You may have friends investing in cryptocurrency, and you’ve heard all about how much potential there is in this kind of investment. While there is a large amount of opportunity in the world of cryptocurrency, there are also things to keep an eye out for. Before you jump right in, here’s what you need to know.
Investing in Cryptocurrency | Before You Proceed
In this article:
- Is it an Investment or a Ponzi Scheme?
- Is it an Investment?
- What are Other Ways to Earn Bitcoin?
- Is Digital Currency Here to Stay?
- Takeaways on Cryptocurrencies
Is it an Investment or a Ponzi Scheme?
There’s a saying, “Money won is sweeter than money earned“. Everyone dreams of growing their money in the best way possible — through investing. However, there’s another saying “If something is too good to be true, it probably is.” Every opportunity comes with some level of risk, which is why it’s so important to distinguish a legitimate investment from a Ponzi scheme.
It’s easy to be blinded by deceitful organizations disguised as investment firms. Especially when those “firms” are offering attractive returns in a short period of time. Since Bitcoin is a new concept, some people have the misconception that it is a scheme.
Ponzi schemes are dependent on the influx of new investors to sustain old investors and keep the scheme alive. Bitcoin, however, is a totally independent monetary system which can stand on its own legs and does not give payouts to any Bitcoin holders.
Is it an Investment?
The value of Bitcoin can increase rapidly. It is no surprise why many want to earn money through Bitcoin. Although that may be rewarding, one should also be wary of the digital currency’s volatility to avoid potential losses. Also, if someone is selling an investment without any license or proof, it should raise a red flag. Bitcoin, meanwhile, is not sold but instead, paper money is exchanged according to the cryptocurrency’s value at the time of the exchange. The only way Bitcoin may seem like an investment is due to its rapidly-changing value, with owners hoping to sell for a higher price.
What are Other Ways to Earn Bitcoin?
With the increasing number of freelance jobs available online, methods of paying freelancers have also diversified. For those interested in jobs that pay in Bitcoin, visit Coinality or a subreddit page like Jobs4Bitcoins. The jobs available over at Coinality vary from copywriting to cryptocurrency engineering.
Like trading in the stock market, Bitcoin trading could prove to be a high-risk, high-reward investment option, especially if one lacks the knowledge in the field. First and foremost, remember not to invest more than you can afford to lose.
Is Digital Currency Here to Stay?
Given the volatility of the traditional investment instruments at the moment, it may no longer come as a surprise if investors put their money on these unorthodox financial assets. Furthermore, the price appreciation of digital currencies is twice better than the stock and Forex markets. On one hand, analysts predict once the global economy stabilizes, investors may begin pulling out their money from cryptocurrencies, which will result in a decline in value. On another hand, Bitcoin analysts foresee Bitcoin increasing by as much as $100,000 after 10 years.
Takeaways on Cryptocurrencies
If you are an aspiring investor, do your research and check out the possibilities, but also the risks that come with investing in cryptocurrency. Visit Coindesk to check the updated prices of both Bitcoin and Ethereum. This resource also provides the latest news and updates for both digital currencies.
Watch this helpful guide if you want to learn more about investing in cryptocurrency:\
With all these in mind, one can embark the journey of investing through Bitcoin or other cryptocurrencies. For those planning to give it a try, it is always recommended to seek advice and know your individual risk tolerance.
Do you think cryptocurrency is here to stay? Share your thoughts in the comments below.