Is It Wise to Invest in Cryptocurrency?

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Ofcourse investment in cryptocurrencies must be a personal choice and for sure investing in cryptocurrencies can be quite risky and indeed any investment choice one makes is often accompanied with a measure of risk and cryptocurrencies investment is no different, it's afterall a highly volatile asset asset and with lots of uncertainties as it regards regulations so bearing that in mind I can't really say whether it's wise or not but if one should choose to invest they must only invest what little they can afford to lose in case things goes sideways so instead of saying it's wise or not I will like to list a few factors that must be considered before investing in cryptocurrencies.

What should we consider before investing into cryptocurrencies

We should really consider the volatile nature of cryptocurrencies before making the decision as to invest or not as this is a much younger market in comparison to the traditional asset class and for the fluctuations often experienced in short amount of times it might be too much for one to bear, yes the volatile nature could mean quick gains will be guaranteed it could as well lead to losses in the shortest amount of time, that's why I believe we should consider the volatility because some may like it that way whilst others may hate it's unstable nature.

Also whilst making the decision to invest or not to invest in to cryptocurrencies one should also understand that regulatory challenges facing cryptocurrencies, they must decide if whether they are comfortable with investing into it despite the uncertainties surrounding it or if they would rather stay clear, I believe this is what someone has to be made privy to before knowing if to go ahead with investment or not as investing in an asset class with regulatory uncertainty could mean the asset we invest in could be affected in it's value if the legal team of the country decides to come after it or if drastic changes are made to a countries regulations on this asset.

Well for one also wanting to invest in the financial market I feel, a personal opinion though as am not a financial adviser that the individual try to diversify, diversification is really important seems it would mean that risk is well managed as it would be spread across the different asset we invest in not just into one asset just in case things goes south we won't lose all our investment or everything on our portfolio, as diversification will help really well in the reduction of losses incured from one investment so this is another factor that should be considered before one chooses to invest in cryptocurrencies.

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Also it's really really bad to just jump into investment because of what we hear online from social media influencers or others, we shouldn't let anyone influence us into investing into something we have doubts about, that's where education comes in.

I believe it's important we endeavor to do proper research before investing in any asset class at all, proper personal research and not mere hearsay should be carried out by everyone, it's important that everyone with money looking to invest in any asset class should do their due diligence about the project and it's team and if the potential of the project is promising and it's vital they understand this things and are convinced as best as any could be of theirself, so this i believe it's key before investing into any asset class.

Also we should know what we have in mind and the kind of investor we are if we are looking into investment with the idea of long term mindset or short term mindset, so it's vital we know exactly what we want, if we want short term gains then we must tailor our research to an asset we believe can guarantee that if any, or if they want long term profit and are here for the long term then they must look for strong investment with good potential and strong usecases which maynot be performing in the immediate short term but has lots of potential because of being a strong project.

In any investment at all our level of risk matters, we must understand our personality, do we have large risk appetite or low risk appetite, understanding this is crucial. This is because the cryptocurrencies market is one that have volatility next to nothing at all, it could experience significant gains or loss in short period of time which is why people who may have low risk or conservative individuals should better stay clear for their own good.

Conclusion

I can't say whether it's wise or not to invest in cryptocurrencies as am not a financial advisor but I can say this it's important we after proper research and decide to invest in cryptocurrencies we must then look at all these factors above then make a sound investment choice, and never invest more than we can afford to lose, that can't be overly emphasized.