Know more about your crypto Investments

Cryptocurrency investment is a relatively new frontier in the money markets. Millennials and technology nerds have been in the frontline of amplifying digital currencies. They may not have as much information about them but they evoke interests among the population.

Money and investment chasers will always pay attention to cryptocurrency. As opposed to the traditional money that primarily act as an exchange for value, cryptocurrencies are a store of value. Being a store of value, crypto can be traded like stock and people who do intelligent investment in them rake in a lot of income from it.

What you need to now before investing in Cryptocurrency

There is this euphoria about investing in cryptocurrency. So many people are genuinely and honestly chasing the millions of profits that crypto promises to offer. Just not to get me wrong, people are making crazy margins out there from their investments in crypto. But before you take that innocent move, lets know the angels and devils of the game. of course, the others will come along the investment journey

Know the following about crypto before you invest in crypto

1.    Crypto currency is highly volatile

As is known to many, cryptocurrency trading depends on the forces of its supply and demand. All cryptocurrencies have a set limit for minting. This set limits can be seen in Bitcoin halving. However, their demand continues growing. These factors largely influence their value in the market.

In any ordinary year, any cryptocurrency experiences a series of rises and falls in value. In fact, in just a single day, a crypto currency may experience a fall and rise even second or minute. No wonder, traders in cryptocurrency will keep their computers on to monitor the graphs every time. A second can earn you an incredibly high margin or can see your millions go down the drain.

Your choice to invest in crypto must therefore reflect whether personally risking on the instability is your thing. That is an individual decision which must be well informed. You invest and do not stop at that-there is much more work to do in monitoring trends in the performance of your crypto investment.

You have to be careful enough to know when it’s time to sell or buy your crypto. Proper timing of response to crypto price instability will earn you great margins yet doing it the wrong way may just plunge you into  the deeps of financial ebb.

2.    So many unknowns about cryptocurrency

Not so much information is already available about cryptocurrency at the moment. Even the people who made early investments in Bitcoins did not know a lot about it but still they took a risk. So much information is just coming up and people try to make head and tail out of the need to embrace the use of cryptocurrencies sin new life. There are a lot of speculations, truths, falsehoods and half-truths are all over the air.

Once you make a decision to invest in cryptocurrency, the real work just begins. You can not afford to just sit back and be lazy hoping that the profits will just flow. No way. You have to keep reading trends, being aware about whatever new  is happening in the crypto news every day.

Remember, a political or economic decision made somewhere in the world will affect the value of your crypto, sometimes over a very long period of time. Remember, no local government regulates the performance of your crypto so you are basically a direct part of the global financial players. Whatever affects Russia or Ukraine for example will spill over your crypto investment in a matter of seconds.

3.    Risk of high impact fraud

Cryptocurrencies are traded on a blockchain which means that one only needs to crack into that chain and commit fraud. As much as crypto technology and its entire building block is hailed as the greatest FinTech of our time, the same brains that create it can infiltrate it maliciously. Just like when computers arrived and software development started taking shape, some people went around and started investing in spam ware and viruses. It’s crazy to imagine this but why would you think its completely an impossibility?

In the event that fraudsters penetrate the blockchain technology even for a second, the losses can be immense. Already, Bitcoin has had cases where investors lost money to the tune of millions of dollars. So deciding to use crypto as a way to financial freedom may just not be guaranteed yet.

4.    Crypto trading is a gamble

Trading in cryptocurrency is a typical gamble with no specific projected incomes. All you do as an investor is stake your money, adjust a few metrics on the trading board and keep looking at the way various things play out. In a good day when the stars align in your favor, profits flow in from your crypto investments. On a bad day when the crypto takes a consistent nosedive, you will have to cry your way out of the bank-sorry but that is just it.

Investing in cryptocurrency exposes you to international level risks. And remember, the broader the risks, the higher chances of great loss or great returns. As an investor in crypto, you are no better than someone who bets or plays casino. It’s only that your gamble looks a little different.

Cryptocurrency investment

The investment in cryptocurrency just like any other investment is intended to generate the investor profit. It is the profit margins that attract people to risk big for the motivation is always to risk big and earn big.

Because the cryptocurrencies are not regulated by any fiat agency such as government or banking institution, their value is all out there for traders to determine. The value of cryptocurrency only relies on whatever people are willing to pay for them at any one time.

Ways of earning from cryptocurrency investment

People get the interest to invest in cryptocurrency and would not be slow in putting their money to it when convinced of its profitability. Of course that is where we come in to provide that much needed extra information that makes a case for investing in crypto. As a baseline, it is very much necessary to avoid being motivated to try investing in crypto just for the money part of it. It’s good to take time and learn the main things first.

The initial motivation for cryptocurrency creation , specifically bitcoin was to be a replacement for traditional money. It means that  crypto should be able to do whatever traditional paper and metal money can do like buying your coffee, paying your rent, sending gifts et cetera. However, disappointingly, crypto has been largely embraced as an investment.

Uses of cryptocurrency today

Cryptocurrencies today draws its growing  popularity to the investment possibilities in them. Actually, the creators of cryptocurrencies in their own thinking believed that the crypto could replace traditional currencies, technically known as fiat currency. The only new feature the crypto were supposed to do is overcome barriers of being regulated by a central agency such as governments or central banks. However, this initial goal has not been so far significantly achieved.

Cryptocurrency investment is its most known use. However, countries and businesses continue to slowly embrace it as any other currency. An example of  where crypto has taken  root as any other currency is in El Salvador. The country now accepts and recognizes Bitcoin as a currency in its economy. Major retailers  globally also continue to accept the use of cryptocurrency as means of payment. An example of such companies include Whole Foods, Nordstrom, Etsy, Expedia and PayPal.