Cryptocurrencies are gaining a lot of popularity among both novice and expert investors these days. Ever since the crypto explosion of 2017, everyone seems to be interested in cryptocurrencies and wants to get a piece of the pie. However, one should be very careful when investing in cryptocurrencies. There are risks involved in this kind of investment, and it’s wise not to invest before you know about the risks.
Should you invest in cryptocurrencies - Pros and Cons
Investing in cryptocurrencies has its own set of pros and cons, which include:
Security & anonymity (+)
Cryptocurrencies are powered by blockchain technology, which is a decentralized technology for peer-to-peer, anonymous, and private transactions, meaning you can use cryptocurrencies to send/receive money in a totally secure and anonymous manner.
One of the major features of blockchain technology is decentralization, which means the network as well as the transactions or funds are unregulated and not governed by any centralized entity like banks or governments.
While this can be a good thing for privacy seekers, this also creates a number of complications, as a currency without proper governance can be volatile and be used for illegal purposes without being traced.
Talking about instability in cryptocurrency prices, the high volatility of cryptocurrencies can be a good thing as this investment can provide huge returns in less time compared to traditional investments. However, this can also be a negative thing, as the unpredictable price of bitcoin makes it difficult to be used for regular transactions such as payments.
Independent of Recession (+)
One of the good things about cryptocurrencies is that they are mostly independent of traditional markets like the stock market and banks, and any shift in the traditional market has no major impact on the value of cryptocurrencies.
Another good thing about cryptocurrencies is Altcoins. Altcoins are cryptocurrencies that were/are created as an alternative to Bitcoin (the first global cryptocurrency) and usually provide a solution to the Bitcoin problems.
Conclusion - should you invest in cryptocurrencies?
You should, if you wish to join the latest digital currency market and wish to leverage the blockchain technology for seamless, cross-border transactions. However, do your research and select the best cryptocurrencies that are backed by a good team and concept before you invest.
There are many new cryptocurrencies being launched almost daily, some of which have really good use cases and great concepts. Look for digital currencies that are trying to solve the world’s problems while providing common users with a nice and easy way to adopt blockchain technology.
On the other hand, if you are looking to make quick profits with cryptocurrencies, you can invest in trending coins such as Bitcoin, ETH, and others that have high volatility.