Understandably there are many of you who are looking to add cryptocurrency to your portfolio. Let’s be honest, anyone who wishes to invest money should be blown away by what we have already seen in the crypto landscape over the last 6 months. Experts in the industry like Robert Testagrossa are not trying to dissuade people from investing, but they are recommending that people be careful when they do decide to invest in cryptocurrency. There are many challenges when you invest in this particular market and here are just a few of the reasons why caution is always recommended.
Within cryptocurrency there are many strong coins which you can invest in, but these may not always provide the best, or the fastest upside. Those which can are often referred to as alt coins, which are smaller projects, at lower prices, which can appreciate at a much faster rate. There are however many alt coins which can also plummet quickly in value, and never recover, and this is one area in particular where you will have to be careful.
Whilst the fact that these currencies are decentralized is one of the biggest benefits of crypt, this also means that the security of your investments is very much on your shoulders. There are many security risks in holding crypto such as risks of a hack, or even risks of losing access to your account. For example if you send your crypto from one address of yours to another, and you get even one digit wrong, you could easily be looking at the fact that your crypto has gone to the account of another, and there is no getting it back. Wallets should be secured and any dealings should be triple checked before you hit send.
FOMO is big when it comes to crypto and sadly this often results in many people losing their money. When the price shoots up people think that it is their last chance to get the low price so they invest when they shouldn’t. Equally when the price plummets we see people panic sell, and then end up losing money this way too. In a market as volatile as the crypto market is, you cannot afford to have loose hands, and it is imperative that you have a good understanding of what you are doing in the long term.
Sadly there are just too many people who take the words of others as solid, and they invest in crypto coins as a result. It is critical that no matter what you are investing in, that you understand what you are buying and why. Don’t take the advice of people on social media as many do, make sure that you have done your research and that you are committed to what you are buying.
These are just some of the risks out there, and why you have to be careful when investing in these coins.