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Is it worth investing in cryptocurrency?


Recently, the cryptocurrency market is gaining particular popularity. That is why its total capitalization has increased many times over.

At the same time, many call cryptocurrencies a financial bubble. How substantiated are such statements? and is it possible to really make money on cryptocurrencies in the long run? Let’s understand all the pros and cons of this investment tool.

What caused the growth of bitcoin?

First of all, the popularity of this topic. Just because of the fact that so much was said about bitcoin, there was such a rapid rise. This fueled demand even more. After a while, it became so large that it became impossible to maintain it. This led to his downfall. The value of any financial asset directly depends on how much people trust it. And it turned out to be a funny situation: there were no people left who would like to buy even such a growing asset, so expensive. As a result, the cost of bitcoin fell three times, but this did not stop those investors who saw this fact as an opportunity to buy it very cheaply. Consequently, the price went up again.

This inspired some traders with optimism, so the demand increased again.

This is a very simplified model that does not describe all the nuances, but gives an opportunity to understand why cryptocurrencies are so volatile, that is, changeable.

Is it worth investing in cryptocurrency?

In general, the answer is more positive than negative, but one must take into account the high risks of such investments. Therefore, in no case should you invest the last money in cryptocurrency, as it has become fashionable. Aggressive financial instruments can occupy only a part of the investment portfolio. As the saying goes, don’t put all your eggs in one basket.

In more detail, let’s look at all the pros and cons of this asset.

Benefits of investing in cryptocurrency:

1 High yield. If you buy bitcoin on the Cryptex exchange, when the price is the lowest, you can earn a lot. The main thing is to determine the moments when it is most profitable to enter and exit the market, as well as learn to wait. In no case should you try to get all the profit right now. This is a sure way to lose everything.2. A large number of ways to purchase cryptocurrency. Unlike classical financial instruments such as stocks, bonds, futures and others, cryptocurrencies can be bought with both fiat money and other cryptocurrencies. This greatly increases the scope for speculation.

3 Low entry threshold point in order to enter the cryptocurrency market, just a few hundred dollars are enough.

4 Ultra-high volatility. The cost of a cryptocurrency can grow several times in just a few days, but it can also fall in the same way. Therefore, this plus has a negative side.

That is, volatility is at the same time the main disadvantage of cryptocurrencies. But there are some more:

  1. Unpredictability. Even those people who have become millionaires thanks to cryptocurrencies do not risk making any forecasts for this asset.
  2. Lack of regulation. On the one hand, this is a plus. Thanks to this, it turns out to make transactions as anonymous as possible. On the other hand, the absence of a regulator increases the degree of riskiness of transactions.

Thus, only the person himself can understand whether he should invest in Bitcoin and other cryptocurrencies, after carefully weighing all the risks. it is not such a simple financial instrument as it might seem at first glance. There will be no freebies for sure.

Post source: kiyosaki-fanclub.ru

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