Cryptocurrencies and digital currencies have exploded onto the scene in the past decade or so – barely a day goes by without it being mentioned in the media. But, just like every other investment opportunity, there are clear pros and cons with crypto – which we are going to take a look at right now.
Pro – it’s fun!
First and foremost, collecting digital money and assets is a little like collecting football trading cards. There are stats to read and find out, and there is a lot to think about, as well as the crypto community and culture being both welcoming and immersive. Some people treat crypto solely as an investment, but it doesn’t have to be this way. There are numerous faces to cryptocurrencies and you can use it for a whole bunch of reasons. Some people are using blockchain as a way to solve industry problems. Others are simply mining coins themselves and selling them on the market. It’s a lot more than just day trading or putting your savings away in an account – it’s a huge amount of fun.
Con – it’s risky
We won’t lie – while the rewards in something like Bitcoin have been huge over the past decade, there are still plenty of people that have lost a lot of money. Unfortunately, not everyone is going to win the jackpot with Bitcoin and it is likely to be the same for other cryptocurrencies. It’s risky, unregulated, and could all end in tears if you are less than 100 percent certain you know what you are doing.
Pro – it’s an open market
One of the great things about cryptocurrencies is that you can access it, trade it, and use it all over the world. Forget about your sovereign currencies, it’s cryptos that are truly global. This means cryptos can be a great stabilizer in areas of the world where currency fluctuations are rife.
Con – it’s owned by a small fraction of people
Each cryptocurrency is, in practice, owned by a few select people. While anyone can buy in, the reality is that the majority of these cryptos are held by a small number. It means it can be manipulated however they want it, and while it won’t always happen, it’s important to bear in mind. The reality of crypto right now is that at any point, a majority owner could decide to sell their portion, meaning the value will tank – and you could lose a fortune.
Pro – it can give rapid gains
If you had bought a Bitcoin back in the day for pennies, it could be worth a five-figure sum by now. That’s an incredible statistic and shows that if you invest or trade in a crypto, you can get incredibly quick gains.
Con – it can be volatile
Finally, those high gains and rapid losses are a sign of volatility. Cryptocurrencies are not something you want to play with if you want to keep your money safe, so always be careful, learn everything you can, and seek out the right kind of advice.
