Cryptocurrency is the buzz of the year. It's echoing in the investment world while everyone else is talking about it in hush tones. The beginning of 2021 saw a huge spike in crypto prices. Bitcoin, the unofficial synonym for cryptocurrency hit its record high of $62,575 in April and Ethereum price soared above $4,000 with the rest following the trend. As you can tell, Bitcoin is the highest-valued crypto in the market but that's not your only investment option. But before we talk about the best crypto coins to invest in, I'll answer some burning questions regarding cryptocurrencies.
Many researchers have the opinion that cryptocurrencies have the potential to transform the world. It will have an obvious impact on the financial aspects of our lives and beyond. Currently, cryptocurrency is not globally accepted as a payment method but many countries are discussing the possibility. So by investing in cryptocurrency now, you can be ahead and have a high-valued asset in the future.
Another reason people are inclining towards cryptocurrencies is to diversify their portfolio. If you're experienced with the volatile nature of stock markets, investing a little in cryptocurrency won't hurt. In fact, by doing so, you will gain a better perspective about the crypto industry with more research and real-time insights. But unlike the stock market, crypto is a bit more unpredictable, so only invest the money that you can afford to lose.
As mentioned, cryptocurrencies are more volatile than any other market. Bitcoin, the golden crypto, has once lost approximately 80% of its value and though the value is better now, it still sees heavy fluctuations. If you are not good at managing risks, investing in crypto can be very stressful. Even with the long-term plans, going through the short-term ups and down can be a herculean task.
No matter who the expert is, it is impossible for anyone to get the predictions right. As many countries are still at crossroads regarding the applications of cryptocurrency, nobody can tell for sure how these assets will perform over time. And because the concept is still relatively new, no one can tell if the coming developments will be for the good or crash everything with it. So, be mindful of the risks.
Apart from the investment itself, there are other risks that come after buying crypto. Cryptocurrencies don't trade on stock markets but are bought and sold through cryptocurrency exchanges. Plus, you will also need a crypto wallet to safeguard the key to your asset without which you cannot make any transactions. While the blockchain technology behind cryptocurrency is supposed to be solid and secure, cryptocurrency wallets are not impossible targets for hackers. Most importantly, if you forget the password to your wallet, there's no way you can retrieve your account.
There are both advantages and disadvantages to buying cryptocurrency. If you're an organized person who can remember important passwords, deal with risks, can afford to bet some money on futuristic assets, then there's no reason why you cannot try your hand at crypto investments. But if you're on a tight budget, rethink your move.
If you need one last push to make the smart decision, this will end your internal debate. And if you're ready to invest, here are the top cryptocurrencies that are showing the most promising growth potential.
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Disclaimer: Analytics Insight does not provide financial advice or guidance. Also note that the cryptocurrencies mentioned/listed on the website could potentially be scams, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. You are responsible for conducting your own research (DYOR) before making any investments. Read more here.