Investing in cryptocurrency can be a good investment, but at the same time it can turn out to be a horrible idea. Investing, in general, is risky, and no type of investment can promise any type of easy rewards. Whether it is Forex, Stocks, or Cryptocurrency is always a big risk, and most likely someone will lose the money that they invest.
Cryptocurrency have seen a significant increase in the past couple of years, but also have seen some really disappointing crashes in the middle of all the rises. One thing is that they still managed to come back up strong.
In order to invest in Digital coins or any type of investment that an individual makes. From buying a physical business to simply buying and item and selling it for a profit. They always have to study, the product, and the market they are jumping in.
Someone can’t just jump into a water without the knowledge of it. Just because you swim in a pool does not mean your not in danger swimming in an ocean or a river.
Here are some pros and cons of cryptocurrency investment that you might want to consider
Low inflation: Blockchain systems have the advantage of being infinite. Meaning the Blockchain is immune to inflations and will not lose their value.
A wide variety of coin to choose from: The big coins are usually Bitcoin, Litecoin and Ethereum, but there are thousands of other coins that do not cost as much, and the rewards is similar. Bitcoin is usually a very high value coin. The more you put in, the more profit you will get back if it goes up, but you can also lose a huge portion of it.
Minimal trading value: The value of some stock can be up to $10,000 per stock. On the other hand, Bitcoin can be invested in any type of amount. An individual can put it as a little as $20 and still make a profit on it. It won’t be much, but a profit is a profit.
Price is not stable: Digital coins prices are very unstable moving up and down regularly. Talking from experience. The price can be nice to invest one day and drop a huge chunk the next one. It poses a huge risk in trading. Mostly if you are a day trader.
Online Hacking: Since the wallets are online for the most part. The risk of being hacked and losing them all is there. Hackers can move the coins from one wallet to another, and you will never see them again.
Decentralized: Decentralization can be good, but also can be a horrible thing for a user. They are not backed up by any institution, they do not have any type of insurance. Once the coins are lost, you are left with nothing.
Everything poses a risk online and in the real world. If you think the you think the risk is less than the rewards than you should not do it. Otherwise, go ahead and trade.
Study the Market
Studying the market and learning how the charts work, and how the digital currency works, in general, will give you a huge advantage in trading cryptocurrency.
Learning the tricks the big traders use in order to generate profits more often than loses plays a big factor in your trading skills. Signals given by charts can be a good start on when to enter and exit a trade.
Like I said before, do not go in blind into trading. Find out more about trading through books, or simply Google can be of help in your journey trading.
In conclusion, digital currency is worth trading the rewards can be big when you managed to get a profit from it. You can check out the weekly updates here. The risk to rewards factor is still high, but with the right knowledge I managed to cut that in half.