Increasingly, the blockchain cryptocurrency technology is stepping out of niche territory and heading firmly towards mainstream adoption. It may be some time before crypto coins make a real dent in the market share of any conventional currency, but the popularity of the world’s most prominent cryptocurrencies is at an all-time high.
Bitcoin is once again leading the charge, having caught the eye of new and experienced investors alike with its recent and ongoing rally. Hitting somewhere in the region of $62,000 as of mid-April, those who made the right moves at the right time with Bitcoin are currently reaping incredible rewards.
But does this mean that blockchain cryptocurrency is necessarily a sensible choice for newcomers and casual investors? Is crypto exactly the kind of accessible investment vehicle more people should be diving into, or does the usual ‘approach with extreme caution’ mantra apply?
A Tale of Two Halves
Cryptocurrency has the kind of appeal that transcends that of more conventional assets. A recent study brought to light a series of interesting findings on just how popular crypto investments (and the use of crypto coins) is becoming in emerging markets across Europe, Asia, Africa, and South America.
When polled on their short and long-term plans, almost half of the participants who took part in the study (49%) indicated that they intend to invest as much as 30% of their annual income in digital currency. Furthermore, 23% stated that they would invest in excess of 30% of their income in crypto coins.
Figures like these highlight the growing popularity of blockchain cryptocurrency investments on an extremely broad level. As for whether investing in crypto (and investing so much in it) is a sensible move for new and inexperienced investors, it depends which perspective you look at from.
Yes - Crypto Investments Are the Obvious Choice for Inexperienced Traders
Those who advocate blockchain cryptocurrency technology as an ideal starting point for investors highlight the comparative simplicity of buying and selling crypto coins. You set up a digital wallet, you sign up with a reliable trading platform like Bitpatt and you hedge your bets accordingly.
Also advantageous with crypto is the way in which you can get involved without getting in too deep. If you’d prefer not to invest more than $100 on the line and see what happens, there’s no need to do so. In any case, the volatility of major crypto coins like Bitcoin means this $100 could quickly grow into something much healthier.
To date, crypto trading has delivered exceptional short-term and long-term returns for all types of casual investors and skilled professionals alike. Bitcoin trading in particular is often likened with gambling at an online casino - you can’t predict the outcome, but it’s fun to give it a go and you never know.
In which case, crypto trading has a lot to offer casual traders who’ve no real intent of taking things too seriously.
No - Crypto Investments Are Not Suitable for Inexperienced Traders
On the flipside of the coin, some would say that the insane volatility of the major crypto markets makes it one of the most dangerous options on the table for inexperienced investors. Even those who know what they’re doing cannot accurately predict what’s going to happen with any crypto coin from one day to the next.
Hence, those who would confess to not knowing what they’re doing have even less idea what’s on the horizon.
In addition, there can be a tendency to get carried away with what appear to be ‘quick fix’ investment options like these. You throw a few bucks into the ring, the result pans out in your favour and you see no harm in stepping things up. Unfortunately, basing investment decisions on guesswork and hunches is a recipe for disaster.
Given the tendency for cryptocurrency to swing wildly in both directions, there’s huge scope for potential losses without a carefully formulated investment strategy.
Drawing the Line…
Of course, there’s no such thing as a safe investment vehicle and nor can the future performance of any asset be accurately predicted. This is the crux of the whole thing with buying and selling all types of assets - you take risks, and you win or lose accordingly.
Blockchain cryptocurrency is no different, aside from the fact that volatility tends to be vastly higher. For inexperienced investors and casual traders, crypto can indeed represent an ideal entry point to the world of asset trading. It’s simply a case of acknowledging your limitations, establishing your risk appetite and ensuring you don’t get too far out of your depth.