a very worthwhile return.
DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation for writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.
Fintech Companies in Colombia Have Seen Significant Growth
Regarding financial inclusion in Colombia, Liza Villabona, vice president of digital transformation at Crezcamos, believes that informal credit continues to...
Infinityhub Launches Crowdfunding Campaigns to Finance Redevelopment of Student Housing in Naples
YCare Napoli-Porta Nolana, a project of InfinityHub and ICS House, has launched a simultaneous equity crowdfunding campaign on Ecomill and...
Inditex Studies the Creation of a Sustainable Fund to Invest in Startups
Following the elimination of plastic bags in its stores, Inditex began charging for paper bags and envelopes in 2021 with...
Don’t Get Scammed on Flippa — Here’s What to Look Out For
If you’ve seen the name Flippa, then you’ve probably also seen the word scam next to it. But is the...
Can Blockchain Games Provide Sustainable Income?
While the concept of earning a living by playing blockchain games is still in its infancy, industry experts remain optimistic...
Africa1 week ago
Green Hydrogen: How Can Morocco Meet 4 to 8% of Global Demand?
Africa2 weeks ago
Cape Verde PM Asks Banks to Change Perception of Financing in Agriculture and Fisheries
Cannabis4 days ago
The First Application to Grow Medical Cannabis Was Received in Poland
Featured1 week ago
Peridot Solar Takes Over a 135 MW Agrivoltaic Project in Sicily from Iqony Solar Energy Solutions Italia
You must be logged in to post a comment Login