The cryptocurrency market has come a long way since the first coin, Bitcoin, was released in 2009. Over the past two years, it has seen a rapid rise in value and attracted unprecedented attraction. Though a highly volatile industry, new investors have shown an increased willingness to bet on it to grow their wealth quickly. Some have reaped amazing benefits too. Financial experts say cryptocurrencies, like most other investment tools, demand patience, and a long-term investment strategy. Still, even the smartest investor cannot wish away the risks associated with this new-age industry.
So, how useful is then the cryptocurrency industry as an investment avenue? Despite the risks, cryptocurrency can help you earn much more quickly than most other such tools. Here are a few points that can help in determining whether cryptocurrency is useful or not:
Before investing any money, read and update yourself about it and how it functions. A key area to focus on is exchanges, which facilitate crypto transactions. Most of the information needed for a potential investor will be available on the website of an exchange. But investors can also get in touch with those more experienced than them.
2. Own your money
Apart from being a long-term investment option, the cryptocurrency industry works on the principle of decentralisation, meaning they do not need the involvement of the government or any other entity. Investors keep direct control over their money.
3. Market hours
Unlike traditional stock markets, trading in these coins continues uninterrupted 24×7. There are no opening or closing hours. Investors are offered the flexibility to trade from anywhere and anytime.
While these things work in favour of cryptocurrency, there are some risks that need attention.
The biggest question lurking over this industry is it is unregulated. That is what allows investors to have direct control over their money also makes it vulnerable. Most cryptocurrencies are not backed by financial institutions. Though some countries have begun to adopt it and thus created some sort of a safety net.
5. New industry
The next problem is it is a relatively new industry. Not many people know about it and even less have invested in it. Most people are not that familiar with the terms or the technology used in this industry.