Is it a Good Time to Invest in Cryptocurrencies?

Friday, July 16th, 2021, 10:34:16 AM


A couple of years ago, only a small number of financial experts or tech enthusiasts had an idea what bitcoin actually is, and what is the technology behind that concept. A concept of digital currencies is a fairly new phenomenon in the investing world and some of those currencies have been smashing records. Let’s consider available hard core evidence.

Bitcoin (CRYPTO: BTC), the most popular type of cryptocurrency, has seen its price increase by nearly 90% so far this year. Ethereum (CRYPTO: ETH) has soared around 435% this year. And the price of Dogecoin (CRYPTO: DOGE) has skyrocketed a whopping 7,800% in the same time period.

Now, this is a millionm dollar question: What the future holds for crypto? And another subtle question pops up: Is it a good time to invest in cryptos?  Followed by: Why invest in cryptocurrency!?

Let’s Diversify our Portfolio

From the time immemorial a certain proverb brilliantly described the basic rule of safety and (financial) security: Don't put all your eggs in one basket. This concept could have been interpreted differently, such as ‘don't risk everything on the success of one project’. A rational and prudent investment consultant may say that a certain or maybe small portion of an investor’s portfolio probably should cover cryptocurrencies.

The diversification of the portfolio and inclusion of cryptocurrencies ultimately may bring a fresh understanding of how it works. The logic is perfectly clear - better understanding of digital currencies leads to smarter financial decisions and better investment results. This is always a risky business as cryptocurrencies are highly volatile. However, no pain, no gain and one should pick his or her cryptocurrency investments wisely. 

All eggs in one basket

The Next Big Thing

It is evident that cryptocurrency is a global currency and acceptable in many countries without exorbitant fees. The important idea behind the digital currencies and their global acceptance is a possible and radical transformation of the banking and financial services industry. In June 2021 El Salvador became the first country in the world to officially classify Bitcoin as legal currency. It started a brand new chapter in the history of money.

A range of relevant financial authorities predicted that many more merchants will be accepting digital currencies as a form of payment and it will undoubtedly generate massive impact on society. In order to be ahead of the pack the time to invest in cryptocurrencies is now!

Stack of Bitcoins – New form of a Digital Gold

Transformative Technology

Building cryptocurrencies is a pretty complicated and complex process, yet the final result is simply a digital ledger of relevant cryptocurrency transactions that is extremely hard for hackers to abuse or misuse. It is impossible to print or seize digital currencies and consequently they indeed represent a genuine value. Yet there is no guarantee that they will achieve mainstream status. In order to safely buy cryptocurrency there are certain complex security protocols that should be strictly followed.

Virtually there is no doubt that digital currencies grow tremendously. It started with the spectacular growth of bitcoin (BTC) and ether (ETH), and the expansion will certainly continue. To spice things up further, there are many brand new types of blockchain investment products leading to a new group of digital millionaires. Shall we join those digital currency investment waves or not, the question is now!

Keep in mind that these currencies are a possible gamechanger for various industries, not only banking and financial industry but also healthcare, logistics, shipping, supply chains and much more.

Investing in cryptocurrencies - Representation

We believe in the digital future!

If you do believe in the digital future, think about investing in digital currencies and earn decent returns while wholeheartedly supporting the bright future of digital technology.

Digital peace of mind is very important. Mathematical algorithm elegantly capped supply of cryptocurrencies. It is impossible for any government, local or international organisation to cause inflation or in any other way decrease the monetary value of cryptocurrencies. To make things even more beautiful, no state authority such as a Receiver of Revenue or any other Tax Authority may confiscate or appropriate ‘digital gold’ without the tacit and explicit permission from the owner. Finally, with your digital currency you don’t have to worry about any disaster scenarios or institutional failures. You are totally protected in that respect.

As digital currencies operate without any central intermediary or authority, it is essential to safely store the cryptographic keys ultimately controlling the relevant blockchain address. All investors must follow very carefully a range of special security measures and protocols in order to keep hackers at bay. It is imperative to protect digital wealth and also keep in mind that hackers constantly refine their criminal techniques and security is of paramount importance.

The majority of digital wallets cannot be reset if the investor lost the passphrase. Unfortunately millions of dollars in cryptocurrencies were lost as certain ‘smart’ investors either lost their passwords or devices.

Different cryptocurrencies represented as coins

Speculative Trading

A little warning is needed here, as we strongly embrace a digital future and cryptocurrencies. The market is overwhelmed by speculative trading at present. Instead of seeing a dramatic increase in ordinary trades and purchases, the key use for ‘digital gold’ remains exchange trades.

High profile cryptocurrency sceptics, including some of the famous billionaires, strongly warned against a potential ‘crypto bubble’. Therefore, it is of crucial importance to properly assess this development, as certain speculative actions may end very badly for a large number of investors.

A final word of warning is to respect the spectacular development of blockchain technology which lies at the heart of digital gold and be fully aware of any speculative behavior. Furthermore, it is dangerous to fall into certain psychological traps, such as herd instinct, Fear of Missing Out, or the Greater Fool Fallacy, which can make all the subtle difference between a calculated risk and a foolish one.

Smart Conclusion

Yes, traditional investors do accept cryptos. They mastered the challenging security protocols and did their homework in thoroughly researching their brand new investments. It all created widespread media attention in bitcoin specifically and cryptocurrencies in general. Many major platforms, such as PayPal or Square have started accepting various cryptocurrencies. Definitely we have observed a growing acceptance and usage of digital gold.

Finally, one has to understand a potential for loss before embarking on investments. That point is absolutely essential. At the end of the day, a decision making process regarding whether to invest in bitcoins/digital currencies or not will always be closely related to each individual’s own assessment and trade off between various advantages and disadvantages.