Why are people investing in crypto?

No single asset ever made such an uproar in the financial world as cryptocurrencies. They appeared seemingly from nowhere and rose to value at an astronomical rate, making tons of profits for some people in the process.

But how did cryptocurrencies rise into the position they nowadays have? And why were people investing in crypto in the first place?

A decentralized alternative to currency

Since their introduction, cryptocurrencies have been described as a revolutionary technology that will transform and revolutionize many areas of everyday life and business industries. The blockchain technology that cryptos are based upon is still said to have immense potential, which with time is said to remove intermediaries that try to govern control over financial systems.

Unfortunately, because of its decentralized nature and no central governing body controlling its use, cryptocurrencies have gained a bad reputation for being the go-to currency for drug dealing and other criminal activities, mostly present in the so-called Dark Web.

Limited supply to prevent inflation

Unlike real currency, a lot of cryptocurrencies feature a limited supply. This makes cryptos interesting to investors as they are not susceptible to inflation, instead providing a reliable asset to allocate funds in for a long time. Because of their decentralized and encrypted nature, it’s much more difficult for governments to influence, dilute, and even tax or seize cryptocurrencies.

Making money on crypto isn’t as simple as investing and waiting anymore – crypto asset management is the key to long-term gains. The fluctuations of cryptos on the market are much more dynamic than a decade ago, requiring a keen mind and constant monitoring to make profit from. When trying your luck at investing in crypto, create a long-term investment strategy and stick to it, diversifying your assets and growing your portfolio.

Unique risks of investing in cryptocurrency

There are many benefits and potential profits to investing in cryptocurrency, but there are also some things you should be wary about. Because of its decentralized nature, cryptocurrency is prone to theft and scams, much more than traditional financial securities. The greatest concern of trading cryptocurrency is keeping your assets safe. You can use a digital or a physical wallet, but both are prone to their own risks.

Digital wallets require a password which can be forgotten or stolen. There’s also a possibility of a hacker simply forcing their way into your wallet and stealing all your profits, and it falls on the trader to implement all the necessary countermeasures for that not to happen. Physical wallets, on the other hand, are mostly safe from hackers, but that doesn’t mean they’re fool-proof. Such wallets need to be hidden in a safe place to prevent them being stolen or lost.

Don’t become another media story of a crypto investor who accidentally threw away millions worth of Bitcoin by mistake – keep your assets safe and secure.

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