Cryptocurrencies have been the talk of headlines for some time now. Some are quick to dismiss them as nothing more than a fad, while there are those that believe in their potential.
Advantages of Investing in Cryptocurrency
High Return Potential
Bitcoin is one of the best examples of how extremely valuable a cryptocurrency can become. BTC’s value hovered over the $1,000 to $2,000-mark in early 2017. But that value skyrocketed from $4,700 in September to a whopping $20,000 by year-end.
Not to mention that Bitcoin was almost worthless in 2009. So the people who invested in it during its early days ended up with hundreds of thousands or even millions of dollars’ worth!
It’s not just Bitcoin that’s experiencing this seeming modern-day Tulipmania, but other cryptocurrencies as well. Take for example Stratis’ and Spectrecoin’s 63,000% and 13,000% increase in price thanks to their ICOs.
One of the cons of investing is the challenge you’ll face if you want to pull out your capital. But that’s not the case when dealing with cryptocurrencies. No longer do you need to worry about the stock market or go through the painstakingly slow process of capital liquidation. If you’d like to pull out your crypto investment now, then you can. Just make sure that you’re registered on cryptocurrency exchanges with have the trading pairs that you need.
Another cool thing about investing cryptocurrency is that you’ll have a good insight on the ideal amount you’re going to invest. You’ll know what the team will be doing with your funds and the total number of tokens in circulation.
You can also have a clear picture of where your crypto investment is going. Is it feasible? What is its target market?
Disadvantages of Investing in Cryptocurrency
Potential network stall.
Cryptocurrency, just like anything else in this world, has its disadvantages. One of which is its over-dependence on “hype.” Demand determines a cryptocurrency’s value. The more the people want and need it, the higher its value gets.
How do you do that? Well, by sparking debates about it in social media and making it the stuff of news headlines. But once it fails to attract users, there’s no doubt that its value will fall.
Cryptocurrencies can be comparable to a gold bar this month, and to a kilo of meat the next. Sounds crazy, right? Well, that’s just how it is. Unlike stock market investments, virtual currencies are so volatile that even a single isolated case of hacking can send it spiraling down. Until now, this remains to be one of the biggest reasons why cryptocurrencies haven’t yet made it to the mainstream.
If any of the founders happen to lose interest or probably have a decrease in productivity, then that could spell the end of that cryptocurrency if a new team doesn’t pick up the project.
Every innovation has its own fair share of criticism. Like the invention of electricity in the early 19th century, people were quick to dismiss it as too dangerous for everyday use. What I mean is that every innovation (in this case, cryptocurrency) has to first go through a process of acceptance before it can be widely accepted.
There’s no denying that cryptocurrency still has a long way to go. But with our innate nature of ingenuity and the desire for continuous improvement, there’s no doubt that we can perfect cryptocurrency to make the world a better place in which to live.