This article is for informational purposes only. The information is not meant to be and does not represent, financial, investing, trading, or other types of advice or recommendations.
Cryptocurrency is one of the most attractive forms of investment, and you're not alone if you're undecided about buying. According to Statista, at the end of March 2021, the number of Blockchain wallets, which allow users to set up their crypto portfolio, had surpassed 70 million users.
However, many people think they’ve missed the train and that they are too late to invest now. If you are one of them, let’s get this straight: You’re not late. For example, in comparison to the S&P 500 index's major hitters, Bitcoin represents a little slice of the global investment pie in terms of market value. This means that there still is room to grow.
What is more, the entire worldwide market value of all cryptocurrencies was $2.19 trillion in October 2021, making it the world's eighth biggest economy by gross domestic product (CoinMarketCap).
While several cryptocurrencies saw a price drop earlier in 2021, they are now gaining traction. Bitcoin, for example, is once again on the rise. Is it time to invest now that crypto prices have recovered? More importantly, how much should you invest in crypto? Here's all you need to know about it.
Cryptocurrency is classified as a "high risk, high return" investment. Because it's still very speculative at this stage, it's riskier than investing in equities.
Stocks have a lengthy history of increasing in value over time, but cryptocurrency is still in its infancy. While it has the potential to become widespread and has real-world applications, no one knows for sure.
This isn't to say that cryptocurrency is a poor investment or that you shouldn't invest in it. If it becomes useful in the real world, it has the potential to transform the world—and those who invested early on might profit handsomely. However, before you buy, you should think about your risk tolerance.
You could be a good candidate for this sort of investment if you're prepared to take on some risk in exchange for the chance to make a lot of money.
Most Bitcoin (and other cryptos) investors believe blockchain, the technology that secures crypto transactions, is game-changing. However, their assets are still insignificant, accounting for about 1% to 5% of their total portfolio. Successful cryptocurrency investors also use a dollar-cost-averaging approach, which entails investing in regular, equal amounts over time.
Before investing, it is important to know this:
Here are some factors to consider when you’re thinking about how much you should invest in crypto.
If you still feel scared to start investing, here are some tips on how to invest safely:
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The greatest investments are those that will continue to increase over time, so make sure you're looking for cryptocurrencies that will help you in the long run rather than those that will make you rich overnight.
You need to understand that the market is still young. Investing in anything new comes with its own set of problems, so you must expect ups and downs. Although cryptocurrency is risky, it is a very good investment if you do it right. Make sure you can afford to invest and are okay with risk and volatility before you buy. Cryptocurrency might not be for everyone, but it may be a good investment for you.