Why not invest in cryptocurrency?
Face the factuality of cryptocurrency through this guide!!
The “crypto” in cryptocurrencies constitute a secretive or concealed currency which is processed as a digital currency asset and their transactions are transferred via decentralized systems.
In the beginner’s article guide, the rising cryptocurrencies with growing potential, there are hundreds of digi-currency circulated in digital financial markets.
Cryptocurrencies based on market capitalization or their valuation disseminated are often facing the flaws in crypto-market.
The ascending-to-descending digital transformation of financial digi-currency, well-reputable financial advisors or investors also fear of buying and selling the cryptos as it is considered to be risky with the objective of long term.
There is no legit scheme of making anybody rich within quick minutes in this world. Also, Rome wasn’t constructed in one day. Therefore, how can we expect 100% to earn high profits in a single day?
Over the facts: Bitcoin is a flaw as an investment!!
- In this guide, the light is reflected on the journey of the declining buy or sell of cryptocurrencies:
The rationale of why the world-renowned institutional investors ain’t investing in digital currency:
Price-Movements: The volatile markets of cryptocurrencies don’t avail the time to manage the portfolio with the prices of high and low margins. The time period for trading the cryptos is a short span of time. Also, it doesn’t avail stop loss risk protection. Hence, Investing in cryptocurrencies can be risky.
Liquidity in Markets: The higher is the movement in the buy of bitcoin, the higher is the risk involved with it. To invest in bitcoin, there is a requirement of liquidity markets and potentiality to buy and sell it easily.
Non-regulated Crypto Exchanges: According to the research of Ernst and Young, the report assesses that nearly 10% of funds bestowed via initial coin offerings (ICOs) are either lost or have been stolen via hacks.
The cryptocurrencies are authorised with hundreds of relatively small, non-regulated exchanges. Thereby, digital currency investors had revealed the fragmented market with a history of insider trading, hacking and theft. It’s not a recommendable place for the inventors to trade with cryptocurrencies in these exchanges.
To earn, learn and work for money, there must be a shortage of supply, wide acceptance and easy transfer of money.
The currently used currency is fiat money. It is not endorsed by any material like gold, silver, platinum, etc. It doesn’t follow the function of store of value with the government organizations. This means that it is not authorised by any government organisation. It functions on the basis of a defined-in-advance process or algorithm.
Therefore, the regulation of the cryptocurrency can become a complex problem anytime, so most countries don’t approach it as the decentralised currency.
Bitcoin is limited, and is inefficient as value to hold”
This makes it a terrible long-term investment. As it is not issued by the government, cryptocurrencies are not tangible assets like the $20 invoice in your wallet. They are not stored in a bank, but in a blockchain wallet on a USB drive with private keys, offline and cryptocurrency exchange . That is why cryptocurrency is an observing and audited investment.
The most popular digital currency i.e, cryptocurrency is not only an impressive investment with its distinctive features but also a significant liability.
The audience are the largest threats to themselves as like other applications, most digital money cannot be reset if the passphrase is forgotten.
Why is fiat money widely-accepted?
The government collects tax only in the form of its national currency. Therefore, there is the demand for currency to hold in its own original form of money i.e, fiat money. So, the businessmen can run their business in fiat money; accept and make payments in it.
Their employees, suppliers, contractors , distributors , and so on, everyone receives money in the form of fiat money.
Also, it is not like that the government doesn’t want crypto currency to be regulated currency in the nationale financial markets, but it’s a time consuming process for the cryptocurrencies to legalize and regularise them in a short period of time. Every new authority implies a time consuming process for its development.
Which crypto is to be selected?
As it is of limited supply, it cannot be created after a limited margin. Therefore, it is not possible to recreate it. After this limited margin, the traders have to create another new digital financial currency. With the outlook of scarcity, the technological advancements might lack its creation as its the latest development. Also, people might or might not trust digital crypto currency.
When there are new currencies launching in the market, it becomes difficult to select the best cryptocurrency to invest in.
Illegal Transactions: As the transactions demand high privacy and security, it’s a complex process for the government to track and list the transactions. There might be chances of illegal activities involving drugs and other activities on the dark web.
Data loss or data stolen by hackers: Most of the wallet data are stored to operate their user ID though they are secure but still the exchanges aren’t secured. Therefore, there is a possibility of data loss or data stolen by hackers.
No refund or cancellation: The transactions cannot be cancelled if once made. If someone has made a wrong payment then it cannot be retrieved.
Following all these disadvantages, The cryptocurrencies catalyses a lot of environmental damage. Therefore, it requires super power computers for mining and creating them. And this requires electricity and other resources of which the extraction and production causes a lot of damage to the environment.
It can be hoaxed so easily by people like Elon Musk?
Elon Musk recommended Dogecoin the best king of cryptocurrency and Tesla has partially stopped confirming bitcoin as the well-accepted currency because of environmental emissions of fuel, increasing utilization of coal. Therefore, it has seen a falling rally in the digi-financial markets.
Final hypothesis:
Among all the loopfalls for the newbies, it is always advisable that Cryptocurrencies and Initial Coin Offerings (“ICOs”) are extremely risky when the financial traders face high-low marginal price movements. And they are speculative investments as there are a lot of disadvantages attached with the circulation of this cryptocurrency in the digital finance-markets.
As the sources said, China has stopped the financial institutions and the payment related companies from services being rendered for cryptocurrency transactions, and warned investors against its speculation investments. These institutions, banks and online payments channels, must stop offering its clients any service involving cryptocurrency’s trading, registration, settlement, and clearing.
Following the statement, it derives the risk of cryptocurrency trading, calling it as “virtual currencies”.
They are not regulated by real value”, therefore, their prices are easily tampered. Also, the trading contracts are not defended by Chinese law.
