• 04 Aug 2022

Crypto: invest or not to invest?

Nearly everyone has heard about cryptocurrencies at this stage - an alternative digital payment created using encryption algorithms that function both as a currency and a virtual accounting system. However, many are still skeptical about crypto and the possible benefits of investing in them. 

 

First, it is worth remembering that cryptocurrencies are becoming increasingly popular, so much so that many businesses now accept them as a form of payment. Nevertheless, not all companies have the same business plans and financial goals; therefore, this innovative type of digital currency might not fit some cases. 

Let us explore some pros and cons of investing in crypto: 

1.     PRO - High risk, high reward

Cryptocurrencies tend to experience sudden spikes and drops in value, making them extremely volatile. The supply of coins from miners and the demand for them by purchasers dictate the prices, which can result in hefty returns (or not!). It takes time and dedication to understand these dynamics and make the right investment at the right time!  

 

2.     CON - Cryptocurrencies are a stumper

As already anticipated, understanding crypto takes time and effort, and not everyone can dedicate their energies to learning about such a complex structure. Investing in something unknown might not be the best choice; however, there is no need to despair: there are so many free resources online that can help you discover more about bitcoins and other related concepts. 

 

3.     PRO - Not so traditional 

No third parties are involved when transacting with cryptos, unlike in the traditional financial system. The fact that they can be viewed by anyone, anywhere, makes the process more transparent. In addition, because they are not tied to a single currency or economy, they are also not dependent on national inflation. 

 

4.     CON - Long-term suitability 

Cryptocurrencies are yet to prove to be a worthy long-term investment because there is no material good that determines their value - like gold for traditional stock markets. Therefore, it is difficult to predict what will happen in the future - it takes great bravery (and knowledge) to invest in crypto! 

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