Is Crypto Worth Investing In? Expert Insight - Florida Independent (2024)

Crypto is a highly volatile investment vehicle. That means investors can see some serious wins… but also experience scary lows.

In the past few years alone, Bitcoin plummeted to as low as $10,000 in 2020, while currently, it’s sitting at $29,000 and rising fast. And it’s arguably the most stable of the cryptocurrencies out there right now.

Are you wondering, “Is crypto worth investing in?” Then, this article’s for you.

We take a close look at the pros of using cryptocurrencies to diversify your portfolio. That’s balanced by some cons you need to consider, too.

Read on to start building wealth today!

Advantages of Investing in Crypto

There’s a reason crypto is so popular today. It’s transparent and accessible, and people can win big (really big) if they make the right choices.

Potential for High Returns

This is one of the most attractive aspects of cryptocurrencies for investors.

There’s no denying the crypto market is volatile, but historical data shows a significant growth in value. For example, Bitcoin has seen its value rise from less than a cent to well over $60,000 in the past decade.

Another reason you can see substantial gains is that crypto is a relatively new asset class; its value is driven by demand. That means the value continues to rise as more people buy into the scheme.

One way to ensure you’re getting the best returns is to invest big and save on large cryptocurrency trades. Find more here.

Decentralization Means Less Government Control

Decentralization is another significant advantage of investing in cryptocurrencies.

Traditional financialmarkets are controlled by governments and financial institutions. Cryptocurrencies, on the other hand, are decentralized. This means they operate independently of any central authority. Transactions are verified and recorded using blockchain technology, making them more secure and private.

Crypto investors are generally less susceptible to fraud, viruses, and market manipulation. They can manage their portfolio transparently, and they’re also able to avoid government control over their finances.

However, that doesn’t mean this is a riskless venture—as the recent FTX crypto scam proved. Investors must educate themselves on blockchain and decentralized technologies and take the necessary steps to protect their investments.

It’s Accessible

Traditional investments typically require significant capital or specialized knowledge. There’s a lot of gatekeeping going on. Conversely, cryptocurrencies are accessible to anyone with an internet connection.

Anyone can participate in the crypto market, no matter their financial situation. There are no minimum investment amounts. There are no restrictions on who can invest.

People with limited funds can invest in cryptocurrencies of their choice and potentially see significant returns.

In addition, investing in cryptocurrencies is relatively straightforward. There are tons of platforms and exchanges out there—these are the platforms you use to buy and sell cryptocurrencies. With just a little homework and some basic tech knowledge, it’s easy to get started.

Finally, accessibility also offers greater flexibility. Cryptocurrencies are digital assets, so they can be traded 24/7. Say goodbye to the stock market trading hours of traditional investing!

You Can Use It to Diversity Your Portfolio

Finally, crypto can be an excellent way for experienced investors with fingers in many pies to diversify their portfolios.

Spreading your investments across a range of asset classes reduces risk. If one class doesn’t do well, you didn’t have all your money tied up in it, so you don’t lose too much. What’s more, you can even diversify extensively within the cryptocurrency market. There are tens of thousands of coins to choose from!

Experts generally say to have between 1% and 5% of your portfolio in crypto.

Downsides to Investing in Crypto

The benefits of becoming a cryptocurrency investor are pretty clear. So what are the cons?

Crypto Can Be Volatile

One of the most significant downsides to investing in cryptocurrencies is their high levels of volatility.

Prices can rise or fall rapidly and unpredictably. In fact, history has seen this happen in double-digit percentages in a single day. Factors such as news and rumors, changes in investor sentiment, and market manipulation contribute to these price swings.

These so-called “boom and bust” cycles make it challenging for investors to predict price movements. This can result in substantial losses for those with a lot in the market.

There’s an Element of Regulatory Uncertainty

The regulatory environment for cryptocurrencies is still evolving. There’s a lot of uncertainty about how governments and financial institutions will attempt to regulate the sector in the future.

This creates risk for investors. Depending on where you live in the world, your local government might embrace or outright ban crypto investment—or everything in between.

Many businesses are also wary of considering crypto due to this lack of clarity around the future of the asset class. This limits the growth potential of the market.

Is It Really That Secure?

Cryptocurrencies are generally considered to be secure. But there have been instances of high-profile hacks and security breaches in the past.

If you’re an investor on the wrong side of one of these hacks, you can expect to see significant losses. What’s more, the reputation of that particular cryptocurrency is damaged—often forever.

One of the main risks to investors is hackers gaining access to (and emptying) your cryptocurrency wallet. Some investors also fall victim to scams or phishing attacks, where the entities involved are after your funds or personal information.

Lack of “Real” Value

Finally, some investors are put off crypto as an asset class because it lacks intrinsic value.

Unlike property or stocks, you can’t “see” a cryptocurrency. They’re not backed by physical assets or government guarantees. The value of cryptocurrencies is primarily determined by supply and demand—including investor sentiment, news, and rumors.

This makes them more vulnerable to market speculation and manipulation.

Is Crypto Worth Investing In? Get the Answers Here

So, “Is crypto worth investing in?” As you can see, there’s no straightforward answer to this question.

Cryptocurrencies and blockchain technology offer some clear benefits to investors—from more transparency and less regulation to greater accessibility and (potentially) significant returns. But, of course, investment in this emerging asset class isn’t without sometimes substantial risk.

For more advice on how to make money with crypto, browse the other articles on our website.