Is Investing in Cryptocurrency a Smart Way to Maximize Your Savings Growth?
Cryptocurrencies have barely been out of the deadlines in recent months. Bitcoin shot up in value, from a measly $0.25 in 2011 to just under $20k last year. It has since dropped, but the public perception is that cryptocurrencies are the next big thing in investment markets. But is this true, and if you are tempted, how do you go about buying cryptocurrencies?
It is always sensible to have a pot of savings. Experts recommend that we have a minimum of three months’ worth of cash stashed away, to tide us over if we lose our regular income. The problem with having savings is that it is essentially money sitting there doing nothing useful. Interest rates are at an all-time low right now, so keeping money in a savings account won’t earn you much unless you have a huge balance. Obviously, it is a good idea to keep at least some money in a safe savings account, but if you have plenty of spare cash, you might prefer to invest it for maximum gain.
The question is whether cryptocurrencies are a good vehicle for your savings cash.
Different Types of Investment
There are many different types of investment vehicle, from hedge funds and index-linked trackers to gold coins and the forex market. No investment vehicle is 100% safe, but some are riskier than others. Cryptocurrencies such as bitcoin, Mondero, and Ripple fall firmly into the “risky” category. Nevertheless, if you approach crypto in the right way, it is possible to make some serious money.
If you had invested $100 in bitcoin back in 2011, you would be a rich person by now. In fact, you would be a millionaire, on paper at least, with your bitcoin investment worth around $3.3 million. That’s a pretty impressive ROI, but such a high return comes at an equally high price.
Investing in Cryptos
Buying cryptocurrency is actually very easy these days – you can click here to find out how to buy it with Cryptohead. However, there is a serious risk you will lose your initial investment. And, if you use a credit card to buy bitcoin, Lite Coin, or Ripple, you could end up paying interest on something that’s worth less than what you paid for it. So, in effect, you have been hit with a double whammy.
Closer regulatory scrutiny is almost inevitable, with many governments and financial institutions concerned about the “crypto bubble”. Some lenders have banned customers from using credit cards to buy cryptocurrencies, although you can still use a debit card. Bitcoin miners can no longer make a profit on their efforts, so it’s likely that bitcoin prices will slide even further.
Nevertheless, there is still money to be made from investing in cryptocurrencies. The key to success is researching some of the lesser well-known cryptocurrencies. Blockchain technology is here to stay. Governments might not be 100% comfortable with the idea of alt-currencies, but it is the future. Bitcoin has probably peaked, at least for now, but other cryptocurrencies such as Mondero and Ripple are on the ascendency, so get in there now and you could see a great ROI.