The main purpose of Cryptocurrency is to fix problems of traditional currencies and give more power to the currency holders. However, these days Cryptocurrency is considered more as an investment option. As it has shown the ultimate rise which helped a lot of people to grow their money. But should you be really investing in cryptocurrencies?
To help you out with this question, experts from crypto research platform TheMoneyMongers.com talk about various reasons why one should and shouldn’t invest in Cryptocurrencies. As a result, you will get a clear idea about the risks and profit of crypto investments.
So here we go:
Reasons To Invest In Cryptocurrencies
1. Ideal For Long Time Investments
Cryptocurrency is known for giving high returns in the long term, and this is what makes it one of the best investment options. As you already know that the crypto market is extremely volatile, and the price can go up or down.
But if you look at most cryptocurrencies, they are pretty beneficial in the long run. So if you have the patience and money to invest for a long-duration, putting your money in crypto can be the best decision.
However, the experts only suggest that you invest the money in crypto that you can afford to lose. Also, starting with a small amount is an excellent idea to prevent substantial financial losses.
2. Gives You Full Control Over Your Assets
Another thing about crypto is that it is based on a decentralized network. As a result, you get complete control over your assets without the involvement of a third party. The value of a digital coin is not determined by the exchange, middleman. But instead, it gives traders the liberty to avail maximum profits from the prevailing exchange rates.
3. Deflationary Assets
Unlike real world currencies, Bitcoins and many other cryptocurrencies have a limited supply. And this is what makes them deflationary assets.
This means the purchasing power of a cryptocurrency would increase over a period of time. Also, many cryptocurrencies have an algorithm that puts a cap on their total supply.
But yes, some cryptocurrencies don’t have any limitations on the supply, and investing in such coins isn’t advised.
4. Future of Crypto
The future of cryptocurrency is also pretty bright, and this is one of the main reasons why one should invest in it. Every now and then, there are advancements happening in the world of crypto.
Even most companies are starting to think of how they can implement crypto in their business. Even some companies are already implementing crypto in their projects.
Another cool part of crypto is that it will never get out of date. Instead, it is continuously updated, and the latest technological developments are happening about it. For instance, the world of talking about NFT, the DeFi platform, Web3 apps, and more.
Reasons Not To Invest In Cryptocurrencies
1. Extreme Volatility
It is extremely risky to invest in cryptocurrencies because of the volatile nature of the crypto market. Also, there are no regulations. As a result, no one can control how the market will behave or what would be the prices of cryptocurrencies.
So in case the market falls there, won’t be anything to stop the market crash as the stock market has. As a result, it will lead you to financial losses.
2. It’s Not a Commodity Or Currency
There is no right information about whether cryptocurrency is a currency or a commodity. As you know, metals like silver or gold are considered a commodity. But on the other hand, cryptocurrencies are not available in physical form. As a result, you cannot own it physically, which prevents it from being a commodity.
Also, if you look at it from the currency point of view, then there is no government regulating it. So it cannot be called a currency either.
3. Legality Issues
Bitcoin or any other cryptocurrencies is often considered illegal. As there is no government or institutions backing it up, the cryptocurrency lacks proper legality. There are many countries that have put a ban on crypto or planning to.
Even if any country made crypto legal, there are very strict rules and regulations about it. However, in today’s time, the legality issue is getting sorted out. Since more and more countries are talking about or planning to legalize it.
But yes, as of now, crypto doesn’t have any proper regulations in most counties. And if you put your money in it and the government bans it, you will find a hard time cashing out your investments.
Conclusion
So those were a few reasons why you should and shouldn’t invest in Cryptocurrencies. The above information shared is not financial advice. So make sure to do your research before you invest in crypto or any other digital assets.