Investing in cryptocurrencies is one of the major forms of investments and over the years it has made people millionaires and billionaires that’s when the crypto market is good, you see assets skyrocket with high returns of value but however, but that’s just one side of it and that’s positive. Investing in crypto has both positive and negative sides and that’s because of its volatility that is why professionals have been advising newbies not to use their emergency funds i.e. funds that they can’t afford to lose.
Newbies are fond of getting into crypto when the market is good and in doing so, they believe they can make a profit from it as the market is good and they greedily put all their wealth or a huge part of their wealth into it believing they can have high return immediately from it. They only want to experience the good part of it forgetting that cryptocurrency on its own is highly volatile which is the negative part of it and when that happens, they can lose their wealth.
For example, imagine people who bought crypto with a huge amount of cash at $30k thinking it was the start of the bull run which isn’t a bad idea though but they only got a small amount of profit because bitcoin’s ATH this year is $31k however, if they still have their wealth there now they have experience huge loss because bitcoin is currently floating between $26k and $27k. The only benefactors are the early adopters who bought below that despite the current bear market their loss is minimal.
Putting the majority of your wealth is not advisable in any way because cryptocurrencies on their own face a huge amount of risk from volatility to cybercrimes like hacking and other fraudulent activities going on in the digital world and this is all due to the lack of regulation too. So, the best way to secure your wealth is to diversify it and invest only the funds you can afford to lose because putting all your eggs in one basket can cause a big loss in the long run.
Despite crypto being a long-term investment it's not advisable to put all your money all wealth in it because of the risks that come with it.
Posted Using LeoFinance Alpha
As an investor, the best decision is for you to afford putting all your egg in one basket. That will be one of the greatest mistake to make