A recent survey has revealed that around 82 percent of institutional investors are eager to enhance their exposure to crypto as well as digital assets in general by 2023. On the other hand, crypto losses have spiked up by a jaw-dropping 695 percent in 2022. So, would it be a good thing to invest in crypto? Or rather, could crypto be considered a “good” investment? Now, there could not be a straightforward answer to it. When it comes to crypto, there are many layers to peel.
The post below offers a discussion on whether or not crypto could be considered as “good” investment.
What is meant by good investment?
When it comes to “good” investment, the first two things that come to mind are – high profits and safety.
Now, crypto poses an extremely volatile market and it comes with both advantages and risks. Investors who had invested in crypto when BTC was $100 are simply millionaires now. On the other hand, several people have encountered huge losses in the crypto zone. Here is a discussion on both the good parts as well as the risks associated with crypto investment.
Crypto has shown an inspiring growth ever since its inception in 2009. It’s no mean feat to be considered as potential replacement for fiat in coming years from being dubbed as “Wild West” in just over a decade. It’s not for nothing that most of the topmost corporations of the world have their investments in crypto. From industry leaders to celebrities, a long panel of elite figures is crypto champions today.
Bottom line is, crypto promises proliferating growth in the near future- one of the key aspects of choosing a powerful investment asset. Crypto is certainly a mighty investment asset. Defined by extremely high volatility, crypto also promises way higher returns than you could expect with traditional investment assets like stocks or bonds.
According to experts, the crypto market is predicted to scale up by 5x in the coming 10 years. If we have bank on market figures, by the final lap of 2022, the crypto industry is estimated to witness around 1 billion users. In fact, an esteemed bank has even declared that crypto might replace fiat money after a decade.
Put simply, crypto speaks of a power-packed investment journey where investors have the golden opportunity to enjoy stellar returns.
The crypto market is a highly unregulated sector. Lack of proper regulation has led to wild volatility in the market, resulting in extreme instability. Crypto prices can swing down and up in just a matter of a few days. Traditional trading markets fluctuate as well but the frequency is way higher when it comes to crypto. As a result, crypto investors are always at risk of higher scale of losses with crypto investments.
The other factor is the growing crime rate in the crypto zone. The opening paragraph has already mentioned a scary number about crypto crimes. What is even scarier is that the rate of crypto-related crime and fraudulent activities reached its peak in 2021. Almost all leading exchanges had to encounter hacking attacks and experience losses in millions and billions. On top of that, centralized exchanges don’t even allow fund transfer to 3rd party wallets – and these portals are the most susceptible to hacking attacks.
Then, all cryptos cannot be trusted equally. Some cryptos are based mostly on hype and they won’t be able to survive after 7-8 years. Worse, these same cryptos might initially make waves with frequently surging prices, creating the illusion that those will bring excellent returns on investment.
Should you invest in crypto?
Well, based on the discussion, there is probably nothing bluntly bad or good about crypto- however, it’s a highly promising investment asset though. The actual question is whether crypto would make “good investment” for “you”.
Now, for that, you have to answer a few questions-
- Do you consider yourself to be an adventurous investor?
- Do you hold a high risk appetite?
- Do you have spare money that won’t hurt your basic necessary and emergency expenses, dreams, ambition, and livelihood if you lose it?
- Are you ready to wait for some years for good returns?
- Are you a strategic investor who does not involve ego and emotion in investment activities?
If your answer is “yes” to all the questions mentioned above then free crypto could be a suitable investment for you. However, since crypto investment could pose serious risks, you should be careful about certain investment tips to ensure a reliable investment journey.
Tips for safe and successful crypto investment
We will wrap up this discussion with some pro tips on ensuring safe and profitable investment experience with cryptocurrency.
Be careful about the cryptos you choose for investment as not all cryptos can equally assure excellent returns. To be on the safe side, stick to blue-chip coins as they have proven their mettle over the years and are poised to rise up further in the coming years.
Crypto prices fluctuate up as well as down extremely frequently. If you have no time to keep a constant watch on the market, it’s better to go for HODLing. If you invest in a PoS crypto, you will further have the additional opportunity to put your idle holdings for staking to earn passive rewards.
Don’t just stick to one single crypto if you are aiming for a proliferating investment portfolio in the crypto zone. Added to legacy coins, you should also put money on new promising altcoins. Just make sure to get a thorough study on every coin or token you choose to invest in. A diversified portfolio will offer you the much needed backup from other coins when one coin takes a dip.
Be selective with the exchange
Your chosen exchange must offer a wide range of cryptos to choose for investment as per your investment goals. Moreover, the exchange must follow all cutting-edge safety protocols needed to ensure optimum protection for user funds.
Use external wallet
Do not ever keep the maximum holdings in an exchange wallet. Always use an external cold wallet for the safest storage of funds.