With the most recent upsurge in bitcoin value during the covid-19 pandemic, you might start feeling a sensational fear of missing out if you haven’t invested in cryptocurrency already. But do you really risk missing out, or is a cryptocurrency just an overhyped bet? Essentially, the answer depends on your desire to take risks and your investing strategy. Let’s take a look at whether or not it’s too late to start investing in crypto in 2021.
What Is Cryptocurrency?
Although there are hundreds of cryptocurrencies, bitcoin, dogecoin and Ethereum are the biggest ones. Cryptocurrency is the digital currency that’s secured within a decentralized network, enabling peer-to-peer transactions that are free from government interference or manipulation. The digital currency is usually created through a complex software process referred to as crypto mining that limits supply and every coin is distinct and almost impossible to counterfeit.
Why Invest In Crypto?
Crypto enthusiasts consider bitcoin to be the virtual version of gold. Today, more investors are allocating some of their funds to bitcoin and other popular digital currencies besides commodities and stocks.
Blockchain technology has over the past few years transformed the digital world with faster transactions, higher security, and more transparency. Bitcoin and other big cryptos are built on blockchains.
More industries are quickly adopting blockchain technology because of its efficacy and absolute benefits. As more and more markets appreciate the advantages of this technology, more industries will become open to bitcoin as well as other big cryptocurrencies.
From its inception in 2009 until to date, bitcoin has been burgeoning despite the volatility and price fluctuations. Antony Pompliano, a Crypto investor believes that BTC will surge above £70,000 by end of this year.
If you’re thinking that the stock prices are exaggerated, or the returns on government bonds are very low, you should consider buying bitcoin.
The biggest drawback to investing in cryptocurrency is volatility. The unpredictable swing in value is pretty common and you can easily lose all your money within minutes. Therefore, it’s important to ensure that cryptocurrency makes sense with your investment strategy, especially when it comes to risk tolerance. For instance, if you’re an avid investor, but you have limited income, investing large amounts of your savings into bitcoin isn’t a very good idea.
Nonetheless, the trade-off momentum swings have made some investors very wealthy, but you shouldn’t risk the same if you don’t have any understanding or knowledge about bitcoin as an intangible asset.
Is It Too Late To Start Investing In Cryptocurrency In 2021?
It isn’t very late to invest in cryptocurrency if you still believe in the crypto’s potential and can withstand its volatility. The most important thing is to make sure you only allocate a small chunk of your savings, about 15%, and not everything.
There is no guarantee that BTC will reach £70,000 by end of 2021, but if it does, you’ll be glad you trusted your instincts and invested in it.
Tretina, K. (2021, July 14). How to buy cryptocurrency. Forbes Advisor. https://www.forbes.com/advisor/investing/how-to-buy-cryptocurrency/
Should I invest in bitcoin? (2019, November 25). Times Money Mentor. https://www.thetimes.co.uk/money-mentor/article/invest-bitcoin-cryptocurrencies/
Duffy, C. (2021, May 4). Want to invest in crypto? Here’s what you need to know. CNN. https://edition.cnn.com/2021/05/04/investing/cryptocurrency-how-to-invest/index.html