You might be hearing a lot about cryptocurrency and could be asking yourself if it is worth the investment. In fact, there is no definitive answer to this question, as crypto could be a good investment for one person, and a bad decision for another. In this article, we will explore all the aspects that could help you make up your mind on whether cryptocurrency is worth investing in or not.
When talking about market fluctuations, it is important to note that the long term fluctuations are what an investor is affected by, as the daily fluctuation rate is 1 or 2% (upward or downward).
However, the fluctuation of the crypto market is similar to the standard market but could be less predictable and might fluctuate in very high or very low frequencies in a period of time. These two examples will make it easier to understand.
Ether’s price in June 2019 was $335.10, and in mid-July, this number fell 40% to reach $205.86 in three weeks only.
Bitcoin was worth $3451.55 in early February 2019 and in 150 days reached $12, 647, 99. This means that the worth of Bitcoin became 3.6 times greater.
In his book “Confessions of a Crypto Millionaire” Dan Conway says: “crypto isn’t an investment, it’s a belief system”. This foundation is what can help you develop a tolerance level on the lows and highs of this market. In the same book, he describes his journey as a crypto investor saying that some days he was down $500,000 and others he could be up to $1M.
The following, are some rules that you can keep in mind to shape your decision about cryptocurrency. Remember, these are just tips and not advice from financial experts.
1. Educate yourself on the mater
Investment is only for the ones who spent enough time understanding the field. Use the internet and some platforms such as Reddit and Twitter where you can find information. Get to know and understand the related terms. It is important to know the culture, technology, and risks of the space where you are investing your treasure.
2. Pick the right coins
The cryptocurrency world is filled today with lots of coins as many people are pitching theirs, with exceptional optimism. Some could succeed, and most of them would fail, however, you cannot be sure which ones are also fake or stealing people’s money. Therefore, one of the recommended things to keep an eye on whenever you feel like investing in cryptocurrency, is buying the right coins!
3. Understand the Market Cap
Market Cap or Market capitalization changes based on the total number of coins in circulation. Know the circulation value of the coins you are investing in to avoid making silly mistakes.
4. Consider security
Given that your investment is happening on digital platforms, make sure that you choose the platform that shows high aspects of security. Make sure your choice of coins is based on the security characteristic as this can contribute to the winning or failure of your investment.