It is easy to look at the money which so many people have made from crypto and kick yourself for not getting in sooner. The reality however is that this simply may not be the market for you. Crypto investment is not for everyone, despite the potential profits which are out there and today we are going to discuss exactly why this is the case. Experts likehave warned of the dangers which exist for first time investors, and losing money could be just as easy as making it.
Here is why this may not be the market for you.
There is no doubt about the fact that this is the most volatile market in all of finance, and this is one of the key reasons why it may not be for you. Watching your portfolio swing by up to 25% in a single day, and then hike up 30% in the days afterwards can be a heart-stopping ride which many aren’t willing to take. This doesn’t sound too bad when we talk in percentage terms, but if you have a portfolio worth $25,000 which then rises to $45,000, before falling back to $20,000, we are talking big bucks which you could be making or losing. If you don’t have the stomach for it, this isn’t the place for you.
Those who do have a good understanding about the crypto space also understand the potential security threats which exist. There are more ways than ever before to secure your investments however, but you have to know about and understand them. If you are not au fait with computing then these kinds of steps may be something which are foreign to you. If they are, you could well be open to exposure and the potential loss of your crypto holdings. Remember that this is a decentralized system which means that there is no support in place from banks or institutions if things go wrong.
Failure To Understand
The biggest group of people who have lost money on crypto are those who invested without truly understanding the nature of the market or the businesses and projects operating within it. This was clearly evident with Dogecoin, a coin attached to a meme of a dog, which had no project or reasons for investment behind it. The price was pumped owing to the support of a Reddit group and celebrities like Elon Musk. This is all well and good but eventually that price will dump hard and it will leave people without their investment. If you simply do not understand blockchain technology or how these projects operate, this is not going to be a fruitful space for you to invest in. Be sure that you really understand this before you get started.
Crypto can prove to be a great place to invest, but remember that it just isn’t for everyone and if you have any doubts at all, try looking into a safer market like real estate.