Advantages And Risks Of Investing In Cryptocurrencies


The way money is being transacted is changing especially due to digital technology. It has introduced new means of payment without the need for negotiating with real money or the need for a bank reports a leading Crypto Capital Newsletter. That is made possible due to cryptocurrencies like Bitcoin and other altcoins, read to know more. Though they are a great investment tool which can give you tremendous returns, there is risk involved in it due to its volatility in the market. Though there are risks involved many leading financial institutions are looking at investing in this domain. As an investor cryptocurrency is an investment that is worth looking into after weighing the pros and cons involved in putting your money.

Advantages of investing in cryptocurrency:

Good returns: The reason many investors are enthusiastic about investing in cryptocurrencies is due to the high returns and the rising value of bitcoins. As per previous statistics if you had invested $1000 in Bitcoin in 2013 it is worth $400000 today. In spite of the high risk and volatility people are ready to invest in bitcoins because of the high returns in a short period.
There are many other initial currency offerings or ICO’s that are producing high returns in a short time.

They are portable: Since cryptocurrencies are decentralized and there is no government control you can carry currency worth millions in a memory card. The same cannot be said about other forms of money. For example, if you have to move money worth millions to another country through fiat currency there are many regulations in place, and hence you will not be able to carry that amount. Carrying cash is also risky for these reasons people prefer cryptocurrencies like Bitcoin, Ripple, etc.
Another advantage is that the transactions cannot be tracked, once the money is received all the details regarding the payment is cleared and there is no trace of the fund source.

Reliable as a savings option: Fiat currencies can experience fluctuations due to various reasons and can affect the savings that you have accumulated in traditional banks and financial institutions, but when you invest the same in cryptos they will stay as a suitable means of saving investment. Moreover, you can also earn interest on the currency you have parked as saving which will add more value to your investment.

Risks of investing in cryptocurrencies
Volatile: Investing on cryptos is risky as the market is more volatile than stocks or real estate. Also, there have been incidents of security breaches and hacking and causing losses to investors. There have also been instances of a dip in the value of many ICO’s.

Network issues: Any cryptocurrency value will increase only when a significant number of users use it. If the network is faulty, is not accepted by the users, is not properly utilized by the consumers then there will be a drop in its value, so when you are investing look for a platform whose network is useful. Also if the cryptocurrency is unable to raise enough money, they will not be able to operate, and they will have to close down the network and then the demand for the currency drops.