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At first, cryptocurrency felt to be just a fad, but in the past few years, it’s become clear that this is here to stay in the long run. However, even in the past years, cryptocurrency has been volatile. Yes, prices have increased quite a bit, but in some cases they dropped dramatically. So it’s very hard to know exactly what ROI you can get from cryptocurrency.

Is it safe to invest in cryptocurrency?

As long as you keep your wallet data safe and you don’t make your investment public, the chances of someone getting access to your cryptocurrency are minimal. Plus, buying and selling crypto has become a breeze nowadays. There are many platforms where you can buy crypto, so the process itself is very convenient and you will have your crypto within minutes. But the thing you need to realize is that cryptocurrency is very volatile.

That means cryptocurrency will go up and down in price. Even in 2021, bitcoin was $40k, then it dropped to $30k and went up to $50k. As an investor, you don’t really know what to do, as you want to avoid any drops and just focus on price increases once you buy your cryptocurrency.

Which is why cryptocurrency can be very hard to invest in. Something like Bitcoin seems to have an upward trajectory. But there are other cryptocurrencies whose prices has dropped exponentially in the past few years. That doesn’t mean it’s something simple to do, you need to assess the performance of that cryptocurrency and see if it’s actually worth it.

There are lots of unknowns regarding cryptocurrency

One of the reasons why some cryptocurrencies had a higher price is because someone popular invested in them. Whenever Tesla chose to buy some cryptocurrency, the Bitcoin price went up. And when there were issues and all kinds of problems related to crypto, the value went down. The truth is that you can’t really control these things. If you buy cryptocurrency right at a very low price, then your risks are minimal.

However, if you follow the trends and buy because other people do it at a higher price, that will be a problem. The reality is that whenever there are unknowns, it can be difficult to actually invest in something. Sure, it sounds appealing, but you need to be a very smart investor. That’s especially true in the case of the older cryptocurrency like Bitcoin where you have to spend a lot of money.

Conclusion

The truth is that once you invest in cryptocurrency, you are basically gambling. Historically, the value went up for the most popular cryptocurrency. But it also went down for many as well. Plus, social influence can end up playing a major factor, which leads to even more uncertainty regarding your investment. So, should you invest in cryptocurrency? It can be a good idea, as long as you invest only a small fraction of your portfolio. This way you keep the risks minimal, and results can be great in the long run.