Here’s why you shouldn’t rush straight into cryptocurrency investments
Anyone that’s even thought about making investments in recent times will have looked at cryptocurrency. After all, it has been almost impossible to escape the stories of Bitcoin, Ethereum et al. Unfortunately, that doesn’t mean that you should jump straight into the deep end.
As with any investment opportunity, weighing up the pros and cons is crucial. You’ve probably read loads about the possibilities. Without wanting to discourage you from it, here are some of the potential negatives that need to be considered.
Your capital is at risk
As with most investments, your money is potentially at risk. However, there’s no doubt that those dangers are even greater when looking at the volatile world of cryptocurrency. While this does make it exciting, a lot of investors would rather choose the steady but less risky route to success. Real estate is probably the most popular option, but there are a variety of potential solutions out there. If you’re not ready for the emotional rollercoaster, avoiding cryptocurrencies is for the best.
Investments aren’t the No.1 priority
The thought of growing your personal wealth through the use of smart investments appeals to everyone. Nonetheless, it’s imperative that you learn to live in the real world too. Investments are a luxury. If you’ve had financial issues, debt counselling and expense management should be the priorities. Likewise, paying the bills and securing your short-term stability needs to come before the investment plans. Comparing your situation to others is never the answer.
Taxes are one of the three certainties in life, and investors should know that cryptocurrency isn’t exempt from taxes. At least not for American investors. So, in addition to being a risky investment in the sense that you could lose everything, you’ll need to yield good ROIs before seeing any real difference. Moreover, the impacts on your career earnings and investment portfolio can be telling. Keeping an eye on this factor is advised.
Hard to forecast
Can the experts make calculated predictions about where cryptocurrencies are heading? Of course. Are those forecasts accurate? Probably not. This is the most volatile sector of all, with commodities able to grow by 1000% in a year or lose everything in one day. If your ROIs are little more than a bonus, that’s fine. If, however, you want some structure for future retirement or other plans, you may wish to look elsewhere.
Scammers are preying
Cryptocurrency has made lots of headlines, which has won over a lot of casual investors. This lack of experience makes the arena a wonderful playground for scammers to strike. There are a variety of crypto scams that you should know about. From simple hacks to sophisticated acts, the fallout can be catastrophic. Even if you’re an experienced trader making the switch to this arena, it’s better to be safe than sorry.
Make no mistake; the cryptocurrency arena is the most exciting investment opportunity by far. The thousands of success stories prove that there is money to be made from this environment too. However, there’s no such thing as a free ride in this world. For this to be your golden ticket, a little luck and a lot of hard work will be essential.
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