Have an innate sense of distrust for the mainstream banking system? Cryptocurrency could be what you’ve been seeking as a replacement for traditional financial transactions. This is a digital currency created through high-tech encryption techniques called cryptography. While it used to only be a theory, it came to fruition in 2009 with the advent of Bitcoin. The original and most prevalent of this kind of currency, Bitcoin seems to set the standard for how this alternative will fare in the near and distant future. This is still true despite the fact that other cryptocurrencies have emerged and enjoyed some success. As Bitcoin is what everyone looks to for measuring success in this area, the future is tenuous at best. As this Investopedia.com article notes, “Bitcoin sported a market value of over $2 billion at its peak, but a 50% plunge shortly thereafter sparked a raging debate about the future of cryptocurrencies in general and Bitcoin in particular.” It’s not an easy decision to make and, with prices on the rise, you might be wondering whether to invest in cryptocurrency now. Read on for some thoughts on this decision.
First and foremost, you need to be okay with the overall tenets of investing, which means that you could lose the entire investment at any given time. That’s just the nature of the beast with cryptocurrencies and traditional investments. There is a slightly higher risk with something like Bitcoin. Although it is free from government manipulation, there is also no overarching authority to monitor or back the Bitcoin value. It also has no intrinsic value other than what a buyer is amenable to paying for it at that time. Because of this, it’s prone to volatile price swings. As that same Investopedia article points out, supporters are fond of its limited supply and growing popularity while detractors think this is not an investment to make if you want to err on the side of being conservative.
If you are willing to ride the wave, investing in cryptocurrency might not only be a good idea but you’ll likely have fun in doing so. As you’ve likely noticed in your recent Facebook news feed, Bitcoin has been in the media for making a significant comeback after a pre-Christmas dip. Again, though, despite this late recovery, Bitcoin still had its worst week since 2013. Its only consistency is its ability to be inconsistent. As this article by theguardian.com notes, “Singapore’s central bank warned last week against investment in cryptocurrencies, saying it considered the recent surge in prices to be driven by speculation and that the risk of a sharp fall in prices was high.”
Another consideration when deciding whether to invest in cryptocurrencies is whether you have the time and energy to dedicate into actually doing so. It’s not your typical transaction such as with traditional bank-fueled investments. Don’t worry, though. If you are new to this, there are many guides out there to show you how to buy cryptocurrency.” When it comes to acquiring cryptocurrencies, you can do exchanges, work for Bitcoin, use Crypto ATMs, buy them in certain stores, use Paxful, purchase from a friend, or cash out your gambling account. Interestingly enough, many sportsbooks, poker rooms, and casinos accept Bitcoin, Litecoin, and other cryptocurrencies for the ease of deposits and withdrawals. If you’ve found yourself with a few hundred extra dollars sitting in your sports betting account, opting to withdraw it in Bitcoin could save you some money.
Another area you’d have to become knowledgeable in would be the methods for storing your cryptocurrency. The best way to do this would be using a wallet from your app store. Coinbase is one of the most popular wallets for Bitcoin. Ultimately, Bitcoin is stored online through your smartphone or computer. Using an app is ideal, as it allows you to access your Bitcoin account as well as to buy and sell more from here. You can also spend it with merchants who accept cryptocurrencies and view charts on your currency’s performance. This last function makes the app dual purpose for both storage and investment.
We hate to state the obvious, but the decision is ultimately up to you. If you are taking cues from Bitcoin’s roller coaster ride of successes and failures, you’re probably thinking of investing your money elsewhere. However, Litecoin, Ripple, MintChip, and other cryptocurrencies are still being formed in the face of this volatile market. It seems that those in the know don’t think cryptocurrencies are going away any time soon. Evaluate your confidence in this investment and your willingness to stick out the ups and downs (or not), and you should have your answer.