Investing in cryptocurrency could get you filthy rich, or it could end up in you losing all you invested money. Both outcomes are a possibility when investing in crypto. It is extremely risky with the potential to be extremely profitable. So, is it wise to invest in crypto in 2022?
Cryptocurrency is not just a buzzword going around in the world of investing. You might be hearing everyone around you talking about some kind of crypto, from Bitcoin to Ethereum to Dogecoins. Before you put all your savings into crypto, you should first understand the world of crypto and blockchains. Let’s try and understand what crypto is.
What Is Cryptocurrency?
Cryptocurrencies are digital or virtual currency or assets that people use for investment purposes or to purchase goods and services online. You buy crypto by exchanging real-world money like Dollars or Euros for digital coins or tokens. Cryptocurrency is a decentralized currency that doesn’t have a central authority like a government controlling them, which means it can’t be controlled and manipulated. These currencies are created using complex cryptographic techniques and use different encryption algorithms to make them tradable securely and safely.
Other than just coins, there are multiple kinds of ‘blockchain’ products you can invest in, like non-fungible tokens (NFTs) or decentralized finance. Many people who are already deep into cryptocurrencies consider these investments new opportunities to become millionaires or even billionaires. People who haven’t already dipped their toes into the crypto world may consider investing in these digital spaces now. But should they?
Should You Invest in Crypto?
If you think of investing in cryptocurrency, you should first do your research just like any other investment. People have hit jackpots and earned millions of dollars through crypto, but people have also lost millions doing so. It would be best to understand how different digital currencies work and what they offer. You should also understand, at least, the basics of how blockchains work. People who may not have a background in coding or computers might find it harder to understand some aspect of the blockchain world, but they should try.
First, Research Crypto
You should research what different cryptocurrencies are available in the market. There are so many different choices with different kinds of risks and volatility. Look past the already big names like Bitcoin and Eth and find some that may be the next big thing.
Also, if you want to invest in something safe and stable, crypto might not be for you. Cryptocurrencies have a highly volatile price. The prices fluctuate in massive ways, both up and down, which is why this investment isn’t recommended to the faint of heart. Bitcoin reached its all-time high price of over $65,000 in 2021 before falling back down.
Invest While It’s New
A big reason why people should be investing in crypto is that cryptocurrency is still in its early stages. If you get in now, even if the prices may seem very high, you could be entering the world of crypto right on the ground floor, and no one knows how high the world will grow in the future. Some experts say bitcoin may be worth over $100,000 soon.
Not everyone thinks that investing in crypto is a great idea, especially for the average investor. Aside from the volatile and fluctuating prices, the world of crypto is filled with scammers and hackers as no central government regulates or controls the market.