Crypto Currencies are the most popular asset for investments today. However, before we lock it in, let’s take another look.
You can put money in cryptocurrencies but to call it an investmentAn investment is made to give you a return. You make an investment if you use your money to buy either physical assets like property or financial assets like bonds and equity with an aim to receive income or gains... More is misleading. At best, putting money in cryptocurrencies is a trade, a short term trade. There are now thousands of cryptocurrencies available, yet just two are worthy of support – Bitcoin and Ethereum. This is because of the security protocols and the way the algorithm is structured, there is less chance of manipulation.
Even for these two, at the moment the only reason for price change is the faith that existing users show for the currency. This means if the majority decides that the value is above the current price, it is likely to go up and if they decide it is below the current price, it will fall. Beyond this faith, there is little fundamental reason for price movement. Thanks to this characteristic of cryptocurrencies, at the moment putting money here, is more trade than an investmentAn investment is made to give you a return. You make an investment if you use your money to buy either physical assets like property or financial assets like bonds and equity with an aim to receive income or gains... More. Be careful of risks in this trade and don’t allocate more than 5% of your overall investible surplus towards it.