What You Should Know About Investing In Cryptocurrency?
Nowadays, digital money is the in-thing. This virtual money is not dependent on any government or organization. Since it is not under any government rule, solely the public establishes its value. You can say that they are valued at as much as the public wants. They are quite a rage and have proven their worth of a huge investment option. So, if you have been thinking about investing in cryptocurrency, there are some things you need to ponder over before you jump the gun.
When people start investing, the prices of all cryptocurrencies will touch the sky giving good returns to the early bird investors.
But we need to understand that cryptocurrencies are not mundane investment options. They are highly risky and if the amount you invested in goes for a toss, you should not be badly affected.
Which cryptocurrency should one invest in?
Till a couple of years back, there was only Bitcoin. Of late, there are others called as Altcoins. Because of the rise of these altcoins, the cryptocurrency market has come down from 90% to 40%. Although bitcoin is a preferred option for any portfolio, there are others like Etherium, Ripple, Litecoin, etc. that can be considered as good investments.
Compare the prices of various cryptocurrencies and proceed accordingly.
Let’s start with Bitcoin first. If you are a person who is interested only in investing but not storing, you can make use of the investment vehicles such as XBT tracker, Bitcoin ETI
and others. Here, you are allowed to bet on the price of bitcoin but without buying it.
For people wanting to buy real bitcoins, there are specific exchanges. You need to open an account at any of these exchanges, authenticate your identity and put funds in your account by paper money.
For buying altcoins, you have to register yourself at some altcoin exchange, authenticate yourself and put some money in the account. There is Kraken in Europe, Coinbase in The United States and OKCoin in Asia that will help with buying altcoins.
Weigh the pros and cons
Investing in cryptocurrency is a big hit because there are some advantages associated with it. But as usual, it has its set of disadvantages too. Read on to know.
- It offers good protection against financial instability: In countries whose economy is hitting a low globally, cryptocurrency safeguards your finances from unpredictable currency.
- No taxes on the profits: Since there is no control of any governing body, taxes cannot be levied on this currency when its value goes up.
- The anonymous factor: All the transaction details are encoded so the buyers or1 sellers are not revealed at any cost.
- Global access: Cryptocurrencies are not limited to one state or country. They have a global reach and access.
It is equally important to note the risks involved when you are investing in cryptocurrency :
- Fluctuations: There are a lot of highs and lows in the journey of bitcoins and altcoins. The worth of a coin can fall down as much as 20% within a span of hours.
- Vulnerability: These coins thrive in the digital world. So they are very much vulnerable to hacking and theft. Since there is no insurance cover, once lost you will never get it back.
- Easy way for cyber crimes: The anonymity factor encourages illegal trade practices. It is used all over for illegitimate transfer of money.
We really don’t know what lies ahead. But this virtual money may benefit you as of now. Chalk out a plan for investing in cryptocurrency and hopefully you will good returns.