If you are one of the people that are thinking about saving all your money in cryptos, you better think about it twice. You should invest in cryptocurrencies only if you actually know how they work and how cryptos can benefit you or harm your personal finances.
Cryptocurrencies are the new form of decentralized payment that can be used to exchange products and services all over the world. Since 2009, cryptocurrency started to gain adepts thanks to the possibilities of being used, its transparency, and the technology that involved them when first started.
A lot of people think that Bitcoin (BTC) is the only one available because of the bullish market that is been going on since the last year. However, there are actually a lot of them, for example, Ethereum (Ether), Dogecoin, Litecoin, Stellar, and each one has its benefits, we’ll get back to them below.
On the other hand, you need to understand that cryptocurrencies aren’t a way to have savings against inflation or means to avoid taxes. This is actually a high-risk investment since their price fluctuates 24/7 – 365 days according to a variety of factors like:
- The market’s trust.
- Supply and demand.
- External situations.
- Technological applications.
- Finance and business influencers (like Elon Musk).
No. As mentioned above, there are a lot. Actually, according to coinmarketcap.com, there are more than 6,700 different cryptos but most people only take a few of them into account. Why is that?
You see, a lot of these currencies are in the form of tokens, and they are issued by companies or organizations in order so you can have another way to purchase their merchandise. The thing is, that they don’t actually have a tradable value for investors or people that is not looking to buy stuff from mentioned companies.
So, the difference between one and the other is the trust that the market has in each one of them and the market capitalization that they have. This is why Bitcoin is the one that takes the lead.
However, you can find other top cryptocurrencies in the market if you want to invest. E.g, Ethereum, which is the second most important coin and is focused on an open-source platform, so its use for mobile applications is extensive.
You also have others like the ones we mentioned above like Dogecoin, which lately is part of a scandal led by Elon Musk on Twitter, where only a tweet was enough to make its price skyrocketed 250%.
The simplest answer is yes, you and everyone can invest in cryptocurrencies if you are willing to exchange fiat into coins.
To get some, you need to take into count this:
- You must have an e-wallet, like Blockchain, where you can save and hold your currencies. These are online platforms where you can send and request cryptos from everyone, and even invest and generate extra money.
- Wallets must be verified with your ID in order to get all the features enabled for you.
- There are a lot of platforms to use, so you should only use the ones that fit better for you.
- Each transaction has a fee, that can go higher or lower according to the value of the crypto and the congestion on the blockchain.
Now, some coins are less tradable than others, like Stellar or XRP. If you want to be the owner of some of them, you need to find exchanges like Binance where you can buy some. There are a lot of these websites on the internet, so be careful where you send your money.
We’ve all seen that cryptocurrencies are now taking part in our daily conversations because of the rise that their prices have had. However, do we really know why is this happening?
Let’s be honest, last year was a global financial mess where countries needed to print money in order to solve the needs that the pandemic provoked. As a consequence, fiat money, our daily money, is at risk of being depreciated due to the fact that we can’t handle more national debt and that there is more money printed than can be backed by our national reserves.
This actually happened in a lot of third-world countries, where their local currencies lost their value against the US dollar. And American society is afraid of this.
As a result of this fear, a lot of people have invested their savings into cryptocurrencies and other financial instruments, such as the stock market, to prevent them to lose money in case of inflation.
This is the primary reason why crypto prices are going all the way up in a bullish market mostly provoked by regular people.
Now, the million-dollar question that you may be asking yourself “Should I invest in cryptocurrencies?”
Well, let us remind you this first. If you want to own cryptos you need to be aware that this is actually an investment. This is not a savings account where you can put your money into and that’s it.
So, with this been said, investing in cryptocurrencies is a personal decision that only you can take. However, it is a wise choice not to keep all your capital in fiat money, since this one will depreciate as time goes by. Therefore, having a portfolio of investments to save your money and have profits in passive income is actually a good idea.
As you can see, people that invested in BTC in January 2020 gained at least 700% of their investments, which if you think about it, is a lot of earnings. Because let’s say that you bought $100 worth of BTC. Today, it would be worth $700.
So you can see, cryptocurrency can be profitable.
And what if you don’t have money, but still want to be part of the cryptocurrency craze?
Well, you know that we live in a digital society now. So nowadays, there are loans that you can take to buy Bitcoin or other coins. If you know that you can actually repay what you borrowed, a solution could be taking an installment loan and pay it off in a year or two.
It may seem a little risky, but analysts say that BTC price can go higher, up to $100.000 by the end of the year, so you actually can end up paying your debt with the profits gained from the money you invested.
The cryptocurrency usage will most likely keep rising given the amount of government debt around the world and the fear of world currencies falling in value. This makes it worth it to take on debt to start investing in cryptocurrencies instead of using money dedicated to everyday bills and expenses as savings that will only lose value if things get out of control.
Flash Financial Guide can teach how to increase your savings so you can start investing in BTC or another crypto that you want to own.