With all the prevalent cryptocurrency investment frenzy spreading worldwide, people need to take a step back and reassess their financial plans. The mainstream media and governments across the countries gave a mixed response to the prevalence of cryptocurrencies. Does that mean that the latest bitcoin website should be taken with a grain of salt? Am I risking my assets if I am planning to put my time, efforts and resources into cryptocurrency? However, investors would like to differ because of the unfathomable and unprecedented returns that they received in recent years. Many of them even look forward to making quick returns on the investments that they make.
Bitcoin Era will help you to see through the intricacies of the crypto industry that you must be aware of. Here are 5 reasons that you need to watch out for:
1. Unprecedented Volatility
It is of no surprise that investing in cryptocurrencies is bound to have unprecedented volatility, nothing like you’ve seen before. It involves greater risks due to the fact that the prices are always volatile. Experts feel that investing in Bitcoin is a highly debatable topic because you have nothing specific to hold onto. To carry out a fundamental analysis of Bitcoin and the associated investments is a taxing task even for the fundamental analysts.
People are constantly investing in such cryptocurrencies based on the limited or totally unpredictable information that is being floated on the internet. Considering that the entire cryptocurrency ecosystem is highly unregulated, people are flocking into it which is pushing its prices way higher than normal which is yet another red flag.
2. Element of uncertainty
Cryptocurrency does not have a definitive origin to base the facts on. The history is also not so much detailed around the topic that it becomes difficult to assess the situations & conduct research. Cryptocurrencies do not fall in the category of “Currency” as it is certainly not supported by any sort of tangible asset. With a complete elimination of government control from the entire mechanism, it is not safe for people to trust the mediums that governments clearly mandate to keep themselves from. It is undeniably a risky business for people to trade in and piles their hopes even further in this digital currency landscape.
3. Half information will cost you a fortune
Cryptocurrency is being treated as a mere bubble that can implode anytime to bring you a host of unfavourable news if you’re already too deep into it. Global bankers consider this reason as one of the predominant causes that people have lost a significant amount of money in trading and earned meagre interest/returns on them. Hence, it is quite prudent to stay away from something that you know is out of your reach. It is better to not know things than to know it all and lose it all. Even retail investors have begun to realize that the entire concept of crypto relies on uncertainty.
4. Regulation out the window
Cryptocurrency is a decentralized format that is susceptible to risks and dangers at any given time. People invest in cryptocurrency just because they get to evade the transaction fees that financial intermediaries usually charge people. There is particularly no governance system like SEBI or grievance redressal platform where you can go to seek help in case of any unfortunate event that you encounter or come across.
If you buy something but the product doesn’t work well, you can always go back to the retailer to claim your loss but that is not the case with cryptocurrency or bitcoin transactions and your money has gone down in the dumps. Moreover, you don’t have anyone to help you out in such dire circumstances.
5. Den of thieves
The crypto industry has evolved into a hub of illegal activities where underground activities run rampant without being accountable to anyone. You also won’t have to reveal your identity while executing a transaction, so technically you won’t even know who are you entering into a contract with. This is the favorite part of cybercriminals that they can always leverage and continue committing crimes undetected.
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