Unless you live in the most remote part of the globe, there’s a big chance you’re familiar with the growing fuss surrounding cryptocurrency over the past few years. Perhaps you’ve even considered trading or investing in crypto, but you’re not exactly sure where or not to take the dive, let alone when you should do so, or which currencies you should target.
Well, the latter is not unexpected, considering the many different types of currencies in the crypto market. This then begs the question, are some cryptocurrencies riskier than others? Stick around to find out.
What are Cryptocurrencies?
In the simplest language possible, Cryptocurrencies are a form of currency that’s purely digital. Could this explain why crypto was ranked among the best-performing assets of 2020 amid Covid-9?
Who knows! Well, as the name would suggest, cryptography is used to verify transactions and keep records associated with those transactions. As opposed to transactions involving standard currencies, crypto transactions take place through a decentralized system, meaning that national banks and governments have little control over how much you can hold, trade, or transact using cryptocurrency.
Popular Types of Cryptocurrencies
If you are like most people, it is not uncommon to think about Bitcoin or Ethereum whenever the word crypto is mentioned. But did you know that there are more than 19,000 currencies in the crypto market besides these two giants – some of which are thought to be headed for a downfall? In case you didn’t, some popular options you should know and explore include:
- US Dollar Coin (USDC)
- Binance Coin
Investing in Cryptocurrencies
Just like with any other type of currency, buying and selling are one of the best ways to invest in crypto. Likewise, your profits will largely depend on the kind of currency you choose, its performance, where you buy it, and where you sell it.
And to be honest, we live in an age and day where buying crypto is as easy as a few clicks or taps on your computer or mobile device. In other words, investing wisely in crypto might just cost you a little time and effort in finding the right software, mobile app, or website to help you multiply your money.
Benefits of Investing in Crypto
The decentralized system in crypto literally allows you to own all the wealth you can accumulate on the planet without anyone questioning it. And all thanks to the highly advanced blockchain technology, crypto transactions can be completely anonymous, thus minimizing unwanted attention from would-be scammers and fraudsters.
Better yet, there are thousands of cryptocurrencies to consider using or investing in as we speak, making crypto a highly versatile tool to spread your eggs and protect your wealth.
Some cryptocurrency prices might have been plummeting over the recent past, but that’s not to say there won’t be a giant bounce-back as far as history and statistics are concerned.
As many would argue, perhaps the biggest risk that cryptocurrency investors face is the immense volatility of these currencies, as well as their giant unpredictability.
This is perhaps largely because most people are relatively new to the concept but in all fairness, a certain amount of fairness is always expected when investing in any kind of currency… including trades involving traditional currencies.
Just like investing in certain traditional currencies, some cryptos are indeed riskier than others! So, if you’ve flexed your financial muscles and are ready to start investing in crypto, it pays to do some research beforehand about the currency you want to invest in, the broker or provider.
And how long you plan to keep your investment in the fridge before demanding returns you would call decent. Cryptocurrencies can sometimes be quite tempting so, don’t forget to put limits on how much you can invest without going above your budget.