Is it risky to invest in cryptocurrencies?

Like the best-known bitcoin of all, cryptocurrencies are created as exchange instruments within the digital world. They are also used as stock market assets to invest for the long term. Is it really risky to invest money in cryptos? Find out in this article.

A little reminder about cryptocurrencies

cryptocurrencies are electronic currencies which are based on a system called blockchain. They allow peer-to-peer (P2P) exchanges without intermediaries such as insurance or banks. Anyone who uses the blockchain has control and responsibility for their funds. At any time, the user can transfer their assets without the consent of a third partyregardless of the amount or the person receiving it.

The blockchain allows the storage and exchange of values ​​on the Internet no central intermediary (banks, notary, state, etc.). A blockchain is a ledger that can be compared to a book of public accounts. The ledger stores and protects data using sophisticated algorithms that use cryptography. It is possible for each user to verify authenticity chain. The blockchain works like an account book that everyone can access and modify, without altering or erasing its content.

Popular Cryptos

Ethereum, Bitcoin and Ripple are attractive for their stock market performance. They are considered by some to be safe havens in times of crisis. However, investing in cryptocurrencies not without risk.

In fact, Bitcoin (and other cryptocurrencies like ETH) have the potential to invest in this value, which is also a virtual “currency”. The coin appears as a transaction facilitator with the possibility of profit.

Bitcoin is accepted as payment method on some websites, as well as in some local businesses. It can be transformed into a coin, like the dollar or euro. Know that in France, the euro is the only legal tender. A merchant can refuse to accept payment made in bitcoin, but it is mandatory to accept payments in euros.

Nevertheless invest in Bitcoin (or other popular cryptocurrencies) can be extremely deep colored.

Remember that bitcoin is based on an unregulated market (just like ETH), …), this digital currency does not have without official course (in the regulated sense). It is a computing environment with its own set of rules which might not be suitable for those who are not tech-savvy and knowledgeable enough. On account of its high volatilitythis market is deep colored.

Bet on cryptocurrencies for the long term

Although the Bitcoin either the virtual “currency” the best known, there are many others, such as Dash, Ether, Peercoin, Dogecoin, Litecoin, Namecoin, etc. However, none of them it is not legal tender.

Cryptocurrencies are, in theory, the most effective investment method. Consists in exchange euros for a sum of cryptocurrency, hoping that it will be appreciated in the near future. The objective is to receive an income in case of resale of the investment. The long-term investment strategy is known as ” hold in the language of business communities.

Long-term investing is easier for newbies because it is easy to buy cryptocurrencies and keep them in a Crypto Wallet account.

The DCA (dollar cost averaging) method is frequently used in financial markets (stock markets, for example) to achieve a less stressful passive investment. A wallet (crypto wallet) is a type of physical or virtual safe capable of containing and protecting crypto assets. In this way, one can invest in a crypto value like Bitcoin; it’s a bet a long-term price increase.

If so, it’s up to you when you want to make your profit (or minimize losses). Some investors settle for a 25% capital gain that they can sell, while others prefer to wait until their capital has at least doubled (+100%).

This long-term strategy (LCD) does not require very few transactionsand does not require regular participation in the cryptocurrency market.

However, if you believe that Bitcoin is the currency of the future or an investment that will increase in valueyou can invest in long term. Like any investment in the stock market, you must respect some guidelines for managing your portfolio (spread purchases, measured investment, profit and loss management).

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