Is It Smart to Invest in Cryptocurrency Right Now?

Author : Marketing Team | Published On : 14 May 2021

The pandemic hit year 2020 was the least favorable for the world’s economy. Yet, the cryptocurrency market remained primarily stable. Is this trend likely to continue in 2021 as well? Is the current year an excellent time to invest in cryptocurrencies?

Researchers confirm that bitcoin has begun its journey towards all-time highs. More and more financial institutions are now resorting to crypto, making it an active part of worldwide fintech.

The opportunities through crypto are aplenty. Therefore, interest in crypto is likely to prevail in 2021 as well. There is no denying that the blockchain sector is expected to be an integral part of all industries. The much-necessary financial infrastructure is being developed across places. Such advanced financial infrastructure enables investors to safeguard crypto assets and manage them efficiently.

Major corporates have collectively made investments worth hundreds of million dollars in digital currencies. There has certainly been a considerable surge in the numbers of individual investors as well. These are proof enough that there is a prevalent belief in the industry that significant investments can be made in crypto.

However, cryptocurrency is not without its share of risks. The crypto sector involves certain risks that are specific to the industry. Also, crypto exchanges have been subjected to criminal activities and hacks in the past. Investors had to deal with significant losses as a result of such criminal activities.

Moreover, storing crypto is not an easier task as compared to traditional investment options such as bonds or stocks. Although exchanges make the process easier, many crypto traders are not comfortable with the concept of keeping digital assets on any of these exchanges. Mostly, strong possibilities of risks, including theft or cyber-attacks, have been the underlying factor behind such a reluctance.

As a result, it can be confirmed that crypto can be one of the highly beneficial investment options provided adequate research is carried out prior to investing.

Here are a few pre-requisites that can be helpful in ensuring a safe experience as a crypto investor.

It is critical to decide how much of cryptocurrency should be a part of the investor’s portfolio. A rational decision might not be easy, and thorough research is required. Various aspects may get involved while deciding on crypto allocation to the portfolio, which could be age, knowledge of the crypto sector, etc. According to several financial experts, a crypto investment of more than 10 % may not be ideal in typical cases.

Secondly, Bitcoin might still be the most popular cryptocurrency, yet the world of crypto is much more diverse. Huge numbers of cryptocurrencies have surfaced and gone in the past. Also, one should not ignore the fact that the concept or the popularity of crypto is not more than a decade old.

Cryptocurrencies are not sold by banks and are available only on exchanges. Here, it is essential to choose a crypto platform from the available options.