Back in 2010, a man from Florida made the first-ever purchase with a cryptocurrency, mainly Bitcoin. The story of it was that he bought 2 pizzas for 10,000 worth of coins, and at the time, it was a fairly good price for 2 delicious pizzas. Now, if this particular person didn’t crave pizzas for dinner and kept his Bitcoin instead, he should be sitting on close to half a billion dollars worth of digital currencies today!
With that in mind, Bitcoin was labelled a terrific investment because of historical standards as it was the best performing investment asset for the past decade, increasing its value by as much as 31,000%. If you invested in Bitcoin roughly a decade ago, you could have hundreds of millions of dollars right now! In 2021, there are already numerous other variations of digital currencies, but can digital currencies, especially Bitcoin, maintain their exponential growth? With the rising popularity of alternate coins, you need to be cautious when venturing into this world as volatile cryptos are much riskier than traditional investments, but then, the potential payout is life-changing, and in this article, we’ll know if crypto is still a good investment or not.
How Safe Are Cryptos?
The first question that pops into people’s minds when it comes to cryptocurrencies is how safe are they? Cryptocurrencies, especially Bitcoin, run on the blockchain, a distributed ledger technology powered by the miners of digital currencies. With that in mind, Bitcoin has the processing power of around 10 to 20 times more than Google’s servers, thus making it one of the most secure networks in the world.
If ever a hacker plans on breaching the data on the blockchain, they would simultaneously hack around 51% of the crypto miners on the network, thus making it virtually impossible to do. However, there is still a possibility where cryptocurrency exchanges can get hacked unless you decide to store your crypto in a hardware wallet so that you’ll be completely safe from all the bad sectors.
If you are searching for a beginner-friendly and trustworthy crypto trading platform, check out Bitcoin Profit.
Insurance In Crypto Investments
Similar to other forms of investments, investing in cryptocurrencies are not insured. However, some crypto-related investments have insurance options. For instance, there is a platform called coincover, and they offer insurance options for users in digital wallets and cryptocurrency exchanges. So if most of the companies use coin cover, all of their users’ cryptocurrencies are insured for theft or the loss of their private keys in some cases.
Putting Your Money Into Crypto
Numerous investors see the potential of cryptocurrencies as long-term investments, and there are even some investors claiming that they won’t sell their accumulated crypto because they truly believe that cryptos will eventually replace fiat currencies or even gold. On the other hand, some digital currency traders see crypto as a short-term investment. When its market value rises and sees the potential return of investment, they’ll immediately sell their crypto before it plummets down to unacceptable numbers. There are even some traders that will ultimately buy digital currencies that don’t have any real value because they believe that their price will go up regardless.
Investing For Short Term or Long Term
Crypto traders who invest in digital coins for the short-term don’t care about the utility of crypto but more about its market value. For instance, numerous short-term crypto investors invested in Dogecoin, which was meant to be a meme by the time it was released and had no competitive advantage against the others, thus looking for quick profits due to its high volatility.
When it comes to long-term investments, cryptocurrencies are a great choice because of their potential for substantial returns and also if you believe in blockchain technology. Bitcoin, the most popular and first-ever established crypto, is already seen as a store of value, and some people think that it will eventually replace gold in the future. Ethereum, on the other hand, is the 2nd-largest crypto by market cap and also has massive potential for growth as an investment for the long term. You can find some of the best crypto brokers online here https://bestcryptobrokers.net/
Should You Invest?
Owning some digital currencies can diversify your portfolio since some crypto, such as Bitcoin, have shown historically that it has no price correlation with the stock market. So if you believe that the usage of crypto will be extended over time, then it probably makes sense for you to buy some crypto to be a part of your diversified portfolio. However, cryptocurrencies are not quite similar to other forms of investments as cryptos are riskier than most, so you have to ensure that you have an investment plan that will let crypto stand the test of time.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect those of Geek Vibes Nation. This article is for educational purposes only.
Amanda Dudley is a lecturer and writer with a Ph.D. in History from Stanford University. After earning her doctorate in 2001, she decided to pursue a fulfilling career in the educational sector. So far, she has made giant strides by working as an essay writer for EssayUSA, where she delivers high-quality academic papers to students who need them.
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