Before we even get started on the post, if you have zero knowledge about cryptocurrencies or purely need a refresher, watch the video link below:
Two Sides of the Coin
There are always 2 sides to a coin – those who are For cryptocurrencies and those who are against them; same to Stocks or Gold or Forex.
On 1 front, people who have made massive gains are probably all in favour of the adoption of crypto-currencies. Several benefits include
- Low costs due to decentralized peer-to-peer transfer,
- New market & technology which signifies a lot more room for growth.
- Increased usage throughout the world (Starbucks and Mcdonalds are the pioneer supporters)
On the other hand, many are still skeptical about this birth of ‘cryptocurrencies’. They call it a bubble and that many alt-coins look like the now de-funct websites that emerged during the dot-com bubble. Other than the cap of supply, there is no real value of the cryptocurrencies.
Bitcoin is worth this much because another person thinks that it is worth that price. In an extreme scenario, Bitcoin can go all the way to a dollar and there is still nothing wrong with that fundamentally.
I have tabulated a few key points below:
With the above in mind, one should take note of the High Volatility that comes with investing in Crypto-currencies.
Roller Coaster Ride?
Imagine purchasing Bitcoin exactly 1 year ago at USD 576.
You would be grinning from ear to ear after being 750% richer as Bitcoin crosses the mark of USD 4,346.
However, if you have bought it at USD 2,951 on 16th June 2017, you would probably have sh*t your pants as it goes down to USD1,920 on 16th July 2017.
That’s a 35% plunge in a month!
In short, it is pretty volatile to invest in crypto-currencies and its best to set aside only what you can lose for this ‘next big thing’.
If you are quite interested to step foot into the unknown world of crypto-currencies, try opening an account first.
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