You should be aware of a few things before saying goodbye to your dollars and welcome to Bitcoin, Ether, or Doge.
1. Cryptocurrency is unstable.
It’s true that its value fluctuates greatly, reaching quite high before rapidly declining again, and you never truly know what you’ll receive each day.
Cryptocurrency values experience sharp ups and downs. It’s undeniable that certain people are really popular right now, but for how long?
2. Cryptocurrency has lots of unknowns.
The functioning of cryptocurrencies still need a lot of work. Consider this: Even the creator of Bitcoin remains unknown! Only a tiny portion of the world’s population really comprehends and is familiar with the workings of the system. You are weak when you are ignorant.
3. Cryptocurrency makes fraud easier.
It just takes five minutes online to realize that not everyone is looking out for your interests. Scammers will do everything to get access to your passwords and personal information, even your bank account.
And what’s this? Targeting individuals like you is made much simpler for them by cryptocurrency. In fact, since October 2020, about 7,000 consumers have reported losses totaling more than $80 million due to cryptocurrency frauds, according to the Federal Trade Commission (FTC). 3
4. Cryptocurrencies have an unproven rate of return.
Cryptocurrency trading resembles gambling in certain ways. There is no pattern to the rise and fall of its value since it is traded person to person without any meaningful rules. In contrast to growth stock mutual funds, you cannot forecast changes or compute returns. Simply put, there isn’t enough information or authority to construct a long-term investment strategy on cryptocurrencies. Your financial future is not a game you should play here.
Should I Make a Cryptocurrency Investment?
Simply put, investing in cryptocurrencies is not a wise method to accumulate money for the future. Now, we’re not predicting the demise of cryptocurrencies. We’re not saying it’s awful, either. However, we claim that cryptocurrency has no track record of generating wealth.
Do not succumb to a trend simply because it has received a lot of publicity. Don’t put it all on the line and jeopardize your financial future, your retirement plans, and the welfare of your family by investing in cryptocurrencies. We’ve spoken to folks who have taken out a mortgage or cashed out their whole 401(k) early. Don’t invest in something as fragile as cryptocurrency if you can’t afford to lose the money.