When you go about placing bets on MLB games, for instance, you know what advantages you have to gain by factoring MLB lines, odds, and spreads in your decisions. But what do you have to gain when it comes to investing in cryptocurrency and what are some of the key disadvantages to be aware of as well.
Cryptocurrencies are known to have great potential when it comes to reshaping the financial world when compared to the more traditional financial infrastructures of this world. So, with so much to look forward to, we’ve put together a beginner’s guide on the pros and cons associated with crypto investments. This way, you can make more informed decisions on which cryptocurrency to invest in and if it’s even for you as a novice investor.
Advantages Of Cryptocurrency
The Higher The Risk, The Greater The Return
The crypto market is made up of more than 10,000 cryptocurrencies and each one has a quirk of its own to take advantage of. But if there’s one thing these cryptos have in common, it’s that they all have a tendency to experience all kinds of sudden spikes and drops in value. Since these prices are primarily driven by the supply of coins from demand and miners, there’s great potential for massive gains.
Blockchain Technology Is Inherently Secure
Some of the major benefits of investing in cryptocurrency are due to the infrastructure that supports them through blockchain technology. This is a decentralized ledger that stores data making it possible to track each transaction that’s made. Once an entry has been made, it can’t be tampered with or erased, therefore, no hacker can have access to the whole chain in a single go making all the information that’s stored in it, safe.
Cryptocurrencies Present A Fair And Transparent Financial System
Generally speaking, financial systems revolve around third-party intermediaries that are responsible for processing transactions. With cryptocurrencies and the help of blockchains, they offer an alternative as transactions can be made without the need for an intermediary.
The Market Is Always Open
Crypto markets are always open for business since transactions are being made and coins are being mined around the clock. There’s no need for you to wait for NASDAQ, NYSE, or any other exchange so the trading day can begin in case you want to trade, buy, or sell crypto.
Think of it like betting on MLB odds. A savvy bettor and a wise investor alike will shop around to find the best situation for their needs before spending any money.
With Cryptocurrencies, Investors Can Beat Inflation
Cryptocurrencies aren’t associated with any economy or even a single currency. This is because the number of crypto coins available on the market is capped. So, the coins in circulation can’t spiral out of control and this allows for zero inflation.
Disadvantage Of Cryptocurrency
Crypto Investments Require Time And Effort
It can take you some time to wrap your head around cryptocurrency and how it works, especially if you aren’t a digital native as this means trying to understand the concept of cryptocurrency and blockchain. If you don’t take the time to understand this properly, you could run the risk of making poor investment decisions which can bring about great losses.
Cryptocurrencies Are Extremely Volatile
The price of crypto can present a massive opportunity to spike to all-time highs and this could mean great benefits for investors in terms of profit gains. However, prices could also crash to uncomfortable lows that could bring about even greater lows. If you happen to be an investor that’s looking for stable returns, then crypto investments may not be your best bet.
There’s No Track Record
Cryptocurrencies are growing in popularity, however, they haven’t been around for too long. Unlike MLB spreads which have kept things relatively consistent for decades, cryptocurrencies have been around for just over 10 years thanks to the publication of a white paper on Bitcoin back in 2008. This means that no one really knows what will happen to cryptocurrencies in the future and this could bring about uncertain events for investors that could be entering uncharted waters.
Cryptocurrencies Bring About Serious Scalability Problems
Digital currencies run at lightning speed, however, they also run into major problems that will make it difficult to have them rolled out on a larger scale. In the long run, this could prove to be a highly frustrating experience for those participating in transactions resulting in potential financial losses as well.