Is It Still Worth Leaping On The Cryptocurrency Bandwagon?

If you’re in the fortunate position of having some excess cash that you wish to invest down a lucrative avenue, you may be tempted to make a foray into the world of cryptocurrency. With the bitcoin becoming worth nearly $20,000 at the end of 2017 from its modest starting point of $1000 at the beginning of the year, you’d be forgiven for thinking that it’s easy to make a quick buck in the cryptocurrency market. Can it really be that simple? Not if 2018 values are anything to go by.

Cryptocurrency has its advocates and its critics and has divided the financial sector for nearly a decade. From its embryonic stages, cryptocurrencies began as highly unregulated entities. Even in 2018, this is a world that has few rules and is unsecured. Many exchanges have seen bitcoin stolen from their virtual vaults, leading to investors losing astronomical amounts of money. Because this industry is still unregulated, there is no way to retrieve investments made in good faith.

Volatility

It’s not simply the nature of the market that has many of its critics up in arms. Bitcoin, Ethereum and other younger cryptocurrencies such as Ripple are incredibly hard to forecast if nigh on impossible. Values can be slashed by up to 35% in a day or rise by the same figure. For a long-term investment, you have to demonstrate nerves of still and be willing to take a high risk on your return. While many advocates suggest that bitcoin is still finding its feet and that the market will be easier to predict in the future once the sector has settled and embedded, many amateur investors are still entering the market blind.

However, there has been some effort to make cryptocurrencies a viable long-term investment option. The emergence of the bitcoin IRA has meant that people can select to plan for their retirement by purchasing this virtual currency. IRA custodians are choosing to specialize in this volatile market to save would-be amateurs from taking a large and uninformed risk. Like most markets very much in their infancy the risks that are immense initially could be well worth taking once you are reaping the rewards in your twilight years.

It has become all too easy for the novice with a spare bit of disposable income to invest in cryptocurrencies only to lose their money. You can even purchase bitcoin with a credit card through one of the many exchanges available online. Lloyds Bank in the UK became so concerned about their credit being used by its customers to purchase cryptocurrency that they put a block on all future purchases in February 2018.

Short Term

If you have money that you can afford to lose, then why not take a chance on bitcoin? A venture into the land of cryptocurrency is more like a flutter on the horses than an astute and calculated investment into the markets. By diversifying across a range of cryptocurrencies or by placing some of your wealth down more low-risk alternatives, you can lower the chances of financial disaster. If you’re willing to take a gamble and strive for a quick turn around on a short-term investment, you need to try and purchase low and sell high and keep an active eye on the market hourly, such is its volatility.

Alternatives

The traditional avenues down which to invest remain as viable as ever. They are well regulated, you can make sensible predictions when it comes to property or Forex forecasts, and you have many more options for long-term investments. You could choose to purchase some bricks and mortar, set yourself up as a landlord and have an asset that will increase in value over the next decade or two. Alternatively, you could choose to forego the cryptocurrency and take a jaunt into the foreign currencies market instead. Although not as easy to break into as bitcoin, you can set up a dummy account with a specialist company online and hone your skills buying British Sterling against Japanese Yen. Once you feel confident, you can take your newfound skills onto the live market and try to make it in the trading world.

Like most things, you shouldn’t endeavor to place all of your eggs in one basket. You need to spread your investments across a range of low, medium and high-risk options. By leaping on the bitcoin bandwagon, you could find yourself with egg on your face or smiling all the way to the bank. Only time will tell.


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