Skip to content
Home » Blog » Is Cryptocurrency a Good Investment?

Is Cryptocurrency a Good Investment?

Is Cryptocurrency a Good Investment?

Cryptocurrencies have been in the news a lot lately, with Bitcoin reaching new heights in value. But is this digital currency a good investment? That depends on your goals and how much risk you’re willing to take. In this post, William Schantz of Mid Atlantic Financial, LLC gives you a look at what you need to know before investing in cryptocurrency.

Take on Cryptocurrency As An Investment

What is cryptocurrency?

Cryptocurrency is a digital or virtual currency that uses cryptography for security. A key feature of cryptocurrency is that it is decentralized, meaning it is not subject to the control of a financial institution or the government.

Bitcoin is not only the first but also currently the most popular cryptocurrency. It was launched in 2009. Since then, there have been thousands of different cryptocurrencies created.

Why invest in cryptocurrency?

Cryptocurrency has seen significant growth over the past few years. Bitcoin, the first and most well-known cryptocurrency, has seen its value increase from around $1,000 in 2017 to over $20,000 in 2020. Other cryptocurrencies have also seen significant growth over this period.

There are a few reasons why people may choose to invest in cryptocurrency. Firstly, cryptocurrency offers the potential for high returns. Secondly, cryptocurrency is a new and emerging asset class, which means it has the potential to offer diversification benefits. Finally, cryptocurrency is a global phenomenon with a growing user base and ecosystem.

What are the risks of investing in cryptocurrency?

Cryptocurrency is a new and emerging asset class, which means it comes with a higher level of risk than more established asset classes such as stocks and bonds. Cryptocurrency prices are highly volatile, according to William Schantz, meaning they can rise and fall sharply in value. This makes them unsuitable for investors who are looking for stability and capital preservation.

Investing in cryptocurrency also comes with other risks, according to William Schantz. For example, cryptocurrencies are not regulated by governments or financial institutions, which means there is no protection if things go wrong. In addition, there is the risk of fraud and hacks, as well as the potential for technical problems.

How to invest in cryptocurrency?

If you’re interested in investing in cryptocurrency, there are a few different ways to do it. The first is to buy cryptocurrency directly on exchanges such as Coinbase or Binance. The second is to purchase crypto-backed tokens such as GBTC on a stock exchange. Finally, you can also invest in cryptocurrency through a digital currency fund such as Grayscale’s Bitcoin Investment Trust.

The Concluding Thoughts

Cryptocurrency is a new and unique investment with a lot of potential for growth. However, there are also risks associated with investing in cryptocurrency. So, is cryptocurrency a good investment? The answer to that question is not as straightforward as you might think. Cryptocurrency can be a great investment if you understand the risks and how to mitigate them. William Schantz recommends educating yourself on all aspects of cryptocurrency before investing your hard-earned money. With due diligence and some luck, you may find that cryptocurrencies are a great way to build your portfolio and secure your financial future.