Know the potential risks before delving in. However, once you're in the market, theres a plethora of opportunities such as different mediums of exchange and millions in earnings.
Risks
There are many potential risks to investing in cryptocurrency however when done correctly, millions or even billions can be made. Risks that many people do not know about, causing immense losses throughout 2021 are its vulnerability to cyber-attacks. Crypto exchanges (where the money is stored) are not regulated by the government like NASDAQ to protect investors. Also, it is highly likely for blockchain projects to fail due to the many scams and new technology continuously developing.
Diversification
However, financial experts do recommend investing in alternate options like in the regulated new york stock exchange. Companies with exposure to cryptocurrencies such as Coinbase, Square, and Paypal are all also beneficial to start with less volatility. This facilitates crypto’s future trading, yet there is less upside potential as directly investing in cryptocurrency.
Best Coins for Early Investment
In terms of long-term investment, bitcoin is known for early investors achieving big rewards over the course of a long-term project in cryptocurrencies such as Bitcoin and Ethereum. Bitcoin is the most commonly owned cryptocurrency, known as “digital gold.” This coin is a fixed commodity, capped at 21 million coins where fiat money (dollars) is never-ending. This eliminates the possibility of depreciation. Another pro is the potential for Bitcoin to be the first global currency. Ethereum on the other hand supports cryptocurrencies by supporting the ecosystem of applications. The platform issues smart contracts with the potential to disrupt industries such as real estate and baking, increasing utility and value.
Levy, A. (2020, November 13). Is cryptocurrency a good investment? The Motley Fool. Retrieved January 11, 2022, from https://www.fool.com/investing/stock-market/market-sectors/financials/cryptocurrency-stocks/is-cryptocurrency-good-investment/