Cryptocurrency is considered to be the best investment instrument by many financial experts. Though there is a lot of confusion revolving around the same; in terms of regulations, volatility in prices and so on, the surge in trade volume has never declined. It is always on the rise. People have started looking at crypto investment as a commodity investment in recent times. With the returns it can offer in a short period, people are indeed attracted.
However, what all are to be considered before buying a cryptocurrency?
Ideally, there are two different aspects one must factor in before investing in cryptocurrency
- Cryptocurrency is a risky investment. It may go up or down and that might happen pretty quickly. That means to say, investing in one crypto consistently is not recommended. Say, for example, Bitcoin trade volumes have reduced in recent times. This was indeed suggested by the finance experts earlier too. You may be looking at the most expensive NFTs, but understand that the crypto you might possess may go down in value also.
- Crypto might also have security risks in terms of hackers. There can be a scam and you may lose a lot of money if invested.
Crypto is considered a risky investment when compared to other financial instruments. However, one needs to check for a few factors before investing. As you know, it is not completely regulated in many countries, the status of the same is making the price of cryptocurrencies fluctuate. The prime example is the Bitcoin decline due to China’s regulations.
Types of Security Risks
This is of major consideration when you opt to invest in cryptocurrencies.
Legal Protection is Limited: Though you may trade in the best NFT marketplace, there are security issues around this. As you make a credit or a debit card transaction, you shall receive a confirmation on your phone or your email as well. SO, if any unauthorized transaction happens, it may notify you. But, this is not the case with crypto. As such, even if you lose funds from a debit or credit card, you can get them back. But that is not the case with cryptocurrency transactions.
Beware of Crypto Scams: By this time, you would have received a lot of spam emails and texts that shall claim to offer cryptos or even ask you to transact using crypto alone. There are many types of scams and the one mentioned here is one of a kind to steal your money.
Safer Ways to Transact
Firstly, sign up with an exchange that allows you to register only after KYC verification. As such, these sites are highly protected and the identity of the person can be a source of trust. Many online exchanges have sprouted in recent times. Choose the one that is secured.
