A lot of people these days may have heard of Bitcoin and cryptocurrencies. In 2008, Bitcoin was designed to avoid problems such as the economic crisis. The goal is to have a cryptocurrency that isn’t tied to any economy. It operates using the blockchain. What it does is that there is a public ledger of all transactions that transpired all throughout its history. And also, Bitcoin is finite. There will only be 21 million bitcoins. And the reason behind this is that it will create demand from miners.
In 2017, we’ve seen the rise of Bitcoin along with other cryptocurrencies. Bitcoin was able to hit near $20K by mid-December of that year. It is considered the all-time high of Bitcoin. In addition to this, there were also other cryptocurrencies that emerged. Ethereum, XRP, and Litecoin are among the altcoins that also became popular. Now, should you be investing in cryptocurrencies? Here are some things that you have to consider.
Regulatory clarity has been a problem in the crypto industry after 2017. Regulators were concerned about the possible role of cryptocurrencies in money laundering and even in tax evasion. Also, there are those concerned regarding the possible price manipulation. You can buy most things online with cryptos now including mobility scooters.
And the US Securities and Exchange Commission has raised concerns regarding the lack of surveillance tools used by crypto exchanges. Now, if you are risky, then you might invest in cryptos. By the time that there is regulatory clarity, it is possible that cryptos are going to go back up. The good news is that there are institutions that are now looking to take advantage of the technology. Even JP Morgan developed its own stable coin that runs on the blockchain technology.
Now, is cryptocurrencies secured? There have been a number of hacks that happened throughout the years. Some may have lost hundreds of millions worth of cryptocurrencies. However, if you are really wise on how you take care of your cryptocurrencies, it can be secured. You can make use of cold storage in order to hide your cryptocurrencies.
Fluctuation of price
It is volatile. it is something that you should know from the very beginning. Imagine losing 80% of the value of Bitcoin in just a matter of 12 months? Nowadays, if you don’t have a decent risk tolerance, then you shouldn’t be going for cryptocurrencies in the first place. However, if you are someone who believes in the technology so much that you want your skin in the game, then this is something that you should go for.
Thousands of options
There are thousands of cryptocurrencies out there. Unfortunately, a lot of these cryptocurrencies are actually just a scam. Unfortunately, there is someone who is getting rich while you wait for your chance to actually get a piece of the cake. What you have to do is to take a closer look at the technology itself. Does it offer something that is new? For instance, Ripple’s XRP is now being used by banks and other institutions for cross-border transactions. And this is the reason why it has been able to surpass Ethereum in terms of market capitalization.