Cryptocurrencies: Pros, Cons and Investment Tips

Cryptocurrencies and tokenized equity are now a trending topic in many countries around the world. There are a huge number of sites available dedicated to cryptocurrency issues, which  offer both news and educational materials that are interesting to a wide range of readers. And against the backdrop of very high rates, interest in “crypto” arose even among those who had never been interested in such things before. What is worth remembering for those who want to invest in such an unusual asset?

Pros and cons of cryptocurrencies

As an investment option, cryptocurrencies are interesting today for several reasons. The most known to the general public is its rather unstable price: for example, Bitcoin can easily rise above 60 thousand and then fall to 40. Meanwhile, cryptocurrencies are also different:

• excellent speed of payments;

• high level of confidentiality;

• low transaction costs;

• “built-in” protection against inflation.

Naturally, “crypto” also has its disadvantages. Thus, the legislation of many countries does not yet have clear provisions within which work with cryptocurrency is regulated. The market is quite “young” and will be regulated in the future, which may introduce into the lives of investors the need to regularly study legislative summaries. Also typical for cryptocurrencies:

• high volatility rates;

• risks of hacking of services that operate with a new asset;

• controversial reputation that “slows down” growth;

• legal risks (often systems for working with cryptocurrencies do not provide any insurance for investor risks at all).

How to invest: expert advice

Experts note: cryptocurrencies should be considered as a long-term asset, that is, do not chase short-term profits, but find a good moment of low cost, invest a certain amount and calmly wait for growth. The cryptocurrency market is characterized by regular price jumps, so trying to make money “here and now” is fraught with losses.

In addition, those wishing to invest in cryptocurrency are advised to:

• do not take loans for these purposes;

• do not invest the last available resources in crypto;

• operate with amounts the loss of which will not make a dent in your financial situation;

• Do not invest all your resources in one currency - it is better to create a portfolio of several of the most promising ones.

Cryptocurrencies are an interesting and promising asset, but regulatory difficulties and high volatility make it more of an option for experienced investors.