Cryptocurrency is a speculative and highly volatile investment. You can make a lot of money with the right investment strategy, but you can also lose all of your money if you throw real money into an unknown cryptocurrency.

Is Cryptocurrency Safe to Invest In?

Cryptocurrency isn’t especially safe; several different factors make individual cryptocurrencies unsafe, and some factors make the entire market problematic.

Cryptocurrency Exchanges

Many people, especially beginners, put their money into Cryptocurrency Exchanges. These exchanges are basically marketplaces that buy, sell, and trade different cryptocurrencies. The exchange ends up becoming your bank and stores your purchases.

There have been many examples of exchanges being hacked or exchange owners taking cryptocurrency. The result is the same, people lose the cryptocurrency, their money, and the investment is gone.

Competition

It’s challenging to know which cryptocurrency to buy. If you buy one of the big ones and aren’t investing huge amounts of money, you won’t be making very much. If you decide to invest in a small new cryptocurrency, it may fail, and your investment is gone.

So you need to research and decide on which cryptocurrency to invest, and how much risk to take. Similar to investing in stocks, but more volatile.

Government Regulation

Governments don’t especially like anonymous payment systems, and many governments are making moves to regulate, control, and tax cryptocurrencies. You also have governments that are outright banning the use of cryptocurrencies, such as China which has already banned all crypto transactions.

There are other countries looking at banning or heavily regulating crypto, such as India. At a minimum, governments are looking to see who is buying crypto and how much they’re not paying in tax.  

So the future for crypto and investments is somewhat uncertain, especially depending on which government you fall under.

Should You Invest In Cryptocurrency?

Think of cryptocurrency like a stock and investing in it as a risk, and then you should absolutely invest some money into larger cryptocurrencies. Crypto appears to be here to stay, countries such as the US have said they will not ban crypto, and people continue to buy it in the hopes of getting rich.

If you invest in something like Bitcoin with only a small amount of money, your risk is low, and you may make a little money if you let it sit and the Bitcoin price grows. Many small investors continue to put money into Bitcoin to boost their overall portfolio.

To make serious money in cryptocurrency, you need to either invest serious money or speculate on one of the new cryptocurrencies coming out. However, that speculation will be a significant risk, and it’s very typical for cryptocurrencies to start, go strong with investment, and then drop off as everybody tries to sell. So it’s a very risky investment even without the other risk factors.

Is Cryptocurrency A Good Investment?

Investing in cryptocurrency can be a good investment for an overall portfolio. You just need to treat the investment as what it is, and that is a volatile stock.

Ensure you’re researching what you’re buying and that whatever risk you’re taking is worth the potential reward. Start your investments small, and grow as your knowledge of cryptocurrency grows.

I am NOT a Financial Advisor. This Website and Information is for entertainment and education purposes only. Always remember to make smart decisions and do your own research!